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Work comp drug talk round 2

For the dozen folks who find this remotely interesting – A few factoids and interesting tidbits from around the WC PBM world.
The legislative efforts in California to address repackagers and dispensing of drugs by physicians appears to be stalled, and may not progress this year. This is bad news for payers and policyholders, as repackaged drugs account for over 50% of drug costs in California and that number is heading up.
Third party billers pay pharmacies about what most PBMs do, thus the reason pharmacies send their scripts to TPBs is because it is less work.
Sources indicate about 2% of all workers comp scripts are never picked up. If the pharmacy billed the script through a PBM, it will be reversed and the PBM and payer credited. This does not appear to be happening with third party billers. Anyone out there ever had a third party biller come back to them and reverse a charge? Anyone???
One third party biller strategy being discussed by a major comp payer is to require the biller to verify that each script was picked up. This could be in the form of a photocopy of the signature log or attestation by an officer of the TPB.
A source’s billing and payment data indicate that many payers, including at least two of the top five national WC insurers, pay third party billers at or close to billed charges in states without fee schedules. Meanwhile, other payers are cutting those bills to AWP-10% +$3.00 and not getting much pushback.
Word has it that Kroger’s is getting paid at straight AWP by their third party biller…no wonder they are not contracting with any workers comp PBMs.
Meanwhile, Medco is forcing pharmacies to accept group health reimbursement for their (very few) workers comp clients. Workers comp does not appear to be anything more than an accomodation for a very few of Medco’s largest customers, as Medco does not actively sell into the comp sector. My sense is if Medco did have more WC business, they very likely would have a lot more pushback from the pharmacy chains.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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