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Column: Workers' Comp

Worker Pharma Choice Debatable

By: | October 12, 2017 • 2 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

This is a tale of two pharmacy models, although we can’t say it’s the best of times or the worst of times for either.

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Thanks to court records, we can say each tallied a win and suffered a loss in two state supreme court battles. The disputes were over whether workers’ compensation claimants can select prescription drug providers, bypassing typical insurer pharmacy utilization and cost-control arrangements.

That should interest most claims payers who build their workers’ comp pharmacy cost-containment programs around directing injured workers to contracted prescription distribution systems, often involving PBMs.

In one case, the Kentucky Supreme Court ruled that five claimants with similar cases can select their pharmacy under a state law allowing injured workers to choose medical providers.

The decision in Steel Creations v. Injured Workers Pharmacy resulted from medical fee disputes, which pitted five employers and their insurer, the Kentucky Employers’ Safety Assn., against employees using the services of the IWP. Plaintiffs’ attorneys referred the claimants to IWP after they complained of delays in receiving prescriptions under KESA’s existing arrangement.

According to the court decision, IWP, (which recently hired PBM veteran Michael Gavin to bolster payer relations), markets to plaintiffs’ attorneys and takes prescription orders from doctors rather than adjusters. It is a mail-order pharmacy offering next-day delivery.

By contrast, insurer KESA provides injured workers with medical cards for purchasing prescriptions. It does so through a “handshake agreement” with service provider M. Joseph.

I don’t think these two court decisions mark the end of this story. Legislative battles continue to be fought over whether workers can bypass insurer-selected pharmacies.

While the case involved drug pricing, the ruling reveals difficulties in unraveling prescription charges under such arrangements. Witnesses could not or would not testify about upcharges added to drug pricing by both pharmacy benefit management companies and “middle-man” M. Joseph.

However, the court cited evidence submitted by KESA showing significant price differences between M. Joseph and IWP on some medications. On others their prices were similar.

The second ruling, handed down by Louisiana’s Supreme Court, involved IWP and a claimant seeking $13,110, an amount the claimant’s employer refused to pay for IWP prescriptions.

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Following review, Louisiana’s Supreme Court held in Burgess v. Sewerage & Water Board of New Orleans that under its state law, pharmacy choice in a workers’ comp case belongs to the employer.

I don’t think these two court decisions mark the end of this story. Legislative battles continue to be fought over whether workers can bypass insurer-selected pharmacies.

With the increased role of drug expenses in workers’ comp, you can bet entities in the pharmacy business will keep fighting, hoping to make it the best of times for their operations. &

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession: Curt Gross

This director of risk management sees cyber, IP and reputation risks as evolving threats, but more formal education may make emerging risk professionals better prepared.
By: | June 1, 2018 • 4 min read

R&I: What was your first job?

My first non-professional job was working at Burger King in high school. I learned some valuable life lessons there.

R&I: How did you come to work in risk management?

After taking some accounting classes in high school, I originally thought I wanted to be an accountant. After working on a few Widgets Inc. projects in college, I figured out that wasn’t what I really wanted to do. Risk management found me. The rest is history. Looking back, I am pleased with how things worked out.

R&I: What is the risk management community doing right?

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I think we do a nice job on post graduate education. I think the ARM and CPCU designations give credibility to the profession. Plus, formal college risk management degrees are becoming more popular these days. I know The University of Akron just launched a new risk management bachelor’s program in the fall of 2017 within the business school.

R&I: What could the risk management community be doing a better job of?

I think we could do a better job with streamlining certificates of insurance or, better yet, evaluating if they are even necessary. It just seems to me that there is a significant amount of time and expense around generating certificates. There has to be a more efficient way.

R&I: What was the best location and year for the RIMS conference and why?

Selfishly, I prefer a destination with a direct flight when possible. RIMS does a nice job of selecting various locations throughout the country. It is a big job to successfully pull off a conference of that size.

Curt Gross, Director of Risk Management, Parker Hannifin Corp.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Definitely the change in nontraditional property & casualty exposures such as intellectual property and reputational risk. Those exposures existed way back when but in different ways. As computer networks become more and more connected and news travels at a more rapid pace, it just amplifies these types of exposures. Sometimes we have to think like the perpetrator, which can be difficult to do.

R&I: What emerging commercial risk most concerns you?

I hate to sound cliché — it’s quite the buzz these days — but I would have to say cyber. It’s such a complex risk involving nontraditional players and motives. Definitely a challenging exposure to get your arms around. Unfortunately, I don’t think we’ll really know the true exposure until there is more claim development.

R&I: What insurance carrier do you have the highest opinion of?

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Our captive insurance company. I’ve been fortunate to work for several companies with a captive, each one with a different operating objective. I view a captive as an essential tool for a successful risk management program.

R&I: Who is your mentor and why?

I can’t point to just one. I have and continue to be lucky to work for really good managers throughout my career. Each one has taken the time and interest to develop me as a professional. I certainly haven’t arrived yet and welcome feedback to continue to try to be the best I can be every day.

R&I: What have you accomplished that you are proudest of?

I would like to think I have and continue to bring meaningful value to my company. However, I would have to say my family is my proudest accomplishment.

R&I: What is your favorite book or movie?

Favorite movie is definitely “Good Will Hunting.”

R&I: What’s the best restaurant you’ve ever eaten at?

Tough question to narrow down. If my wife ran a restaurant, it would be hers. We try to have dinner as a family as much as possible. If I had to pick one restaurant though, I would say Fire Food & Drink in Cleveland, Ohio. Chef Katz is a culinary genius.

R&I: What is the most unusual/interesting place you have ever visited?

The Grand Canyon. It is just so vast. A close second is Stonehenge.

R&I: What is the riskiest activity you ever engaged in?

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A few, actually. Up until a few years ago, I owned a sport bike (motorcycle). Of course, I wore the proper gear, took a safety course and read a motorcycle safety book. Also, I have taken a few laps in a NASCAR [race car] around Daytona International Speedway at 180 mph. Most recently, trying to ride my daughter’s skateboard.

R&I: If the world has a modern hero, who is it and why?

The Dalai Lama. A world full of compassion, tolerance and patience and free of discrimination, racism and violence, while perhaps idealistic, sounds like a wonderful place to me.

R&I: What about this work do you find the most fulfilling or rewarding?

I really enjoy the company I work for and my role, because I get the opportunity to work with various functions. For example, while mostly finance, I get to interact with legal, human resources, employee health and safety, to name a few.

R&I: What do your friends and family think you do?

I asked my son. He said, “Risk management and insurance.” (He’s had the benefit of bring-your-kid-to-work day.)

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]