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. &

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The R&I Editorial Team can be reached at [email protected]