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.

Advertisement




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.

Advertisement




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

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

Advertisement




That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

Advertisement




Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]