Prescription Benefit Management for Employers - 2

Saturday, February 1, 2003 | 0

In our first article we reviewed what a prescription benefit manager (PBM) is and how it can save an employer money. This article, Part 2 of the two part series, will review how to select a PBM, what questions to ask, and how to manage the manager...

First off, why work with a special PBM for workers' compensation? The answer is quite simple, workers' comp is a completely different animal than group health because work comp is a state mandated, heavily regulated, employee benefit that requires expertise in laws and regulations specific to your state. A PBM that specializes in work comp will permit better control and program benefits.

When interviewing PBMs, ask the following:

1. Is there custom control over qualifying criteria? One goal is to reduce paperwork, phone calls and errors. Employers should be able to set strictness levels for screening prescriptions and get claims clearance. An experienced PBM can provide advice here to achieve the balance that will avoid penalties and late fees, but still ensure proper prescription management.

2. How often does the PBM update patient data? At a minimum, patient data should be updated daily. Otherwise you run the risk of having prescriptions filled for patients who are no longer eligible or failing to provide coverage for new qualifying patients.

3. Are there drug plan controls? The program should permit the exclusion of drugs not normally associated with workers' comp injuries, such as a statin (which are normally prescribed to reduce cholesterol), but still retain the flexibility to include a drug identified by the carrier as qualifying.

4. Are there compensability measures? The drug plan should ensure that the right drugs are dispensed at the right time for the injury in question, without duplication. There should also be eligibility information as close to real-time as possible to ensure that the highest number of injured workers enter the system as soon as possible.

5. Ask how the PBM moves an injured worker from a brand name pharmaceutical to an equivalent generic drug? In work comp there is no deductible to motivate the patient to move to a generic so this can be a particularly troublesome area. A quality PBM should be able to adjudicate the claim at the time the prescription is filled, and will be able to direct the pharmacist to suggest a generic before the more expensive alternative is dispensed.

6. Check the billing procedures to see if there are separate charges for administrative billing. Billing and payment should be accomplished with minimal administrative costs if the system is designed correctly. The system should have an electronic billing, payment and reconciliation component. As we reviewed in Part 1 of this series, the price of the drug is only part of the total cost of service and may in fact be less than administrative costs.

7. How well does the PBM promote itself to patients? On paper there may appear to be cost advantages, but unless injured workers are using the program you won't see those savings. Ask for references and contact current customers to see if they are actually achieving compliance goals. You need a PBM with a large network and aggressive outreach. High utilization is the key to cost savings because of the ability to consolidate dispensing costs, prescribing physicians, administrative costs, and drug pricing. The more patients in the system, the greater the savings.

8. Does the system adjudicate at point of sale, or prior to prescription fulfillment? If it is the former, there are increased chances of error in addition to increased administrative costs.

9. Make inquiry as to the clinical programs does the PBM offers. There should be a retrospective program to identify patients at risk of moving to therapies that will prolong their absence from work. There should also be programs that verify drug appropriateness, duration of use, cross-reference multiple medications for contra-indications and alerts for other health issues.

There should be benchmarks for performance and goals established at the outset, and continuous monitoring of performance to see if those goals are being met. Good prescription benefit management can save money and assist in returning employees back to work.