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BOSTON--Implementing a workers compensation pharmacy network helped one Fortune 500 company reduce its medical spending with network prescription pricing and an increased use of generic drugs among injured employees.
Curbing the misuse of legally prescribed drugs could further help her company and other employers address costs while also helping injured employees improve their clinical outcomes, said Charlotte L. Perkins, the company's chief human resources officer.
To reduce its medical spending, Performance Food Group--a Richmond, Va.-based food marketer and distributor--has launched a workers comp pharmacy benefit manager program, contracted with tens of thousands of pharmacies and adopted drug formularies for its typical workplace injuries, Ms. Perkins said.
The company has little trouble directing employees to its workers comp network pharmacies because state laws limiting employers' ability to send injured workers to specific physicians often are silent on pharmacy care, Ms. Perkins told the Disability Management Employer Coalition's annual conference July 15-18 in Boston.
"Interestingly enough, Rx is not covered by a lot of the same laws under state regulations, so you can direct pharmacy a whole lot more than you can on the medical side," Ms. Perkins said.
But getting the network pharmacy and other prescription cost reduction efforts in place required Ms. Perkins to mandate that the company's health insurer, workers comp third-party administrator, a disability case manager and two brokers cooperate to reduce costs.
She was frustrated after years of watching workers comp prescription costs exceed by 50% to 75% the price paid for the same drugs purchased through group health plans--a common problem for many employers.
Over time, the proportion of medical dollars spent on pharmaceuticals in the workers comp system has risen as high as 38%, said Betsy Robinson, assistant vp for Intracorp, a Philadelphia disability case management service provider owned by CIGNA Corp. In contrast, prescriptions account for 15% of medical costs in group health plans.
One solution for Performance Food Group came by contracting with pharmacies in a similar fashion as group health plans, Ms. Perkins said. The pharmacies with which she now contracts--including Wal-Mart Stores Inc., major drug-store chains and small pharmacists in rural areas--are connected through a point-of-sale system.
The electronic system assists with the utilization review of prescriptions provided by doctors to employees. Pharmacists under contract also must provide generic prescriptions when they are appropriate.
Employees like the new system because they don't have to wait for reimbursement after paying for their first prescription, Ms. Perkins said. Instead, Performance Food Group's health care insurer, CIGNA, and Intracorp take on the risk for employees' first prescription fill. If an employee's claim is ultimately denied, CIGNA and Intracorp retain the cost, she said.
Now, 89% of Performance Food Group's new workers comp prescriptions are filled with generic drugs, up from 30% previously, Ms. Perkins said. That compares favorably with a roughly 70% generic fill-rate in the company's health care benefits plan. And, 99% of employees with workers comp claims now receive network rates for their prescription drug expenditures, she said.
The effort has reduced pharmacy costs by 22%, Ms. Perkins said.
On a related front, Ms. Perkins said her goals for the future include further reducing the misuse of legally prescribed drugs, something from which many employers could benefit, she said.
A recently launched drug utilization review already has helped Ms. Perkins identify instances of employees simultaneously obtaining drugs such as Vicodin and OxyContin from their health insurance plans and from their workers comp doctors, Ms. Perkins said.
"It's been amazing to us how many people we caught double dipping...which is where they are getting the same prescription from both sides of the house," Ms. Perkins said.
Addressing employee misuse of prescription drugs often requires properly addressing chronic pain, said David Day, clinical program manager for CIGNA HealthCare in Hartford, Conn.
One in five workers at any given time report suffering from chronic pain, Mr. Day said. Making sure employees obtain the appropriate care to control that pain can reduce the use of narcotics since injured workers are less likely to increase their dose or use multiple drugs to reduce their pain, he said.
But misuse of legally prescribed drugs is only one concern for employers.
A study released July 16 by the U.S. Department of Health and Human Services Substance Abuse & Mental Health Services Administration found 16.4 million U.S. workers currently are illicit drug users and about 15 million heavy alcohol users hold full-time jobs.
Employed drug users cost employers twice as much in medical and workers comp expenses as do their drug-free co-workers, said Mr. Day, who noted such workers have a 60% higher absentee rate and an 84% greater utilization of their health benefits.