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Employers explore PBM integration

Posted On: Nov. 27, 2011 12:00 AM CST

Employers explore PBM integration

Experts in pharmacy benefits management say more employers are considering whether integrated PBM models for their group health and workers compensation programs can help them better manage prescription drug safety and costs.

Consolidated services are getting a closer look as employers strive for savings, insiders say, despite differences in the insurance programs that make pharmacy benefit integration a challenge.

“I think employers are looking for a financial solution, as they should be,” said Brian Carpenter, Tucson, Ariz.-based vp of PBM product management for managed care company Coventry Health Care Inc.

PBM integration has been used by such firms as Philadelphia-based ARAMARK Corp., which said this year that it had begun using the same PBM for workers comp and group health. The move allowed the multinational food services company to negotiate lower prices for workers comp prescriptions.

Other companies seem to be following suit, according to St. Louis-based Express Scripts Inc. The PBM, which manages pharmacy programs for workers comp and group health, said “self-insured, self-administered” employers increasingly are interested in combining pharmacy benefit programs.

Typically, such companies are looking to improve safety for injured employees, said Rich Leonardo, senior director of sales for Express Scripts' workers comp unit.

“Employers see a benefit in having a comprehensive view of their employees' prescription drug use,” Mr. Leonardo said in a statement.

There are “modest” financial benefits for employers that use Express Scripts for both PBM programs, Mr. Leonardo said. But the larger advantage, he said, is lowering workers comp costs through improved prescription management and oversight.

“Greater savings opportunities come from employers using the combined data to initiate case management intervention to assist getting an injured worker back to work,” Mr. Leonardo said.

Sedgwick Claims Management Services Inc. has sought to strike a middle ground. The third-party administrator, which contracts for PBM services with Express Scripts and Tampa, Fla.-based PMSI Inc., has asked the providers to add group health elements to their workers comp pharmacy services.

That includes using step therapy for workers comp prescriptions, where patients are prescribed low-cost drugs at first and given more expensive medications if the initial treatment is ineffective, said Jim Harvey, Dallas-based vp and managed care practice lead for Sedgwick CMS.

“It's a matter of taking the solutions that work in the group health model and that are allowed in the regulatory environment in the workers comp market,” Mr. Harvey said.

There are obstacles to integrating PBMs for workers comp and group health programs. Brenda Motheral, executive director of the Pharmacy Benefit Management Institute in Plano, Texas, notes that health care is regulated by federal guidelines, while workers comp laws differ from state to state.

Those legal nuances, along with different formularies used by the two insurance programs, can make it tough to integrate pharmacy benefits, Ms. Motheral said.

“Operationally, it's not as synergistic as you might think,” she said.

David George, chairman and CEO of Duluth, Ga.-based workers comp PBM Healthcare Solutions Inc., says that pharmacy benefit consolidation is an unlikely choice for employers because of inherent differences in how group health and workers comp plans operate.

For instance, coverage for workers comp medications usually differs from pharmacy copays under a health insurance plan, Mr. George said. The markets also differ, he said, because group health plans cover most or all of a company's employees, while workers comp pharmacy benefits are limited to injured workers.

“The fundamental difference in workers comp is the eligibility is not established until you show up for care or service,” Mr. George said.

Coventry's workers comp PBM, dubbed First Script, uses a pharmacy network from PBM Medco Health Solutions Inc. Mr. Carpenter said Medco aggregates employee profiles for group health and workers comp plans, and it can determine whether a worker is receiving duplicate prescriptions or early refills.

While there are benefits to PBM integration, Mr. Carpenter said the model can be challenging for employers because workers comp and group health plans often are managed by separate departments.

“You have (human resources) running the group health benefit and you have risk managers running workers comp and disability,” Mr. Carpenter said. “Financially, those are in different buckets in different employers' houses.”

Despite the hurdles, Mr. Carpenter said integrated PBM models could become more commonplace as more employers seek ways to manage their drug costs.

“I think it's exploratory at this point until there's a better alignment within the industry,” Mr. Carpenter said.