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Federal comp agency says pharmacy program addresses audit concerns


Officials tasked with overseeing the workers compensation program for federal workers say they have created an effective pharmacy benefits management program that addresses concerns raised in a scathing report that found millions in overspending and prescriptions written for notoriously deadly fentanyl.

A U.S. Department of Labor’s Office of Inspector General audit of the Office of Workers’ Compensation Programs, released April 4, found that the Federal Employees’ Compensation Act program, which covers injured federal workers, failed to secure adequate pricing and clinical oversight of prescriptions, resulting in $321.3 million in excess spending.

The audit also found numerous other problems with the FECA program, including that it “lacked a pharmacy benefit manager to help contain costs and had not determined if alternative prescription drug pricing methodologies would be more competitive.”

Outside auditors analyzed six years of pharmaceutical data and studied policies, procedures and other documentation. They also compared the FECA program with industry best practices and other workers comp programs.

Assisting with the audit was Maggie Valley, North Carolina-based consultancy CompPharma LLC, headed by Joe Paduda, its Skaneateles, New York-based president.

Mr. Paduda said the worst findings included 1,330 prescriptions for fentanyl, a fast-acting opioid that had been restricted but was prescribed nonetheless. “A number of things that should not have happened did, in fact, happen,” he said.

Overall, the audit found that the FECA program paid for 12 separate controlled substances that “are considered dangerous and carry a high risk for psychological or physical dependence, abuse and addiction,” including fentanyl – named among the most dangerous.

“The concern here is really a patient safety issue. Given all of the notoriety fentanyl has achieved it’s not news to anybody that this is a really dangerous medication,” Mr. Paduda said.

“A policy or procedure where the payer ensured that prior authorizations were done would have prevented these fentanyl scripts from going to patients, of whom there's no evidence that they met the requirements for.”

Auditors examined data from 2015 to 2020 and the Office of Workers’ Compensation Programs has since hired experts to help with its program, the office’s director Chris Godfrey said in a statement.

“The Federal Employee Compensation Act program implemented a Pharmaceutical Benefit Management function in late 2021, which addressed many of the issues raised by OIG and significantly improved patient safety, quality of care for FECA claimants, and reduced drug spending by $87.9 million in the first year alone. These improvements were not reflected in the OIG report, which covered a period prior to the implementation of the PBM,” the statement read.