Reduce the financial burden and improve pharmaceutical management
When payers think of the benefits of PBMs, it’s important for them to ask themselves what they’re looking to get out of the partnership: “Why are you choosing to use a PBM to help manage your program?” said Tron Emptage, chief clinical officer with Optum.
“Are you wanting to make yourself more efficient as a payer? To make sure you’re doing the best to follow all the workers’ compensation rules and regulations in all the states that you do business? To help with the clinical management of the claims and injured workers you serve via your policyholders?”
While there are a number of benefits to working with a PBM, most payers use them to help manage prescription drug costs. They also employ them to ensure patients are using medications safely, to reduce the use of medications that may not be related to the claim, and to help manage the use of medications like opioids that have potentially dangerous side effects and can be misused.
On the cost control end, PBMs are able to pass savings on to their clients by negotiating prices with pharmacy networks, managing claimant utilization, recommending medications with lower costs of treatment or rebates where applicable, and facilitating the substitution of generic medications for higher-priced brand-name ones.
Utilization management programs are of primary importance in controlling costs for both individual claims and populations of claimants. To assist with the processing of rebates to help lower prescription costs, many workers’ compensation PBMs use rebate aggregators.
Aggregators combine transactional data from several different sources, thereby streamlining the collection processes from manufacturers. Rebate processes take time to complete through systems to validate the dispensing of medications, and because of this, some PBMs may factor in an anticipated rebate and offer clients a discount up front.
Both rebate strategies are used in the industry, but in the latter, the payer may experience an upfront price reduction, rather than having to wait several months for the rebate to be processed by the manufacturer. In this model, the PBM assumes the risk for collecting the rebate.
As stated above, however, the cost savings PBMs offer go beyond their ability to collect rebates and negotiate drug prices. Workers’ comp PBMs often offer their clients pharmaceutical management services, evaluating prescriptions to ensure they’re clinically appropriate for a particular injury. With a PBM partnership, payers can feel assured that injured workers are getting safe, effective treatments. This additional layer of oversight can improve claims outcomes and help injured workers return to work more quickly.
“We want to take care of things clinically to the best of our ability. That means making sure that injured persons are getting safe, efficacious treatment that is evidence-medicine-based and that follows the state-based rules of their claim’s jurisdiction,” Emptage said.
Some payers focus more on the costs of individual prescriptions when talking with their PBM about pricing, but Nack says that view is shortsighted. The total cost of program relies on more than just the pricing on an individual drug; by monitoring which prescriptions an injured worker receives and evaluating whether they’re appropriate for a particular injury or condition, payers can ensure they’re not financially responsible for drugs that aren’t related to the treatment of the covered injury or illness.
“If you’re paying for 20% of scripts that you shouldn’t even be paying for in the first place, those line items become just one component of the program cost,” Nack said.