CIGNA’s entrance into WC drug management

The announcement that healthplan semi-giant CIGNA is getting into the workers comp pharmacy benefit management business is stirring up a good bit of interest.
I don’t get it. Further, the press release has so many factual and inferential errors that it makes me wonder what CIGNA was thinking.

I don’t think CIGNA’s PR department did themselves any favors by choosing a customer who, despite her claims to the contrary, does not seem to understand the basic differences between managing drug spend in WC and group health.
The endorser notes that “double dipping is a huge problem in WC”. Huh? how so? what evidence indicates this is the case? She goes on to claim that they will get additional savings by using a formulary to “steer employees towards generics…and require mail order for maintenance medications.”
Sorry, can’t do that. while a PBM can encourage the use of generics, and by the way every single PBM does, in most states you cannot force use of a generic. And as for requiring mail order – that is just flat out not going to happen. There are NO states that allow a payer to force injured workers to use mail order.
The selling points appear to be that employer customers of CIGNA can now get their workers comp and group health drugs through the company, an offering that according to the press release, will result in dramatic savings overnight.
Let’s parse out the press release to better understand the value proposition.
The program relies on CIGNA’s group health PBM and subsidiary Intracorp’s WC expertise to reduce WC drug costs. Savings are going to come from –
discounts – likely in the form of lower per-pill prices. Nice idea, but WC drug costs are driven primarily by utilization, not by price. It’s easy to sell customers based on price, but if low price worked drug costs in WC would not have increased by more than 10% annually over the last four years.
preventing duplicate scripts – I’m not sure how this works; if CIGNA thinks claimants are getting the same scripts covered by group and WC benefit plans, I’d love to see the evidence. This is one of those claims that sounds great, but the evidence is usually scarce.
electronic payment systems – this is no differentiator; all WC PBMs have this capability. And I can’t see how this will produce savings, unless some employer has been paying drug bills by manually cutting checks.
use of a formulary – this is also something most PBMs have been doing for years. The unspoken issue here is that few are aggressively enforcing the formulary. Most of the scripts that are outside the formulary are filled, as adjusters don’t have enough knowledge to refute or reject the script. A formulary only helps if it can be enforced, and very few PBMs and payers really do.
controlled utilization to eliminate fraud and abuse – there’s some promise here, if CIGNA et al are really going to do something different and implement a strong clinical management program. Alas, the DUR program turns out to be “same old same old” – rejecting early refills and duplicates, with a somewhat new twist – the program will ensure scripts are appropriately billed to the group or comp budget. This last feature doesn’t save any money, it just reallocates it. And the early refill and duplicate rejection has been around for at least ten years.
Finally, the endorser, a human resources exec at a CIGNA customer, applauds the results she has seen – 19% savings and 85% generic utilization rate.
Savings is impossible to judge, as we don’t know the denominator – savings off fee schedule? billed charges? cost per claim?
And the generic utilization rate is about what most WC PBMs have been delivering for years.