The efforts by third party billers and their partners to overturn a key part of the NY workers comp reform package appear to be gathering strength. Two legislators have introduced a bill that would kill the ability of payers to direct injured workers to specific pharmacies.
The rationale, that the pharmacies would somehow deny scripts, is ludicrous.
Pharmacies don’t decide which scripts to fill, doctors order the scripts and in the vast majority of cases, the scripts are covered. Unless they are for conditions not related to the injury, they are paid.
The scare-mongering on the part of retail pharmacies is understandable – up till now, workers comp has not had a fee schedule for drugs, so pharmacies could charge essentially anything they wanted. Especially those pharmacies that specialized in workers comp; the “usual and customary” pricing used to determine reimbursement in NY was based on the cash price at that pharmacy.
This gravy train was funded by the state’s employers, who are burdened with a dysfunctional and very expensive workers comp system.
All Workers’ Compensation insurance carriers MOST CERTAINLY DO routinely deny medical treatments of all kinds including prescriptions. The Workers’ Compensation system is litigious by design.
As in any successful business, Workers’ Compensation insurance carriers aim to please their customer who happens to be the employer. One way they do this is by containing costs and reportedly passing on the savings to the employer with reduced premiums. The most effective way to contain the costs is by denying or delaying claims. Insurance company adjusters are specifically trained on how to deny/delay payment on claims and are typically offered incentives for doing so.
A contracted pharmacy or PBM works for the insurance carrier. If the carrier denies the claim for any reason, that contracted pharmacy or PBM will therefore also deny the medications.
Ask anyone who was ever hurt at work and you will find that the VAST MAJORITY OF PEOPLE INJURED AT WORK WILL BE DENIED PAYMENT OR MEDICAL TREATMENT INCLUDING PRESCRIPTIONS AT SOME POINT IN THEIR CLAIM, EVEN VALID CLAIMS. This is why there are so many Workers’ Compensation attorneys.
Most retail pharmacies do not even accept Workers’ Compensation claims unless the injured worker agrees to pay cash and seek reimbursement directly from the insurance carrier. This is because INSURANCE CARRIERS ROUTINELY DENY AUTHORIZATION AND OR PAYMENT FOR PRESCRIPTIONS. For someone on a limited income like an injured worker (or no income if the claim is in litigation), this can often mean going without their prescribed medications. If the injury is life threatening, the result can be devastating. Certainly a delay in the treatment of an injury only lengthens the time that the injured worker is disabled. The end result here is that the insurance company directs the care and treatment instead of the injured workers’ own physician.
By REQUIRING an injured worker to utilize the insurance carriers’ contracted pharmacy, the carrier maintains control over the medical treatment of the injured worker instead of the physician who treats the injured worker.
There are a handful of pharmacies nationwide that cater directly to the injured worker. These are mail order pharmacies that work with the injured, their physician and attorney to provide prescriptions when the injured worker needs them, not just when the insurance company chooses to authorize treatment.
It seems logical that anyone injured would want the ability to choose a provider that is licensed to provide medical care and treatment looking out for their best interest versus one that works for the insurance companies.
A set fee schedule is the best way to control the costs of prescriptions. Allowing the payor to direct the care and treatment of the injured workers is potentially hazardous to the overall health of the injured worker and will, over the life of the claim actually increase the cost to the carrier and employer by prolonging the recovery of those injured at work, not to mention the additional costs and legal fees associated with litigating care and treatment.
The reason Titan Pharmacy succeeded as a community pharmacy specializing in worker’s comp is specifically because we accepted contested cases and carried the patients at OUR RISK to the final adjudication of the New York State worker’s compensation board. If it wasn’t for the huge number of controverted worker’s compensation cases in New York State we would have never developed the loyal patient base that we have up until now been privileged to help.
Pharmacies very much decide which prescriptions to fill, and they routinely deny prescriptions as anyone with almost any health plan could tell you (I suspect that would include Mr. Paduda). If the PBM card that the injured worker presents does not authorize and pay via real time online adjudication, 99.9% of pharmacies return the prescription to the patient with the advice that the insurance company will not pay, regardless of whether or not these prescriptions have any relation to their injury. As a pharmacy specializing in worker’s compensation, Titan Pharmacy filled those prescriptions in coordination with the worker’s doctor and lawyer even though there was no guarantee of payment.
Mr. Paduda is correct in pointing out that there was no worker’s comp fee schedule in NYS until the 2007 reform. However, there is one now. And we support it. Our pricing up until now was reasonable and negotiated with the insurance carriers. In fact, we challenge Mr. Paduda to produce the prices charged by PBM’s for these same worker’s comp prescriptions. If he manages to pierce their army of attorneys to obtain this ‘proprietary’ information, we will gladly reveal what our prices were for these same prescriptions. We say with the utmost confidence that our billing would be the same, or below that of the PBM’s which were just handed a monopoly over the NYS worker’s compensation prescription market. Despite that, you can rest assured that none of these same PBM’s agree to carry any worker’s controverted case to resolution.
As there is now a fee schedule, the only function of denying injured workers their choice of pharmacy is to allow further control over their cases by their insurance carriers, which, as a matter of business, have an adversarial relationship with the worker. It also sucks the lion’s share of profit to be made filling these prescriptions to out-of-state PBM’s who neither hire employees in New York State nor pay New York State taxes. Hard to see how this is anything but a ‘lose-lose’ for both the injured workers and citizens of New York State.
For the record, Titan Pharmacy does not have nor has ever had any type of relationship with the WCPA (worker’s comp pharmacy alliance), which Mr. Paduda implies. Rather we are a small community pharmacy who will be laying off workers and searching for a new business model come July 11th 2007. This in contrast to the celebrations taking place in PBM’s across the land as they determine which accounting gimmicks to use to hide their latest spike in profits and how to bonus out the windfall to their CEO without incurring taxes.
-Peter Levis
Supervising Pharmacist
Titan Pharmacy, New York State
I forgot to mention the 100 or so controverted cases we are currently carrying who we will have little option but to turn away come July 11th. As to what exactly they will do, we can only hazard to guess, but most probably the answer is suffer.
-Peter Levis
Supervising Pharmacist
Titan Pharmacy, New York State
This may take a while. I’m going to go thru Mr. Levis’ issues in order.
First, how wonderful it is to have providers whose only interest is that of their patients. Providers who have to date meekly acquiesced to the high reimbursement rates they have received from WC payers Yet they accuse PBMs of doing nothing but driving outrageous profits to pay their execs way too much money. A bit hypocritical, perhaps?
Mr. Levis, I do not doubt your intentions are noble. I’d also ask you to consider the costs of the present WC system in light of the employment losses in NY. This is an industrial competitiveness issue, and a tax rate issue. And to date, providers have been benefiting from funds transfered from employers and taxpayers.
Mr. Levis, NY is not the only state in the country. And many states with employer direction, strong network regulations, and fee schedules have excellent workers comp outcomes, timely payments to workers and providers, and lower costs for employers. How can these states do something that you contend can’t be done?
As to pricing “negotiated with insurance carriers”, I’m quite curious as to how that negotiation went, as the reimbursement requirement udner the state regs is quite clear, and leaves little room for “negotiation”.
I love a challenge, Mr. Levis. Pricing for PBMs in NY ranges from AWP to AWP-5% + $5.00 for brand and AWP-10% to AWP-20% + $5.00 for generics. This depends on volume and value-added services delivered; these services can include clinical management, data mining, and physician prescribing pattern analysis. This covers the “role” of PBMs that you denigrate.
Re controverted claims – you may want to consider the other factors that exist in the workers comp environment. This is not a Rx issue. It is much bigger than that – the state needs broad-based reform, and not just drug fee schedules and direction. All of us tend to get so focused on our little areas that we forget there are many macro factors that directly and dramatically impact WC. And the changes to the WC statute go a long way to addressing these issues. Therefore, your concern over controverted cases is a moot point, or at the very least an issue that should be suspended until we see how the other reforms work.
Finally, I never implied or suggested that Titan or any other pharmacy was tied to WCPA.
Mr. Levis, the bus is coming. You can either get on it or stand in front. If you believe Titan can add value to the customers who pay your bills, then by all means feel free to educate us. My sense is your organization is so tied to the injured worker that you have lost sight of who pays the bills. And if NY does not get its workers comp costs under control, you won’t have an industry to insult.
Joe Paduda
Mr. Paduda has a way of resorting to cynical insinuation about the motives of others, it seems, especially when he has little in the way of cogency or logic to offer in response to the facts presented by the respondents here, who have very effectively demonstrated the shortcomings and omissions of Mr. Paduda’s bizarre pro-PBM arguments.
And on what side is Mr. Paduda’s bread buttered? Are we to believe he has no interest in this industry, just happens as an innocent observer to take the pro-corporate pro-insurance company pro-drug behemoth line on everything, no matter how illogical, because, you know, big is always better?
How do you make your living, Mr. Paduda?
Hey Joe, one quick question. If your mother, brother or child was injured at work, who would you rather have providing prescription services to him/her? A pharmacy that clearly works for the injured worker or a PBM that works for the insurance carrier and employer who are only trying to contain their costs, often at the cost of your loved ones’ health?
Mr. Paduda is correct to point out that the bus is indeed coming to run over my business, and as such I have less time than I would like to engage in these debates.
Mr. Paduda does not doubt my noble intentions. So he states after an opening paragraph where he lacerates me with sarcasm. He mentions elsewhere on his blog that ad hominum attacks are not constructive. Perhaps that doesn’t apply to him.
Mr. Paduda assigns a wide range to the PBM reimbursement rates. Based on what I’ve been able to glean from my years in the business, I would opine that AWP plus a dispensing fee that grows when mail order is involved is closer to the truth than anything else.
Regarding our fee schedule, we modeled it around the NYS NF fee schedule which is listed at AWP + $4.85. Let it suffice to say that we were paid about AWP with no dispensing fee for the large majority of our claims. On other claims we were paid at PBM contract rates (AWP – 18% on brands, MAC on generics) by arrogant PBM’s who challenged us to take them to court, banking, it appears, on the fact that we were a small player. To date, we have sued no one.
Mr. Paduda doubts our negotiations, but we came to amiable agreements with a number of insurance companies in the area. At least one of them, a local WC insurance company, admitted to us that our fees were the cheapest, and that included the PBM’s they were dealing with.
We still have claims outstanding going back to 2001 that the insurance companies relentlessly ignore despite repeated attempts to get paid (makes me wonder how the PBM’s fare in that regard. Very well, I would guess.)
As I have stated, we support a universal fee schedule that applies to all parties involved. We would welcome the opportunity for a level playing field, but such ideas don’t seem to have much traction in today’s America as far as small businesses are concerned.
Your juxtaposition of links to WCPA along with the article in a local paper regarding our situation very much implied a connection, one that you could have easily addressed. This is the main reason I even responded to you, as you were painting with a very broad brush and smearing by association.
My issue with the WC reform is that it didn’t even attempt to address the issue of the controverted claims other than to issue grand decrees about ‘rocket dockets’. Sadly, my biggest problem with the reform is the one you simply dismiss as moot. What you are really saying is injured workers with controverted cases are moot. I’m sure the insurance carriers agree.
You are correct that I side with the injured worker rather than the insurance company which does not see a person, but rather a formula of costs that needs to be whittled away and shaved down. My sense is that you are so tied to the bill payor that you have lost sight of the injured worker. I have included a statement at the end of this post from a patient I took care of whose case was controverted from day one.
Statement of Achilles Christofis:
On My Workers Compensation Case and
Medications Obtained for My Condition
My name is Achilles Christofis. I was born in Calymnos, Greece in 1939 and immigrated to the United States more than twenty years ago. For twenty years until September 2004, I worked as a bridge painter at various companies.
In 2004, my doctor diagnosed me with lead poisoning. I was dizzy and fatigued, could not walk any distance and experienced a terrible full-body pain, which I was told was in my bones. I was told that all of these symptoms resulted from my employment of 20 years as a bridge painter.
I was completely unable to work. In September 2004, I filed a claim for Workers Compensation under New York State law.
My doctor prescribed various medications to lower the lead levels in my blood and to treat the many related symptoms of lead poisoning. My prescriptions were filled by Titan Pharmacy in Queens. (The medication seems to have worked, because my lead blood-levels went down and many of my symptoms were relieved.)
As soon as my claim for workers compensation was filed, it was controverted by my insurance carrier, the State Insurance Fund (SIF). SIF contested that my injuries were workplace related. This meant that SIF refused to pay any of my bills for doctors, hospitals, physical therapy or prescription pharmacy, pending a decision of the New York State Workers Compensation Board.
In fact, during the entire time my case was controverted, I personally did not receive any benefits at all, either for expenses incurred or for any living expenses. I was unable to pay for my medicines out-of-pocket. Just the initial medication prescribed to treat my lead poisoning cost more than $1,000 and I had no income.
Titan Pharmacy continued to fill my prescriptions from September 2004 until April 2007, even though SIF was not paying these bills pending a decision.
On April 23, 2007, the Workers Compensation Board held a controversion hearing in my case. They found that I had all along been eligible for workers compensation as a worker with a workplace-related injury. Therefore the State Insurance Fund was liable for the costs of my prescribed medicines, which Titan Pharmacy had been carrying for me until then. SIF will now have to finally pay for the costs of my medications, dating back to the original controversion.
I have learned that the new workers compensation reform will take away the patient’s right to choose a pharmacy starting in July 2007. When this goes into effect, the new part of the law will allow insurance carriers like SIF to force workers compensation patients like myself to use only a pharmacy chosen by the insurance carrier.
In contested cases like my own, the pharmacies chosen by the insurance carriers will not fill prescriptions, unless the patient can pay out-of-pocket.
If this law had been in effect in 2004, I would not have been allowed to use a community pharmacy like Titan, which was willing to carry the risk of providing prescription medication even if I could not guarantee payment.
If I had been forced to pay out-of-pocket, I would not have been able to afford any medication at all. I do not know what would have happened to me.
This is a bad provision. Patients should be free to choose their own pharmacy. Pharmacies should be free to take the risk and provide services like Titan Pharmacy did in my case.
I feel very sorry for anyone making a workers compensation claim who runs into this problem after July 10th. I strongly support an immediate change in the Workers Compensation Reform to fully restore the patient’s freedom to choose his or her own pharmacy.
Dear Peter: I think many of your points are very valid. It is important that a company like yours survives. Over time (if you have any left) choice will be demanded and the challenges and mistakes associated with NYS WC will again be addressed. I would suggest that you seek out “self insured” municipalities, schools and perhaps other similar groups and “market” your business to them. I like Joe very much and respect much of what he says. I know him to be honest, honorable ,well meaning and a kind hearted man. Joe could help your company respond to these issues no matter how misguided his comments are in this case. I would urge you to talk directly with him. Joe give the guy a break. Perhaps some product positioning, business strategy and marketing advice would be forthcoming???? Good luck.
Jack
Dear Jack: Thank you for the good wishes. We are really very busy scrambling to figure out where we are going, and so the lag time in my response. We actually have been trying hard to take your advice, but our progress up to this point is hard to measure. I appreciate your comments on our behalf. Thanks again for the good wishes, and we will consider your advice re: contacting Mr. Paduda.
-Peter
I DO NOT UNDERSTAND THIS, IF A PERSON IS INJURED AT WORK AND IT IS THE NEGLAGENCE OF ANOTHER WORKER, THE INJURED SHOULD NOT BE TURNED DOWN FOR ANY KIND OF MEDICAL, POINT BLANK AND SIMPLE! IF THE INSURANCE CO. IS WORRIED ABOUT FRAUDULANT PEOPLE WOULDN’T THE MEDICAL SCREENING HELP SORT THEM OUT? I HAVE BEEN INJURED WHILE AT WORK FOR GOING ON NEAR SEVEN YEARS NOW, I TOO HAVE HAD MEDICAL EXAMS, PRESCRIPTIONS, AND THE LIKES DENIED! IN FACT I HAVE EVEN GONE WITHOUT PAYMENTS FOR THE BETTER PART OF SIX MONTHS DUE TO THE INSURANCE CARRIER JUST BEING, WELL WE’LL SAY DOING THERE SO CALLED JOBS! IF THEY WERE HURT AND HURT SERIOUSLY LIKE I AM WITH BACK PROBLEMS, HAVE GONE THROUGH SURGERIES AND HAVE YET TO FIND COMFORT WITH THE SURGERY AND PAIN MEDICATIONS (87% NOW DISABLED) WOULDN’T THEY TOO WANT THERE MEDICATIONS AND TO BE ABLE TO SEE THERE DR.’S? LET’S NOT FORGET ABOUT THE RISING COST OF EVERYDAY LIVING SO WHAT LITTLE BIT THAT THEY WOULD GET FROM WORKERS COMPENSATION WOULD HELP, UNLESS HOWEVER THE INSURANCE CARRIER FORGETS TO MAIL THE CHECK, AND IF YOU CALL THEM THATS WHAT THEY TELL YOU: THE CHECK WAS SENT ON????? GIVE IT ANOTHER COUPLE OF DAYS AND IF YOU DON’T GET IT BY THEN CALL US BACK (IF YOU’RE LUCKY TO BE ABLE TO, IF THE PHONE ISN’T SHUT OFF BY THEN!!!) AND WE’LL CANCEL IT AND SEND OUT A NEW ONE!!!! LET’S NOT KID OURSELVES, NO ONE WANTS TO DRAW WC, HOWEVER IF THERE REDUCED TO DO SO FROM AN INJURY THEN THEY SHOULD GET WHATS COMING TO THEM, IN MEDICAL EXAMS, PRESCRIPTIONS AND MONEY!!! LET’S FACE IT… I AM BUT 39 YEARS OLD NOW WHEN I GOT HURT A WAS A MERE 32, I NOW HAVE NO WAY TO MAKE THE “NEST EGG” THAT EVERY AMERICAN WANTS, AND TO BE ABLE TO PUT THERE CHILD(REN) THROUGH COLLEGE!!! IT ALMOST FEELS AS IF A PERSON IS GETTING A BEATING FROM GETTING HURT AT WORK, IN MY OPINION PEOPLE SHOULD STOP AND THINK ABOUT THE LAWS AND SUCH THAT GOVERN WC, AS ONE DAY IT MAY BE THEM OR A LOVED ONE THAT HAS TO TRY AND GET IT, OR A LACK OF IT!!!