My post on the efforts by WCPA and others to roll back parts of the NY workers comp reforms has generated a lot of criticism by individuals who appear to consider themselves advocates for the injured worker.
My motives, intelligence, experience, and perspective have all been questioned, with varying degrees of civility. The personal assaults are not helpful nor are they constructive.
It is also quite apparent that these are coming from people who are not only new to this blog but also have not bothered to read much here or on my firm’s site before accusing me of being a shill for big insurance companies and big pharma. While I don’t particularly mind being criticized, I mind quite a bit when the criticism is born out of ignorance.
The other major logical failure on the part of the critics to date has been a lack of understanding of the role of the PBM in workers comp. These self-styled injured worker advocates (conveniently forgetting they are paid by the employers) claim that PBMs provide no benefits. That’s just not the case. Here’s what PBMs can and should be doing:
1. Providing injured workers with access to a broad network of pharmacies so they can get their scripts filled regardless of where they are.
2. Monitoring the prescriptions dispensed across all sources (physician dispensed, mail order, and any retail pharmacy) to identify duplicate and potentially conflicting therapies, inappropriate meds (for conditions unrelated to the disabling condition), potential diversion or abuse, potentially inappropriate dispensing patterns (e.g. oxycontin as initial script for low back pain; Actiq/Fentora; COX-2s)
3. Assisting the payer in managing high-severity lost time claims to ensure appropriate medical treatment. (a surprising number of claimants have more than five prescriptions at any one time, and these can continue for years.
4. Monitoring potential addiction issues by tracking dispensing of specific drugs.
These are functions that individual retail pharmacies just cannot accomplish. They do not have access to or a means of interpreting the data, nor can they effectively address physician dispensing issues.
PBMs, insurers, and retail pharmacies are not perfect. But each has a role to play.
And at the end, this is an economic issue; employers’ workers comp costs in NY are just not sustainable. The gravy train that has been NY WC drug dispensing is ending, and business models will have to change. Just like they have changed and will change in every other industry.
A quick rebuttal to your post:
1. A fair fee schedule with any willing provider would provide the broadest network for patients to fill their scripts regardless of where they are.
2. This is an issue that can be addressed as effectively with insurance companies and health professionals working together to ensure effective and cost-efficient treatments. Your main point of diversion and abuse is a law enforcement matter. No PBM could track that as the experienced miscreant knows enough to pay cash for prescriptions where appropriate. This is something that only the state can track via serialized prescriptions which NYS has had in effect for several years. I doubt they consult with PBM’s when they feel action is necessary.
3. This sounds like nothing more than cost control through denial of treatment. Unfortunately high-impact severe injuries usually have many more issues than simple pain control which can be difficult enough to manage all on its own. Sadly, five meds can be a number on the low side for all too many patients when life-changing injuries are involved.
4. This is 100% a matter for the health professionals who are treating the patient’s pain. One man’s pain management is another man’s addiction and that is pretty much based on clinical assessments, something that PBM’s are generally not involved in. As far as diversion and abuse are concerned, see point # 2.
Mr. Paduda may be correct in stating that all parties involved have a role. But I submit that is one of the few examples that I can think of where it is supposed to be an accepted fact that costs are controlled by the insertion of a middle-man. After all, that is what a third party PBM is, a middle man.
Even so, they may still have a role to play as described by Mr. Paduda. How does that translate into 85 to 95 percent of the profit that is made on any one prescription? That is how it plays out after the PBM keeps its share and doles out what it deigns to the pharmacy that actually buys, stocks, dispenses the medicine and then counsels the patient. And every year the contracts the PBM’s offer grow more onerous. It’s understandable, as the PBM’s are generally publicly traded companies that must show profit growth as well as increasing profit margins every year.
Hey, it IS a great business. Their gravy train just keeps on building momentum. Just don’t get in the way, or they’ll run you down.
By the way, did I mention that PBMs are facing lawsuits for abuses that are driving up drug costs and costing states, municipalities, unions and other organizations millions of dollars. In fact, every major PBM in the country is facing litigation in multiple forums by State Attorney Generals, unions and consumer groups. This would include New York State, which just handed them the WC business 100%, which they mostly had anyway.
Charges against PBMs include that they:
• Hid tens of millions of dollars from plan sponsors;
• Offered reduced co-payments to consumers who use mail
order while charging the employer more for the service;
• Pocketed “rebates” or “administrative fees” secured from
drug manufacturers for switching patients to more expensive brand name drugs or from one competitor’s drug to another’s; and
• Artificially inflated the average wholesale price (AWP)
that is used to set drug prices.
Good corporate citizens all around!
Mr. Levis – thanks for the thoughtful response. There are a few facts of which you may not be aware.
1. A PBM’s margin on each script is extremely tight. this is due to market forces. In fact, several of the major PBMs pass thru all pricing to their customers and charge an admin fee. While some may think PBMs generate high margins on scripts, that is simply not the case. for further information on this, see Medco’s and ESI’s annual report.
2. In re diversion, PBMs do play a very significant role. As I mentioned in the original post, PBMs receive paper bills and mail and retail, so they do have a complete picture of the claimant. And law enforcement relies on payers to provide them information on potential criminal activity; the FBI in particular has established strong ties to and links with payers in an effort to identify possible fraud and criminal activity.
3. Physicians managing pain – in a perfect world, all physicians would be experts in managing pain. this is simply not the case. In fact, workers comp pays for almost 20% of the Actiq prescribed in this country; Actiq is not approved for anything but breakthrough cancer pain, a diagnosis that is rare indeed in WC. That does not mean that Actiq is never appropriate, in fact a client PBM has approved one-third of the Actiq scripts for their WC claimants. Obviously that means they have not approved 2/3. And, they have gotten the treating physician’s agreement to change to an alternative treatment.
4. Re your comments on good v bad PBMs. Couldnt’ agree more. In fact, there are bad PBMs and good PBMs, just like there are bad pharmacies and good ones. Are all your retail competitors honest, upstanding, pure, and motivated solely to do what is right for the claimant?
5. I reiterate, there are many states with enabling legislation that promotes direction of care, and these states have significantly better outcomes, defined as patient satisfaction, return to work rates, and medical costs, than does NY. If it works so well in other states, and if NY’s system is so obviously underperforming, why the resistance?
6. A retail pharmacy would find it very difficult to question a prescribing physician, as to do so might cost it a significant source of referrals. PBMs can, and do interact with physicians, and that interaction can be quite helpful.
Finally, I’d note that I have personally audited many cases where the pain meds and related scripts were well in excess of $300 0 per month. In at least half the cases, the treating physician agreed to modify the treatment plan after being contacted by the PBM’s physician.
There is a major problem with overprescribing by many physicians, and retail pharmacies can, and have, done little to deal with this issue.
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