The first fill conundrum

OK, we’re now going to abruptly transition from the broad interest (Canadian health care policy) to the hairs-breadth narrow – this is for the folks who deal with workers comp pharmacy issues.
One of the biggest challenges facing WC payers is getting claimants into their PBM program. My firm has surveyed payers about WC pharmacy management each spring for four years, and this is the one issue where there has been no change over that time.
Retail pharmacies’ difficulties in determining eligibility is the key reason per-script costs are so much higher in WC than in group health, Part D, or individual heath insurance.
Here’s why.

First, a definition. The ‘first fill’ is that initial script, typically resulting from the initial office visit immediately following an injury. This happens about 7-10 days before the insurer even knows a claim has occurred.
Second, the background. Total WC pharmacy expenses in 2007 will be somewhere over $4 billion. By comparison, total US Rx expenditures will be above $200 billion. WC just isn’t significant.
Third, unlike the group and Part D and ‘regular’ health insurance markets, to date there has been little consolidation among WC PBMs; there are perhaps ten WC PBMs that have any significant market share, say above $40 million in annual spend. Most of these PBMs are WC only. So we have a lot of PBMs each with a relatively modest piece of a really small market.
The problem should be pretty obvious. A claimant shows up at a retail pharmacy, script in hand. The pharm tech asks for their card, they say it’s workers comp. The tech then asks if they have a drug card, the claimant scratches their head, and says they don’t. The tech is then faced with four choices.
First, the pharm tech could call the employer, find out who the payer is, then find a phone number for the payer, call them, ask which PBM they use, get transferred around, and eventually figure out where to send the script for processing. Not too likely.
Second, they could ask the claimant to pay cash. Somewhat more likely, but they don’t want the claimant to go away mad – and since the average WC script is over $100, many claimants don’t have that kind of money in their pockets at all times.
Third, they could process it under the claimant’s group health card – if they have one. This probably occurs more than anyone in the industry will admit, so I’d say this is the second most likely outcome.
Fourth, the pharm tech will say, “no problem”, fill the script, and send it to a third party biller. The TPB will pay the pharmacy a discounted amount for the script, then try to get reimbursed. If you guessed this as the most likely outcome, congratulations, you’ve just won a free copy of my firm’s Fourth Annual Survey of Prescription Drug Management in Workers Compensation.
The above scenarios are why the industry’s first fill capture rate is probably about 25-35%. This was the first year we actually asked respondents for this stat, and fewer than half had any idea what there’s was. Of the ones that did have any idea, most were making educated guesses (except one, a state fund, that knew it to the decimal point).
So, if you’re wondering why your WC drug program isn’t capturing lots of first fills, now you know. And if you are capturing more than 35%, you’ve got a great story to tell.
What does this mean for you?
It is time to get serious about first fill capture.