Sixth Annual Survey of Prescription Drug Management in Workers Compensation

The decrease in the workers comp drug cost inflation rate that persisted for five years appears to be over. According to HSA’s Sixth Annual Survey of Prescription Drug Management in Workers Compensation, the five-year ‘decrease in the rate of drug cost increase’ is over, as drug costs across the industry were up 7.5% in 2008, compared to 7.7% the year before.
Workers comp payers, including large and mid-tier insurers and TPAs, are increasingly knowledgeable about drug costs, utilization, drug management approaches and programs, and cost drivers. However, while some are quite sophisticated, a few continue to exhibit little understanding of this cost area; unsurprisingly these are the payers with the highest drug cost inflation rates.
In contrast to prior years, the drug cost inflation rate tended to be lower at smaller payers than their larger competitors, as smaller payers seem to be ‘faster to market’ with utilization controls, adjuster education, and data sharing with their PBM partners.
Once again, utilization is seen as the key driver, with respondents citing over-prescribing, over-use of pain medications, and physician prescribing patterns as key reasons for cost increases.
The recent URAC initiative to ‘certify’ work comp PBMs met with mixed reviews; twice as many respondents considered URAC certification ‘not important at all’ as viewed it as ‘extremely important’.
To combat cost inflation, savvy payers are increasing their investment in data mining and analytics, adopting step therapy programs, enforcing mandatory generics, and calling on their PBMs to provide clinical support for drug management. Payers are more knowledgeable about and ‘on top of’ their drug cost and utilization data, with most having ready access to generic fill rates, generic efficiency, network penetration, price changes, and other summary information. First fill capture statistics are also more widely captured, as payers seek to gain control over drug usage as early in the claim cycle as possible.
Continuing a five year trend, no one PBM has established a dominant position in the market as the leading PBM. However, PBMs are all rated much higher than Third Party Billers.
In partnership with the good people at WorkCompCentral, I’ll be providing an overview of the most recent findings from the in a webinar scheduled for Tuesday, January 12 from 1:00 – 2:00 pm eastern. The cost for the webinar is $149.
Webinar registrants will receive a copy of the Survey results, to register click here and enter the code ‘Hsarx’.
The public version of the Survey will be released on Monday, January 18. If you would like a copy, email info AT healthstrategyassoc DOT com. Seminar participants will receive a separate, detailed version of the Survey.