Los Angeles, CA -(BusinessWire)- “In a review of 8,012 compound pharmacy prescriptions, totaling over four million dollars in potential expense, 97% were denied based on a retrospective pharmacy review for medical necessity,” reported James Schlueter, president of Effective Health Systems.
The study addressed medical bills submitted to CA workers’ compensation claims offices in the last quarter of 2012. The bills came from out-of-network pharmacy providers and had not undergone a prospective UR. The review involved prescriptions from 478 physicians and 190 pharmaceutical providers. Only 41 providers were responsible for 50% of the requests; just 31 pharmacy providers fulfilled 80% of the prescriptions – and one pharmacy accounted for 25% of all the bills.
According to Schlueter, “Typically, these pharmacies submit bills knowing that they will go to a lien process in CA and negotiate a reduced payment; thus they inflate their bills. The frequency and amount of this abuse has grown to where some payers determined it was time to change the game and use more sophisticated resources to remove the economic attractiveness of this abuse. Not only is the financial abuse of the system substantial, it is providing unnecessary and often-dangerous drugs to injured workers. The pharmacy review finding of an absence of medical necessity by medical reviewers allows the bills will be solidly denied. The gross savings produced by this project exceeded $3.8 million dollars.”
Schlueter noted that the total cost of the program was about 10% of the billed charges. He compared that cost to negotiated settlements that, excluding admin costs, tend to range from 13% to 25% of the billed charges. Schlueter emphasized, “That negotiated amount still leaves those providers with a profit; and a reason to continue. Unlike the negotiation process, the pharmacy review strategy may end the economic incentive for pharmacies to continue this abuse. With a pharmacy review denial on medical necessity, they get nothing.”
Schlueter said, “This kind of review would have been far more complicated, time-consuming and costly prior to the use of Effective Health Systems’ BaseLine technology. BaseLine delivers interoperability to claims systems and multiple medical specialty companies servicing the payers. BaseLine makes this kind of operation one seamless process between multiple parties. It’s an example of BaseLine’s ability to bring greater efficiency and effectiveness in managing the complex world of worker’s compensation today. BaseLine is used in many other venues to maximize the performance of professionals on the front-lines of workers’ compensation.”