By Mike Cirillo, President, myMatrixx
As the worker’s compensation pharmacy benefit management (PBM) landscape evolves and consolidates, several startups have entered the marketplace with promises of low rates and transparency. But what exactly does that mean?
Transparency means different things to different people. Knowing how much a medicine costs is transparency. Understanding the exact amount of a dispensing fee is transparency. However, no pharmacy management program will benefit from transparency or low per-script prices alone.
Imagine, for a moment, if a restaurant was fully transparent with its menu. Instead of having a cost per entrée, there is a cost per ingredient. Knowing the cost of a tablespoon of olive oil, 12 ounces of pasta, and a dash of oregano would provide transparency, but it wouldn’t necessarily help you decide which meal to choose. Full transparency sounds good, but it doesn’t always help the cause.
To properly evaluate a PBM, it’s essential to first define your organization’s objectives for pharmacy management. Objectives typically include providing access to appropriate medications, protecting patient safety, containing costs, and complying with regulations. Some buyers of PBM services also need to have their formularies customized to their employee population. Firefighters, for example, may require special burn medications.
Once there is clarity on the objectives, the insurance company, third-party administrator, employer, or other buyer should carefully examine a PBM’s offerings to make sure the potential partner possesses the capabilities to deliver the value the organization needs. Consider these points when looking at a new PBM partner.
1. Patient Safety
Investigate the depth of clinical resources and tools in place. Clinical management should be embedded in the adjudication process, and the PBM needs a deep bench of pharmacists who are experienced in workers’ compensation and can intervene in challenging cases. Does the company continually review the latest research, spot trends, and develop solutions? Do the PBM’s clinicians have the expertise to customize your formulary and forecast its implications? Does it even employ clinicians to perform this kind of work?
Clinical oversight is crucial to a patient’s safety, successful outcomes and even cost containment. Without clinical oversight, a claim can easily go off the rails. Drug interactions, contraindications, duplications, dangerous drug combinations, and the misuse or wrong combination of opioids, benzodiazepines, and muscle relaxants can cause serious health issues, including addiction and dependency in some cases. These complications may delay recovery and be expensive to treat. And, the payor may end up covering medical costs as well as making extended indemnity payments.
Some new PBM’s do not provide clinical services and the buyer will need to purchase them separately or ramp up to deliver them internally.
The size and management of the pharmacy network can impact outcomes. It’s important to examine the quality of the network, and the expertise and ability of the PBM to ensure network compliance with state workers’ compensation rules and regulations.
Worker’s injuries do not have business hours, so it’s best to make sure your PBM is there when your employee needs it. Can a pharmacy verify compensability off-hours? When your PBM isn’t there, you can be sure there are plenty of opportunistic pharmacies willing to jump in.
Find out the hours that customer support is available and make sure it aligns with your adjusters’ schedules. Workers’ compensation is a business of exceptions. A significant percentage of prescriptions – up to 50% in some organizations – require prior authorization from the adjuster. Discuss the tools the PBM uses to manage rejections and how fast it can give adjusters the data needed to effectively and efficiently resolve them. Adjusters typically manage 150 claims at a time with 10 to 15 different services on each, and need time-saving tools.
Data analytics must deliver more than pricing reports. Whether it’s evaluating a specific drug or an injured worker’s complete pharmacy regimen, analytics should provide reports that payors can act upon immediately to improve individual patient outcomes or the entire pharmacy program performance.
More importantly, the PBM needs to have experts to interpret the findings and offer insight into ways to improve trends going forward. Intervention modeling and predictive analytics can dramatically affect a pharmacy program’s outcomes. Plus, the PBM’s analytics expertise can enhance your products and operational processes.
5. Cost controls
Workers’ compensation PBM’s have successfully contained prescription volumes and costs since their inception. Payors’ total drug costs are down more than 31% during the past eight years, according to CompPharma’s Prescription Drug Management in Workers’ Compensation survey report. This is due in part to full-service PBM’s purchasing power, network control, technology, and clinical services.
Per-script-only pricing ignores a major pharmacy cost driver, utilization. It’s the per-script price multiplied by utilization that equals the overall cost. Spending less per script while paying for unnecessary drugs that can be misused or are prescribed in dangerous combinations threatens both patient safety and the bottom line.
Pricing methodologies will change, so don’t get hung up on one. Cost is important and transparency is important, but accessibility and patient safety are more important. When selecting a new PBM, be sure to focus on the total value it delivers. Make sure it can deliver all the high-value services needed to meet the objectives of your pharmacy management program.
About Mike Cirillo
As President of myMatrixx, an Express Scripts company, Mike Cirillo is responsible for overseeing the workers’ compensation division’s national strategy and corporate operations across the U.S. His responsibilities include developing the company’s growth and productivity initiatives as well as forming new business and industry partnerships.
Mike has proven to be a successful and trusted leader with a strong knowledge of the PBM industry. He joined myMatrixx with more than 25 years of leadership experience in workers’ compensation, claims management, ancillary services and pharmacy. Most recently, Mike served as President of Specialty Solutions Rx, where he helped deliver cost-reduction solutions to national accounts and payers by enabling better patient outcomes.
Through his experience, Mike has led efforts in combatting the high costs of medications and improving patient safety in workers’ compensation. Mike has a strong focus on keeping our clients and their injured workers at the forefront of everything we do.
Mike holds an MBA from Rensselaer Polytechnic Institute and a Bachelor of Science in Business Administration with a concentration in Accounting from Western New England College. He is a Certified Internal Auditor and a Member of the Institute of Managerial Accountants.
He currently resides in Tampa, Florida, and is an avid Boston sports fan.
About myMatrixx, an Express Scripts company
myMatrixx® is a pharmacy benefit management company laser focused on workers’ compensation. The unique combination of myMatrixx and Express Scripts makes us the only workers’ compensation PBM that can deliver customized solutions and exceptional customer service while leveraging Express Scripts’ pharmacy network, comprehensive clinical team, mail order program and specialty solutions to meet the individual needs of our clients and their injured workers. For more information, visit myMatrixx.com.
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