PMA White Paper Details Eight Ways a Pharmacy Benefits Management (PBM) Program Can Control Workers’ Comp Costs
March 01 2010 - 10:10AM
Business Wire
Workers’ compensation insurers and third-party administrators
(TPAs) offer organizations something far greater than just
necessary coverage and/or service—they offer peace of mind for the
wellness of employees. Yet, with the pressure to improve
bottom-line results, how can organizations trim workers’
compensation costs while getting every bit of that intangible peace
of mind?
One of the surest ways to control, and perhaps reduce, your
total workers’ compensation cost is to make certain your insurance
carrier or TPA works with an effective, results-driven PBM,
according to Tina Preisig, Senior Vice President of Managed Care
for PMA Companies and author of the Company’s new white paper, “The
1-2-3 of an Effective PBM.”
“Workers’ compensation is a vital part of doing business for any
organization,” Preisig said. “Now may be the time to revisit your
program and find out whether or not your PBM is achieving as much
as possible for your injured workers and your organization’s bottom
line. While the peace of mind that comes with workers’ compensation
is intangible, a strong Pharmacy Benefits Management solution as a
component of the program can also bring tangible and measurable
savings.”
Though a PBM program is seldom understood or fully leveraged to
help manage the rising pharmacy costs of workers’ compensation, the
white paper argues that an effective program can ensure appropriate
spending on pharmacy and quality of care–especially given the
staggering data regarding pharmacy costs in workers’
compensation:
- Pharmacy costs for prescription
medications account for 12 to 16% of an employer’s total cost of
workers’ compensation insurance, according to PMSI, a full-service
provider of pharmacy services devoted exclusively to workers’
compensation.
- The average wholesale price of
prescription medications increased more than 6% from 2007 to 2008,
according to a 2009 workers’ compensation pharmacy report prepared
by PMSI.
- Costs associated with
prescription medications and medical products and supplies make up
more than 50% of total medical spend of workers’ compensation
claims, particularly as claims age, according to data from the
National Council on Compensation Insurance (NCCI).
The white paper details eight ways a PBM program can help
control workers’ compensation healthcare costs:
- Discounted Rates on
Prescriptions. Through established direct contracts with
national retail pharmacies, PBM programs can negotiate
significantly discounted rates on prescriptions for injured
workers.
- Maximizing Network
Penetration. A pharmacy network is a group of retail pharmacies
that provides discounted rates on prescriptions negotiated by your
PBM. Effective PBMs employ strategies to maximize network
penetration.
- Generic Conversion.
Generic transactions represent approximately 65% of prescriptions,
and with generic cost differentials of 20 to 40% lower than brands,
substantial savings opportunities exist.
- Appropriate Use of Mail
Service. Mail-order pharmacy for workers’ compensation has
proven to achieve an industry benchmark of 8 to 12% cost savings
over traditional retail environments, and advanced mail-order
programs can achieve a 20 to 25% cost savings.
- Customizable Formularies.
An established formulary will be well-researched and therefore,
able to help control and monitor prescription utilization, duration
and cost, and should be customizable to clients’ specific
needs.
- Effective Utilization
Management. An effective PBM should have online, real-time
tools for utilization management. An interactive reporting platform
can retrieve and analyze program trends, as well as critical
claims, enabling claims adjusters to make more informed decisions
instantly.
- Innovative Clinical
Management. The PBM should have clinical reviews and system
alerts to help ensure immediate communication takes place when
potential emergencies or treatment complications occur.
- Insightful Data and
Reporting. With flexible web portal reporting providing
dashboards, scorecards and graphs, PBMs now offer greater insight
into program performance.
The full paper, part of an educational series by PMA Companies
called PMA Insights, can be viewed at www.pmagroup.com.
About the PMA Companies
The PMA Companies, www.pmacompanies.com, provides risk
management solutions and services, including workers’ compensation
and other property & casualty insurance throughout the United
States. Headquartered in Blue Bell, PA, the PMA Companies are the
operating companies of PMA Capital Corporation (NASDAQ: PMACA), a
holding company, that includes the PMA Insurance Group,
specializing in workers’ compensation and other commercial property
& casualty insurance products; PMA Management Corp. and PMA
Management Corp. of New England, providing results-driven risk
management services and Midlands Management Corporation, a managing
general agent with a specialty in excess workers’ compensation,
program administration and fee-based TPA services.
Pma Capital Corp. (MM) (NASDAQ:PMACA)
Historical Stock Chart
From Jul 2024 to Aug 2024
Pma Capital Corp. (MM) (NASDAQ:PMACA)
Historical Stock Chart
From Aug 2023 to Aug 2024