The Never-Ending Story — Workers' Comp Pharmacy Spend

By: Dr. Gary Anderberg

May 16, 2023 — I recall a RIMS conference back in 1992 when a group of us workers' comp types was looking over the latest information from a major carrier's claims system* and marveling at how pharmacy costs — formerly a nickel and dime issue — were heading up and up. I had seen this before in group health benefits, but it was new in comp at that time. Comp pharmacy controls basically didn't exist back then. So where are we 31 years later?

Thanks to Joe Paduda, we have a good idea of what's going on in comp pharmacy — and it's pretty positive stuff. Joe just published his eighteenth annual survey on Prescription Drug Management in Workers' Compensation (CP2022PublicSurveyFinal.pdf (comppharma.com)), and it is guaranteed to cheer up the dourest of comp plan managers.

• The recent slide in drug spend has leveled out, but it's not bounding back up. With an increase in 2021 of less than one percent, it's nice and flat.
• The opioid spend continues to go down, although we still have the residual problem of legacy opioid claims. The really good news is that we are not adding to this cohort.
• Payers and PBMs seem to have their acts together, getting the job done.
• One caution — the issue of physician drug dispensing refuses to die. These folks never get the message, so the only course for payers is to know who they are and aggressively direct injured employees away from them.

Progress does happen. Back in 1992, we were scratching our heads, wondering what was happening. Yours truly had been setting up prescription plans for health programs just a couple of years before, so the obvious question became — how do we do that in comp with all the state rules we had to cope with?** Looks like we figured it out.

*On good old fan-fold green bar with tractor strips. Remember that?

**Starting around 1990, we began adapting ideas from group health to control medical costs in comp in a big way. In a handful of years, we built out the services that form the core of contemporary medical cost control. It's hard to believe today how many basic claims adjuster tools simply did not exist a generation ago. Yeah — progress really does happen.