workerscompbiz.com

Employers in Ohio get can get charged for drug costs that are questionable at best and fraudulent at worst.

On November 1, 2009, SXC Health Solutions Corporation will begin its 3-year contract with the BWC to manage the drug expenses for claimants. In its press release, the BWC touted the “state-of-the art, Web-based prior authorization technology that will enable prescribers to obtain instant approval to fill many pharmaceutical requests.”

In my years of reviewing the claim documents and bills for drugs expenses in Ohio claims, I have seldom seen any indication that claimants or prescribers have to get prior authorization for drugs. What I have seen are numerous examples of claimants getting drugs for conditions that are clearly not related to their claims paid by the BWC.

My favorite example is the claimant who was diagnosed with a strain to her forearm, returned to work, and two months later began getting anti-seizure medication paid in the claim. The claim was not allowed for seizure, and the physician of record did not prescribe the drug for her injury. When I brought this to the attention of the BWC, its response was to call the claimant, who said that she had taken anti-seizure meds since she was 12 and that the pharmacist had made a mistake. The pharmacist told the BWC that the claimant had instructed him to bill her workers’ compensation claim. In this case, the BWC told both the claimant and the pharmacist to stop billing the BWC for that medication, but then paid for two more months anyway.

Less clear-cut examples include doctors prescribing drugs “off label”, which means that the drug is prescribed for a condition not approved by the FDA. It is seldom possible for the employer to find out what doctor prescribed the drug, so it cannot investigate whether the drug has been prescribed for a condition not allowed in the claim.

Even when it is obvious that certain drugs should not have been paid in the claim, the BWC does not deduct those costs from the total claim costs. The BWC position is that its doctors can only state that a claimant doesn’t need the drug in the future for the allowed condition.

The Bureau of Workers’ compensation (BWC) does not want group rating to be the problem it was most recently. Just before the February 28 deadline for this year’s group rating, the BWC instituted a 31.1% break even factor (BEF). All group experience modifiers (EM) had to be multiplied by 31.1%, which lowered the maximum discount from 77% to 70%, and eliminated groups with discounts less than 30%. Some offers did not mention the BEF, so the employer couldn’t tell if a projected discount had or had not been modified by 31.1%. Groups that did not mention the BEF enrolled some employers because their offers looked better than their competitors’ offers.

This year, the BWC has proposed a stratified BEF, which means that the groups with the largest discounts have BEFs that are greater than the groups with smaller discounts. Once the BEFs are applied, the maximum discount should be about 50%, and the minimum discount should be about 17%. The stratified BEF table has to be approved by the Workers’ Compensation Board before any group sponsors or TPAs (third party administrators) can send out any offers.

The BWC has already instituted rules that require every group rating offer to include the BEF in its formula, and not just mention it in a footnote. The goal is to enable an employer to make an “apples to apples” comparison among all the offers.

As an employer, you should not receive any offers that include a projected discount or projected savings at this time.

As always, you can apply to any group that sends you an authorization. You can also seek out other groups, or have an objective TPA seek out and apply to the best groups for you.