Pharmacy Benefit Management Institute (PBMI) helps industry professionals manage pharmacy benefit programs through research-based drug benefit education.

Nearly $3 billion of the $24.3 billion of U.S. workers' compensation medical claims are for prescription drugs based on 2002 data, according to the National Academy of Social Insurance. As pharmacy prices increase at double-digit rates, managing prescription drug costs for this population is increasingly important. Increasing utilization of appropriate drugs lowers the overall cost of the workers' compensation claims and shortens return-to-work cycles. As a result, the overarching goal of prescription drug programs for this population is to increase utilization of the drug benefit to ensure prescriptions are adjudicated within the workers' compensation benefit system.

The audiences are insurers, third-party administrators, self-insured companies, and employee benefit firms who need to contain pharmacy costs for workers' compensation programs.

Cypress Care's objective is to help provide the effective and necessary drug therapies at the lowest net cost to its customers. To achieve this, Cypress Care developed tools to:

Cypress Care developed SEQUIOIA^TM, a proprietary software program that streamlines the pharmacy management system. The software allows companies to tailor their drug benefit plan design specifically to their needs enabling them to proactively manage, track and monitor injured workers' formularies. This customization eliminates unnecessary direct pharmacy claims, reduces administrative tasks associated with paper claims, and curbs overspending on prescription drugs purchased outside of the drug benefit program.

Worker support is equally important to increase program utilization which reduces costs. Each employee is contacted by Cypress Care and alerted about changes to their prescriptions and instructed on how the program works. Cypress Care also contacts its national network of over 55,000 pharmacies to ensure that the needed drugs are available and the worker does not incur any out-of-pocket expenses. Follow-ups with workers are made regularly. Worker contact with Cypress Care is encouraged.

With the status of pre-existing workers' compensation pharmacy systems, it is necessary to carefully review existing claims and files to create a starting point for tracking that ensures success. Visiting client offices, Cypress Care painstakingly goes through all of this information, identifying employees eligibility for the pharmacy program and to make sure that information is imported into SEQUOIA.

Cypress Care's selection by a national insurance company to handle all of its workers' compensation pharmacy matters was the first big test of the system. Cypress Care's flexible plan design allows for individualized, patient-specific formularies customized down to ICD-9 codes. The plan design includes 60 point-of-sale and additional drug utilization review (DUR) edits. Cypress Care also offers retrospective DUR. Workers' compensation drug claims are most often for drugs prescribed in the following classes: Pain medications and analgesics, muscle relaxants, and anti-depressants.

The integration of eligibility and payment information for the plan sponsor's 30,000 injured workers in 3,500 groups was accomplished in less than 90 days. Cypress Care began handling thousands of phone calls each day, receiving more than 40,000 calls in the first month alone. Cypress Care had less than a 3% error rate for this volume of calls. This below-industry-average is attributed to the combination of the SEQUIOIA^TM software and the one-on-one contact each injured worker receives from a Cypress Care representative who explains coverage and answers inquiries about eligibility.

Cypress Care also implemented its Paper Bill Eliminator^TM Program for this plan sponsor. By outsourcing its paper bill processing to Cypress Care, the plan sponsor started saving $22 per claim and was able to eliminate an internal department formed to manage the paper process. The plan sponsor now forwards the bills to Cypress Care who using its pharmacy network, readjudicates the claims to Cypress Care Pharmacy Program rates and communicates with the injured worker to use the new drug benefit program for future prescriptions.

Injured workers are receiving much better attention and care. Cypress Care is managing workers' compensation pharmacy claims for this carrier with the following results:

• 82% utilization of the prescription drug program, an increase of 42% from the prior year.

• Cypress Care converted 92% of all brand scripts to generic when a generic was available. Cypress Care achieves a ratio of 60% generic and 40% brand drugs dispensed.

• Cypress Care's strict compliance measures cause a rejection of 24% of all drug claims, a 14% increase over the industry average that results in additional savings for plan sponsors.

• In 2004, the plan sponsor has saved $25 million in hard dollar savings in only 9 months. This figure does not include the millions of dollars saved in administrative efficiencies achieved by reducing the number of paper or direct pharmacy claims.

For more information about managing workers' compensation prescription drug costs, contact Richard Bell at richard.bell@cypresscare.com.