Adjudicating automobile no-fault and workers’ compensation claims tends to come with many complexities and even complications. When your claimants need prescription medications, that can add even more complexities within the administrative tasks for your adjusters and examiners. Because of this, partnering with a pharmacy benefit manager (PBM) can offer cost containment assistance along with a reduction in administrative burdens among your claims team members.
Essentially, a PBM partners with insurance companies to coordinate with pharmaceutical companies and pharmacies. Typically, a PBM will communicate among these three parties to negotiate the pricing of prescription medications. Ideally, an experienced PBM will also have developed a broad network of providers and will allow its insurance company partners access to that network for their claimants.
Choosing a PBM with an expansive network is key to a successful partnership. Offering your claimants access to a network of pharmacies with multiple locations in every state means enhanced convenience for claimants requiring a prescription medication. Because the PBM will have negotiated discounted rates for each provider, your company will also pay lower rates for those physician prescribed services.
However, before choosing the best PBM for your insurance company, it is critical to understand a significant difference that exists among various PBMs. The majority of PBMs offer negotiated rates with providers by utilizing a formulary. Put simply, a formulary is a list of medications that can be approved for payment. A smaller number of PBMs employ pre-authorization instead of utilizing a formulary.
The formulary method tends to approve non-injury related medications for claimant use and payment more often, which causes unnecessary costs for your company. If pre-authorization is used by your PBM, non-injury related medications are flagged for review instead of being approved for claimant use.
This situation is perhaps best illustrated using a simple example. Formularies often include common pain relievers like Motrin on the list of approved medications. Under the formulary approach, a claimant’s current prescription for Motrin that stems from a non-injury related incident would be approved for payment by your insurance company. However, if the PBM implements pre-authorization for your claims, that same prescription would be flagged as non-injury related and therefore not approved for payment by your company.
Northwood is a PBM that implements pre-authorization on all work comp and auto no-fault claims. This approach assists with cost containment for Northwood’s partners. However, Northwood’s process has been carefully developed over the last 30 years to maximize claimant convenience while reducing unnecessary costs to your insurance company for things like non-injury related medications.
For a deeper dive into the benefits that Northwood would bring to your insurance company while acting as your PBM, please call Rosanne Brugnoni at 586-755-3830 ext. 3771.
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