Administering automobile no-fault or workers’ compensation claims is not necessarily a simple, straightforward task. When it comes to claims adjudication, your adjusters and examiners must balance a number of duties and, at times, competing priorities in order to indemnify your claimants. Partnering with a pharmacy benefits manager (PBM) can offer a wealth of benefits for your adjusters, examiners, claimants, and ultimately for your insurance company as a whole.
However, it isn’t always evident what a PBM does or how it may help your company. It can be helpful to take a closer look at PBMs to determine whether partnering with a qualified PBM might be the right option for your insurance company.
To put it simply, a PBM communicates and coordinates with pharmaceutical companies, pharmacies, and insurance companies. This communication often includes many negotiations, especially when it comes to prescription medications. An experienced PBM will also have an extensive network of providers which its insurance company partners are able to access.
This provider network will offer discounted rates according to the contract in place between the PBM and pharmacy or medical providers. A direct benefit of this agreement is that your company will pay lower rates for physician prescribed services. However, you may want to look more closely at the agreements a PBM has in place before deciding which PBM to partner with.
For example, some PBMs utilize a formulary to set rates for physician prescribed services. Essentially, the formulary is a list of approved medications. Other PBMs, such as Northwood, utilize pre-authorization instead of a formulary.
Pre-authorization means that every physician prescribed service is reviewed by the PBM before being approved for your claimants. This provides an extra level of care since the PBM’s review process includes an evaluation of whether the prescription is appropriate for the claimant and his or her injuries. Yet it can also reduce excess costs to your company by preventing a non-injury-related prescription from being approved for your claimant.
As an example, a formulary often includes common pain relievers such as Motrin on the approved medications list. That medication invoice will automatically be approved when a provider invoices your company because it is included in the formulary. If a claimant has pre-existing injuries and has already been taking Motrin, a PBM using a formulary would likely automatically pay for the prescription Motrin, even though it isn’t a medication related to the claimant’s injuries. A PBM with pre-authorization in place, however, would not approve payment for the Motrin as it is not an injury related prescription.
The use of a formula versus a pre-authorization process is just one important area to consider if your company is contemplating a partnership with a PBM. Northwood is an experienced durable medical equipment, prosthetics, orthotics and medical supplies (DMEPOS), pharmacy and ancillary service provider that regularly acts as a PBM for many insurance companies. Please call Rosanne Brugnoni at 586-755-3830 ext. 3771 for a closer look at how a partnership with Northwood will benefit your company.
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