In this episode, ADJUSTED welcomes Joe Paduda. Joe shares his insights on the benefits of using a pharmacy benefit manager and their place within the workers compensation industry.
Season 3 is brought to you by Berkley Industrial Comp. This episode is hosted by Greg Hamlin and guest co-host Matt Yehling, Directory of Claims at Midwest Employers Casualty.
Visit the Berkley Industrial Comp blog for more!
Got questions? Send them to marketing@berkindcomp.com
For music inquiries, contact Cameron Runyan at camrunyan9@gmail.com
In this episode, ADJUSTED welcomes Joe Paduda. Joe shares his insights on the benefits of using a pharmacy benefit manager and their place within the workers compensation industry.
Season 3 is brought to you by Berkley Industrial Comp. This episode is hosted by Greg Hamlin and guest co-host Matt Yehling, Directory of Claims at Midwest Employers Casualty.
Visit the Berkley Industrial Comp blog for more!
Got questions? Send them to marketing@berkindcomp.com
For music inquiries, contact Cameron Runyan at camrunyan9@gmail.com
Welcome, everyone to Adjusted season three. I'm your host, Greg Hamlin coming at you from Berkeley industrial comp in Sweet Home, Alabama. And with me today is my co-host, Matt Yehling. Matt, you want to introduce yourself for those who haven't met you?
Matthew Yehling:Hello, everyone. This is Matthew Yehling. Coming from St. Louis, Missouri along the banks of the Big Muddy. So welcome and Happy New Year, everyone 2020 to kick it off. So, hello.
Greg Hamlin:We're glad to have you, Matt. And with us today is special guest Joe Paduda , president of Comp Pharma. And I believe he probably has several other titles. So Joe, I will let you introduce yourself. For those who don't know, you.
Joe Paduda:Well, thanks so much for having me on today. This is a great way to start off the new year after hopefully what was done for everybody a very safe and and great opportunity to get together with friends and family. I really enjoyed doing these podcasts. And I'm honored that you asked me to participate. So looking forward to it
Greg Hamlin:Excellent. Well, Joe, I followed your managed care matters blog for a number of years. I know Matt has to and always a great insight. So if folks haven't checked that out, I encourage you to do that. It's nice to kind of get a window in on some of the things that are going on. The the million dollar question I always like to start with is so Joe, when you were kid growing up, I'm sure you thought you were going to be knee deep in pharmacy benefit manager systems, right?
Joe Paduda:Actually, that was going to be my second career after a second baseman for the Washington Senators which just shows how old I am. Fortunately, the senators didn't exist because I don't have any arm and I can't hit and my fielding is bad too. So actually, that would have been perfect for the Senator. So maybe I should have reconsidered. What actually happened is I after grad school, I started out my career as a HMO data analyst way back in the mid 1980s, and ended up working for a subsidiary of AIG. And I won't go through the whole litany of my checkered past but ended up working for a number of different insurance companies on the group health side product development, managed care, things like that data analytics, ended up part of the traveler's health company doing product management, product development. And then the travelers got rid of the group health operation and sort of the Division I was with was spun off ended up being part of UnitedHealthcare. And that became Metro Comp, which was a specifically a worker's compensation medical management company. And I ended up running sales and marketing and something else for what was a pretty small part of a huge, gigantic mega company. So I worked for United Healthcare for a little while. And after a little while, I figured out if this is the best managed care company in the country, I better go find something else to do. So I went off and independent and started out doing some HMO consulting with a colleague of mine who was sort of my mentor, and really more and more guide into the Workers Compensation side about 20 years ago, I got pulled into trying to assess what was going on with pharmacy because pharmacy spend was going up, you know, 15-18- 20%, a year 20 years ago, and people said, we help the house is burning down. So did quite a bit of work, trying to figure out what the issues were, et cetera, ended up founding a company, which was a consulting organization, and an advocacy organization for pharmacy benefit managers Comp Pharma. Subsequent to that, the industry really consolidated got down to really three or really three significant entities so far, but we switched our focus to really work on on behalf of payers working on behalf of employers and TPAs, to make sure that they're getting what they need from their pharmacy benefit management firm. So that's sort of how I ended up here. I am not a clinician, I'm not a pharmacist, I'm a business guy with a background in business. And so any clinical stuff, I refer to the people who have more initials after their name, and I do
Greg Hamlin:I do that a lot myself, actually.
Matthew Yehling:You mentioned, obviously pharmacy benefit manager, and we lovingly and workers comp, everything's abbreviated, right? So it's PBM. So can you give us a very high level, you know, picture of what a PBM does, and what's the significance and what's the importance of the PBM for the listeners?
Joe Paduda:Sure, happy to do that. And I talk in acronyms all the time. So thanks for sort of pulling back on the reigns there in workers comp and I'll talk specifically about workers comp pharmacy benefit manager is a is a company or entity that really administers the drug benefit program for a payer whether it's a TPA, large self insured, employer, government, entity, insurance company, etc. Most cases PBM is responsible for contracting with a retail pharmacy network contracting with a mail order facility if they don't have ones themselves, responsible for clinical management, which is a very broad category everything from formularies to assisting with prior authorizations to dealing with alerts, etc. They're also responsible in a lot of cases for compliance and state reporting, then of course, it's just script processing. It's just the administration of handling the scripts going through the process with a retail pharmacy, what they also do is pay prescription drug claims, and then rebate management rebate administration, which is something that really doesn't occur very often in the workers comp space, which should, but they're responsible for all that. So essentially, unlike things like whether it's durable medical equipment, or surgery, or hospitals, or whatever, pharmacy is the only part of the Workers Compensation medical spend, that is generally the vast majority of that's outsourced to a third party that does everything from administering it, building the network, paying it, and then making sure that that state compliance occurs. So it's kind of a weird little business.
Greg Hamlin:Yeah, I remember when I started in claims, almost 20 years ago now that that the pharmacy piece was probably the most confusing. And in the beginning, you know, you're so focused on what is the surgery appropriate and is the treatment appropriate, and then okay, okay, whatever the doctors medications are, let's get those paid. And so trying to understand that piece, and especially as we start to look at claims that are older, or legacy claims have been around a long time, sometimes the pharmacy can be a really big driver. And it can be really hard from an adjuster standpoint, and probably even a claims leadership standpoint, to know what the actual price should be, and what what we should be paying and what is related. So I was hoping Joe, you could explain how the pharmacy benefit manager helps with that. And what its role is in kind of weeding that all out.
Joe Paduda:I appreciate you ask asking the right question, way back in the day, pharmacy benefit managers PBMs, were just about getting a reduction in terms of the price. And that was it. It was like, Okay, we got to stop the bleeding. So let's cut the price. And then it's like, okay, we're spending way too much on this type of drug figure that out, we're spending way too much on this, let's figure that out. Okay, let's try to shift people from this type of medication to that type of medication more and more clinical. But I guess what you're asking is what helps make a PBM successful in terms of dealing with a particular client. And what I would say is that the PBM industry had a one size fits all solution for a long time, you know, let's just get the price down, let's manage the clinical, everybody's going to want the same thing. And the reality is, the payers needs have evolved, and different payers are looking for different things. So now in order to be successful, a PBM really has to understand deeply what the payers needs are. So for example, if it is a payer, like Midwest deals primarily with large scale catastrophic claims, there's a lot of pharmaceutical needs, they're probably taking multiple different types of drugs, different health conditions, there's a lot more focus on the specific issues associated with a particular claimant. And in terms of managing how the drugs interact with the rest of the treatment, that's a much more hands on sort of clinical approach and the focus for Midwest employers, and then that don't need to put words in your mouth here, Matt is really what do we do, that's going to lead to the best possible long term outcome for a very significant extremely expensive client, then you look at some but that edit payer that say, is a insurance company that deals primarily with, you know, retail, and hospitality, vast majority of claims from medical onlys, very few lost time claims, what they're going to be worried about primarily is, how do we get on the drug card? So they get their drugs quick? And then how do I make sure that I get the cheapest price possible, because we're not going to have a lot of catastrophic claims. So they just want something that's going to be administered effectively. So there's two very different needs there. And I'm thinking that is not going to want what the retail insurance company wants by a longshot. I can see him given them the Heisman right now. The retail insurance company is not going to want the level of service that thst needs, because it's going to cost them a lot of money. So those are two examples. But really, I think what PBMs should be tasked with doing is understanding what the strategic goal of the organization is, and then figuring out how they can assist with that, because the pharmacy issues are really wrapped up in claim duration, they're really wrapped up in long term spent, you know, for claims over more than eight years old half of your medical spend just for drugs. For claims that are on opioids, and more, we're gonna get to this later, but more and more claims are on opioids, that's really going to be prolonged disability duration. But for an insurer that does a lot of retail work and doesn't have a lot of legacy claims. They really don't care about that. So it's important to understand where you're coming from strategically, and don't just go for oh, this is cheaper. I'm gonna buy that, no. You got to understand how they match with what you need.
Matthew Yehling:I mean, Joe, Joe just outlined a really good summarization of the claims that I deal with and that my company deals with, like, we don't care I shouldn't say we don't care frequency and claims, we're getting that card in the first 24 hours or getting that first fill thing. That's not a, that's not a service that we need, you know, we don't see those claims, unless they're truly catastrophic. But at that point, they're in the hospital, and they're getting whatever medication and we don't see those claims, you know, for years. So, for our organization, exactly like Joe just outlined, you know, those are not needs that we have, you know, it's the larger claims, and in generally speaking, you know, we're not going to UR and trying to say, they shouldn't be taking this, you know, they've been taking most of these medications for years, so that horses left the barn a long time ago for the claims that we're looking at. So I appreciate that understanding and, and observations. I do deal with, like, I mean, Greg mentioned that already, I think, average wholesale price versus drug price. There's different metrics in different organizations, can you can you kind of maybe talk about that a little more and the differences and how different what you see with different PBMs? And how they price things? And, you know, is that, you know, purposeful is that to kind of hide it from from carriers, or I'm not trying to put too much on the spot here, but maybe talk about, you know, how that impacts the industry in what you see.
Joe Paduda:Wow, so I'm just so glad we have set aside eight hours for this podcast app for that discussion. Rather than boring your your listeners with that I can hear the clicks already. The issue is that pharmaceutical pricing is just incredibly Byzantine. I don't fully understand it. And I've been in this business for 20 years, even folks who were to do this on a daily basis, how do you define a generic? Because you get a price for a generic and you get a try price for a brand? Okay, you think you're gonna get, you know, a to b p minus 12? For the brand a to b minus p 65? For the generic Okay, that's what you're gonna pay? Well, now, how does the PBM define a brand drug? Oh, what do you mean? Well, the brand is a brand? Well, not necessarily, because the definitions vary in terms of PBM, etc. To strip through all of that stuff to never to get away from AWP, which is also known as a Plus page, because a TBP is not what's paid. The metric that I really encourage my clients to use is, what is your drugs spend per lost time claim? I don't care about the price. I don't care about the discount. I don't care about any of that stuff. What I care about is what is your drug spend per lost time claim per year? So you pick a date, June 30, how many last time claims you have 100? What's your drug spent? $100. Okay, your drugs spend is $1 per client. It's as simple as that. And if you can't boil it down to something as simple as that you're probably being what's the correct word for a family podcast? Somebody is probably fibbing to you. So my suggestion would be to if you're looking at, say a potential PBM. You say, Okay, here's what our drug span was before, what would it have been under you just tell me what the price per last time claim would have been. And then the same thing something else and then drill into what they're coming up with? Now, all that said, most pricing is based upon some sort of a DWP level. So if you're going to get into that, make very sure that you understand if that is for that specific drug NDC their National Drug Code for that specific drug on that day at that pharmacy? If so, how do they back that up? What data do they use? How often do they update their data? And I can see we're going down a rabbit hole here. So I'll back out of this before I get buried. Just make sure that you're very clear about what the definitions are. And ideally, you're going to have someone who's really familiar with the pharmacy world walk you through that, because the devil is absolutely in the details.
Greg Hamlin:That's excellent point. You know, one of the things I think that was confusing to me when I first stepped into leadership roles, and I'd see these reports is they'd had these huge savings based off of a DWP, you know, and then I started realizing, well, nobody's paying that number. So you know, what are my real savings in? What am I actually paying for? And I think you hit on some good points of just even trying to drill it down to a cost per claim, you know, helps least normalize that a little bit and get an idea of where am I at? And where do I need to get to? Because it's so fuzzy. You know, I think the same thing that while we're not talking about hospital bills, you see the same thing with that unless you don't have any insurance, and even then you could probably negotiate it down below whatever that price is, if you call them these numbers are so huge, that it's hard to really know what's real in all of that. So maybe taking a step forward. One of the things that I'm curious on and I think you've talked a little bit about about this, but what do the best pharmacy benefit managers do that impact claim outcomes?
Joe Paduda:Great question. And I would say again, it depends on on what outcomes that particular payer is looking for, but I'll just sort of generically state that you want to get people back to work as quickly as possible. And you want to have claim duration as short as possible. And ultimate claim costs as low as possible. Those are probably reasonable proxies for what what folks are looking. So the first thing that a PBM needs to do is they need to listen. Too many times people come in, and they tell you how wonderful they are. And you don't give a rat's rear end about how wonderful they are, you want to know that they're going to fix your problem. So the first thing that PBMs are going to do to be impact claim outcomes, is find out what claim outcomes you want to impact. Can't emphasize that enough, somebody comes in there, and it's sort of show up and throw up, throw them out the window. The second is that successful PBMs really invest a lot in analytics. And from an analytic perspective, what they want to do is they want to say, Okay, this is what you told me, your your goals are, you need to reduce your claim inventory by x, you want to reduce your average claim spend by y. And you've got this, this bucket of outlier claims that you've gone through three or four times and you think you've done everything you need to do, but we want you to take a look at this to see if there's anything else you can add to this, okay, fine, then what they that PBM should do is from a clinical analytic perspective, just assess those different buckets of claims, look at your spend, and really understand what's happening from a pharmaceutical management perspective. And that's on the front end. And then what they really need to do is, from a systemic process, you put a plan in place from a clinical management perspective. And, you know, there's a formulary that is set up that these drugs are don't require prior authorization these drugs do in these type of circumstances, you also want them to make you want to make sure that they know what you want your adjusters and nurse case managers to do and what you want the PBM to do. I would strongly encourage most payers to delegate as much Pharmaceutical Management as possible to your PBM. Quite frankly, some adjusters think that they're also pharmacists. But that is not the case. We have, I think, zero exceptions around the country. So I would delegate as much of that as possible. So from an analytics perspective, you know, again, on the front end, understand what the problems are, that you're trying to address, then, from a systemic perspective, put together a set of reports that managers can look at and say, Okay, how am I doing against my target goals in these specific buckets, he said, so you can you can measure something, then what you also want to do is be able to identify emerging issues, I'm in the process of doing a very large audit of a huge worker's compensation pharmacy program, and they didn't identify compounds were an issue until well into the last decade, when everybody else's hair has already been on fire for years over that will clearly happen as they failed to identify an emerging issue there that ended up costing them hundreds of millions of dollars. So you got to have an emerging issue sort of alert, something sent, the flare goes up. And then you also have to have a specific alert about potentially problematic issues. One of the things we're going to talk about a bit later is this Duexis, which is this drug that is simply putting together to drugs, you can mostly get over the counter branding it and selling it for a couple of 100 bucks, which is nonsense, that that should cost like $4. So what we've seen, and this is an issue that we've encountered out in California, there's a new drug called feneprofen, not new, but it's been utilized a lot that all of a sudden exploded in California. And what happened was a few doctors offices, were prescribing this stuff, and they were making a lot of money on it. So if you don't have that ability to sort of identify spikes as they come up, figure out what's going on, and quickly slam the door down on those. Those are problems. So those are from an analytic perspective, it makes a ton of sense to go about it that way. And to have reports that you can do fine, I just say two other things. One is that the clinical resources need to match your clinical needs. And obviously, the needs that Midwest employers has is different than the needs for an insurance company that doesn't do a lot, you got to make sure that those clinical resources are allocated to you and are appropriate. And by the way, they're going to cost money pharmacists are 150 grand a year ballpark. And then you also need to have the PBM take work off of your adjusters and case managers desk and put it on there. There's more and more strain on the adjusting and Case Manager workforce. And a lot of that strain is caused by these back and forth discussions that seem to go nowhere and don't resolve anything by delegating that responsibility after a clearer understanding of what the PBM can and cannot do by delegating it to them. That makes sense. Alternatively, if you don't want to do that, then what the PBM needs to do is to give your staff actionable information with the backup you need, so that the PBM comes back and says I don't think they should be taken to waxes for the following reasons. You can get the following thing instead. So our recommendation is to deny this script and instant tell him to do this. Okay, that's actionable. Just get it okay. This is nonsense, I understand that, that process it through. So they need to adapt what they do around how your business works.
Greg Hamlin:I think that's fantastic. I think the thing that stood out to me the most, and I think this is probably a lesson we could take to all parts of our life is to listen first and figure out what the needs are right? Instead of assuming we have all the answers. And I think we're all I know, I'm that way, it's easy to jump to conclusions and assume you'd have the solution for everything without having listened to find out what the needs are. And what a great what a great insight.
Matthew Yehling:34 years of marriage, I've learned a lot.
Greg Hamlin:I'm at 18, you got me beat by a number of them. And I would agree.
Matthew Yehling:Yeah, I'm still learning that listen, first thing. But, Joe, I read your most recent blog. And you did, I think it was your most recent one, there was the review of your predictions for 2021. And you gave yourself a three and then a one that you missed. And then a one that's to be determined, I think, right? So you gave yourself a 3-1-1 Maybe. And I think the one you missed is in your specialty. So even kind of ribbed yourself a little bit on that. And so I'm gonna expand on that, that miss a little bit. So, you know, what other trends are you seeing in the work comp industry? When it comes to pharmacy? You know, you mentioned the Duexis. And stuff out in California, you mentioned compound medications, you know, what other trends that you are seeing maybe for your 2022 predictions, you know, what do you see in the pharmacy area?
Joe Paduda:So that's a great question. And I put one out, you just went up that half an hour ago, so and I gave myself but smack in the head with a two by four for not predicting the opioid thing correctly. So we're all burned out from dealing with opioids, we are exhausted from it as a nation, as individuals, it's just overwhelming. So the reality is that the workers No, and I am right there with you. I've been on the National compensation world was really overmatched by the opioid manufacturing and distribution industry by the producers and Opioid Conference in Atlanta and probably four different times the TVs and the J and j's and all those people. And got one point about over a third of drugs, Ben was for opioids, which is just just unbelievably bad. Workers Comp. Industry then and had an uncle who struggled with it after a surgery and got said, Oh, my goodness, we got to fix this thing, and really has done an admirable job better than the group health world himself in some trouble because of that and lost a cousin. And I better than Medicare, Medicaid in terms of reducing inappropriate use of opioids. And I give the industry a world of credit on that, unfortunately, I think they've think everybody does, has seen that. I think what what I've missed out on the biggest issue, which is what do you do about long term chronic opioid usage? A few payers have done, I think, seen and I'm still struggling with the answers myself is so a pretty remarkable job. Most payers have not. And I think the issue is that, from an opioid management perspective, dealing what's the alternative? And you know, we're looking at some with individuals who've been on chronic opioid use for chronic opioid users and havr brrn for years and years, it's other things, we're trying some cognitive behavioral therapy, unbelievably hard to get them off. That does not mean we should not try. We should not keep trying. And you should not do everything we can to do that. It's just we've sort of, I we're trying coaching and I think that's where the industry think, as an industry said, we've done everything we could do these things are really hard. We're still making a lot of maybe has some work to do is so if we don't do this, what is the money and workers comp. Oh, well, let's just move on. Well, no, that's not what we should be doing. So I think, going forward, my hope. And it's just a hope is that the industry will alternative and I don't know that as a team, I think we see refocus its resources on really figuring out how to deal with chronic long term opioid users, recognizing that for some pockets of people experimenting with that, but I don't know that percentage of those users, they're going to be on opioids, it's the best thing for them and works really well. That's great, we found the alternative and and obviously, an easy fix is always you know, properly used for people who can deal with it. Well, opioids can be wonderful. That's not a lot of people. So I would just keep coming back to the opioid thing, because I what people would rather do than hard work. You know, I know think that's got the biggest impact on on patient health, on employers, on taxpayers on insurance companies. And I'm so those same things. You know, personally, I you know, I've tired of talking about opioids. always had issues on and off with anxiety and it's hard work. So you know, I can Take a pill work, I can practice meditation, I can look at, well, what are the triggers and remove them from my life? And all of those steps, you know, am I doing? Am I exercising? Right? There's these things I can do. But those all take a lot of work for me personally. So I guess my question maybe as a follow up question is, what are your thoughts on like, what replaces opioids? Because there's will be a void, and there has to be some solution for people who are struggling with pain? You know, that's a great question. I struggle with anxiety and panic attacks as well for like, the last 25 years. And so the answer is what works for you for that probably doesn't work for me, I just can't meditate. I mean, I can do my deep breathing stuff, I can do my exercise I can, I can get out in nature, and those things seem to help me but you have those things. But it's specific to me. So the point I'm trying to make there is that the real challenge is that there is no silver bullet, there is no pill you can take that will fix that. So what has to happen is you've got to look at these individuals, you have to have individual conversations or structured conversations you can have with them around, you know, what are the drivers? What are the triggers? What do you what's, what are the mental behavioral health issues? Where are you coming from on this, to really understand where that patient is. And that's going to take a clinically trained person, you know, half an hour, 45 minutes, and then come back with a report. And the report could say, this person really is afraid of the pain and is afraid if they take away the opioids the pain is going to get worse. You know, all of us have had some significant pain in our lives. And the last thing we want is for any of our loved ones, that to come back for us as well. Okay, so that's a fear issue. Okay, great, that is separate from an addiction or dependency issue that is separate from somebody who was maybe not even taking them but turning around and selling them, but because you haven't drug tested, you don't know. So the template I would follow is, number one, make sure you're doing urine drug testing in all these people, and don't just allow the physician who's the prescriber to say, Oh, well, I know that they're not doing that, because physicians are extremely naive when it comes to that type of behavior, what you find out is about 18 to 20% of people prescribe opioids there's no evidence after taking into their in their urine. So you can refer that to whatever department you have to deal with that. A very small percentage of those people are called fast metabolizers, which means they just process that stuff through so quickly that they may well be taking it but most of those people are likely selling them or doing something else. So then you have 80% of the people. So then you do that that assessment, and then you figure out okay, this person needs a different type of medication, this person is going to as maybe we experiment with medication assisted therapy, which could be Vivitrol. It could be Methadone, it could be Buprenorphine. So then, problem there is a lot of states don't have medication assisted therapy facilities don't have readily available. The good news about workers comp patients is you'll pay to help them go to a facility on an outpatient basis and get that treatment and make that happen. Other people it may be exercise, it may be physical therapy, it may even be surgery. In some cases, it may be work hardening, it may be yoga, it may be meditation. So working through okay, we're going to try this. Okay, that didn't work. Okay, what does that mean? Well, it means we made progress, because we figured out that this didn't work. Okay, we're on to the next thing. Let's try this. That didn't work. Okay, we made progress. Now, let's try something else. There's going to be a core of people, as I mentioned, who just do well on opioids, and they say, look, I can function, I can be a grandfather or teacher or whatever, on opioids, and I can continue to work, that's great. Go to it, we'll just monitor you and be careful. But it's worth spending the time and energy to go through sort of a structured process, to understand what works and what doesn't, and to have the ability which fortunately payers do to say, you know, what, we aren't going to worry about quote unquote, buying the psych because reality is we already own the psych because we've been paying for opioids for however many decades, we need to help this patient get better. And if that means that we need to get them the service dog, then we're gonna get him a service dog. That's just what's going to be helpful. And the good news is, you know, with medical directors, like you folks have, that's, that's on the table.
Matthew Yehling:You could see me right now, I'm like a bobble head nodding up and down, up and down, like everything you're saying, I think we as an industry need to change our approach, you know, we get into that box of, we do this when this happens, and we respond to this when that happens. And versus, you know, thinking alternatively of, you know, maybe it is, you know, acupuncture, maybe it is sending them to your chiropractor, maybe it is, you know, some kind of alternative treatment or program that, you know, we would, you know, historically if it said no, that's, you know, we're not going to start that we're not going to go down that road. So I agree with everything that you just outlined, Joe, maybe maybe an easier topic to tackle. So I'm gonna change gears on here is this addition, dispensing can be a costly endeavor for for carriers for self insured entities. So, you know, how do we watch out for that? And, and obviously, there's, there's well intended good benefits of physician dispensing and then there's, you know, maybe my less favorable, more costly times when we see physician dispensing and maybe it's more what I would interpret as being abused. So, what do you see in physician dispensing? And how do we watch out for that, as an industry?
Joe Paduda:Well, you're a lot nicer about them than I am Matt. I think the vast majority like 95% of physician dispensing is just shameless profiteering off of employers and taxpayers. And I may be a little callous about this. I got sued by a physician dispenser in federal court for calling them a repackaging company and it cost me about$25,000 in legal fees that eventually got got thrown out physician dispensing the research that's been done by work comp Research Institute in California, where competence to NCCI everybody, there's no benefit to it. So what physician dispensers will say is, well, this is how we make sure they're getting the drugs they need. Okay, and across the street to CVS. And right next to them is a Walgreens and on the other block is a Rite Aid and over those a Walmart any yeah there's a Target over the shopping center that's also got the so access to drugs is not a problem. So that's just nonsense, then it's, well, it's just more convenient for the injured worker. Again, there's like five pharmacies within a stone's throw. So that's not an issue. What you actually find is that the research that's been done shows that drug costs and medical costs for claims that were their drugs have been dispensed by physicians are significantly higher, and duration is longer than for, for scripts that are dispensed by retail pharmacy. So there is no benefit whatsoever that has been documented to physician dispensing. So the way to watch for those is they're either going to come in through a, a billing entity, Bill aggregator for a it's going to come from that physician on a HCA, electronic, HCA whatever. And it may come in on the same bill as a primary care bill, there's also a bill for duexis, or what have you, what I would strongly encourage payers to do is split those scripts off, send them all to your PBM for a couple of reasons. One is clinical management. If this patient is getting, say Duexis, or is getting some sort of medication, that's Acetaminophen and and an opioid, what have you, then you want to make sure that that that information is centralized so that you can, you can be very sure that the patients getting the right kind of treatment for that particular diagnosis. And for that patients conditions, the PBM can also reach out, contact that individual and say, Hey, we're gonna send you a drug card, we need you to go to this entity. And then the PBM can also talk to that physician and say, you know, there's some issues here related to x, y, z, it's their responsibility, make them handle that for you. Physician dispensing is especially problematic in states like Maryland, Florida, California, to a lesser extent, ultimately, what I would suggest is that payers talk to their PPO networks, and strongly encourage those PPO networks to put in place contract language that prohibits physician dispensing, and enforce that and do not refer any patients to people to physicians who dispense now, that is not a panacea, you're not going to solve that in the panhandle of Florida, there's a limited number of doctors and some of them are just going to dispense. So it's not going to fix the whole problem. But I think physician dispensing drives up claim costs, and is absolutely the wrong approach to take.
Greg Hamlin:Really glad that you're tackling that because it's been a thorn in my side, you know, part of my career I spent in some covering claims and very rural parts of the country in Appalachia and there just weren't options. And we would see this doctor prescribe the same four medications to every single patient. Yeah, physician dispensing out of his office. Of course, it's like three, four times as expensive. And it was like a one size fits all, you could almost count on it. If they ended up there. They were gonna get these three medications ever nurses look at it very frustrated.
Matthew Yehling:I feel your pain. The other times I The other thing I see a physician sometimes doing and he touched on it a little bit earlier when you said urine drug screens. So I kind of cringed a little bit on that one because sometimes I've seen a trend where physicians will be associated with the UDS company and all sudden their urine drug screen is much more costly than a similar urine drug screen from another company. So how do we avoid that kind of thing? I mean, this is a little off the PBM topic, but I think it kind of overlaps with the PBMs and physician dispensing so I wanted to kind of follow up on that like, what would you recommend for something that Just when you're seeing that, that kind of happening when it's like the same urine drug screen being done at physician's office, it's costing 1500 bucks, versus this one over here that's costing, you know, just a few 100 bucks. And that's something I see as an excess carrier. And it's probably a little isolated to some, but it's connected to the opioid claims the long term opioid claims. So it's like, yeah, I agree they should be doing that UDS urine drug screen, but it also, do I want to pay every month for every three months for another 1500 version, when I know, there's the 300 version over here. So.
Greg Hamlin:Well, Matt, and the worst offenders I've seen with that do it every single month. So it's no longer a random test, which what's the point of that? Right? Like, if I know every time I'm going to go to the doctor's office, I'm going to be tested there or what, you know, what, say there's ways around it. But there's ways around that. And when it's truly random, and you don't know that, then it works. But if it's happening every month, of course, you can get billed 12 months out of the year. So
Joe Paduda:I'm totally on board with with both of you, gentlemen. So a couple things. One is that urine drug screens, there are specific protocols for them, and a matrix a risk matrix. So out of state of Washington, sort of the leading entity that in the whole opioid crisis within workers compensation and Gary Franklin, who's a medical director for Washington, Ellen, I, really, he and a team of folks put together a really good protocol for timing, and for assessing patients relative to urine drug screening and timing when you're when you're going to do them. Just because a doctor does something, you know, bills it, I would suggest doesn't mean that you need to pay for it. It's extraneous, if you should urine drug screen, generally speaking for a high risk patient no more than four times a year, absolutely no more than four times and that is a high risk patient. High risk defined as somebody who may have had a history of use of this drug before, someone who may have been taking opioids prior to that injury, tobacco smoking, tobacco use is a very, that strongly correlates with with risk for abuse. So no more than four times you can sort of set that as a as a standard. The other is that for patients are relatively low risk one or two times a year is probably plenty. And putting that in place from a from a clinical protocol perspective for your nurses and adjusters for your bill review entity. You know, if you want to do, you can put in place a prior authorization requirement that before you can do a drug test, you need to do that. Now, with that said, I will say that there's a qualitative type of drug test, which is the dipstick type of thing. And then there's a quantitative, which is using liquid chromatography, mass spectrometry type of testing, which is much more sophisticated. I'm not a big fan of the dipstick type thing, a because to your point, it costs like about 20 bucks for the doctor to get that and they can bill $300 for it. And therefore there's sort of this incentive. And also they're notoriously inaccurate. So they're just not, if you're going to test somebody use the right test. On the other hand, you can get a quantitative lab test for ballpark 300 bucks. And if they're charging more than that, then that's an inappropriate, inappropriate cost. And there are entities you can contract with on a national basis, you can provide that type of service. So with it's like, there are a relatively few fortunately that physicians, physician practices, chiros, whatever, we're out to suck every possible nickel out of your wallet and your employers and taxpayers wallet, and you got to find those people. Ultimately, my suggestion would be is be the biggest pain in the neck they've ever possibly encountered. So anytime someone from one of the Berkley companies, a patient shows up at their office, they say get out of my office. That's exactly the outcome you want. So that would be my suggestion, just at the end of it just be difficult.
Greg Hamlin:Great insights there. We talk a little bit about this, but there may be some people who don't understand what compound medications are. And I thought it might be good for you just to explain what they are and what what folks watch out for when they see those. And, you know, they're not every day, but when they hit they're very expensive.
Joe Paduda:Sure. So great question. Fortunately, compounds have been dealt with by many state legislatures. And so the costs are nowhere near what they what they used to be. So that's a good thing. For really, more information than you could ever possibly want go to comp pharma.com, CL Np p h, ar ma.com and resources. We did a couple of very detailed studies of compounds to explain everything you can possibly know about them what the issues may be, when they might be beneficial. They are not FDA regulated, per se. They're typically regulated by states there's been some real significant Can safety issues, there was a compounding pharmacy in Massachusetts that killed a couple of dozen people because of unsanitary drugs, that kind of stuff. So a compound is essentially, you take two different chemicals, and you put them together on a one time usage for a patient who theoretically cannot take an oral medication cannot inject the medication. And because they cannot take an oral and cannot inject, you have to use a compound which you rub on the skin. Now, the number of people who cannot swallow a pill or cannot get an injection is probably relatively insignificant. So if you're seeing a particular compound, if you see a particular physician doing a lot of this, or if you're seeing a physician saying well better to this than opioids, that's just an excuse to suck more money out, why would very strongly advocate that that person stopped doing that? For compounds, I would really suggest you do a couple things. One is put in place a prior authorization requirement, or any at all company, you got to get a prior auth that auth off means that you have to demonstrate that the patient has failed on oral medications or potentially injectables, if that's an appropriate delivery method for that particular medication. And only until that they've demonstrated those, do they get a compound, but then when they do get a compound, you will you will tell them which compounding pharmacy that they will be able to use if you're in a state where you can do that. And again, that just becomes more difficult for the physician. So when a Berkeley insured shows up, they just say get out of my office.
Greg Hamlin:I think those are some good some good insights on that I can remember one that I it took a lot of digging, but I was able to figure out that the compound pharmacy had investment money that was connected to the physician, you know, and as you're starting to see how the interweb connected it was like, Well, wait a minute, I see where this is going and how this is connected. I think that's what's difficult is we want to do what's right for our injured workers. But when there's games being played, and you're right, it's not very many, but those few can cause a lot of problems for everybody.
Joe Paduda:And as long as the physician that has that patient there, they're going to keep prescribing Voltaren gel or whatever other hocus pocus they come up with. So that's going to extend claim duration as well. So one thing you can look at and say, well, it's just a 200, dollar compound, we don't worry about that. Okay, well, yeah. But let's think about what does that do to the total cost of the claim?
Greg Hamlin:Great points.
Matthew Yehling:This is all I mean, excellent information. When When Greg asked me to participate in this one that kind of said, this one's going to kind of be a geek out session, because there's so much information that and I think you've shared so much, I would just say, you know, then I'll pass it over to Greg. But are there any final thoughts when it comes to PBMs or medications that you think are worth sharing? And in the few minutes that we have less left? And I know, Greg has a final question for you too?
Joe Paduda:Sure. I'll just keep it brief. I think way too many payers are focusing on price, you know, what is the price of the pill? You know, give me the cheapest price of the pill. And all that does is distract that can you and the PBM from What problems are we really trying to solve as an organization and the problem that organizations are not trying to solve is how much money they're spending on drugs. Reality is, drug costs and workers compensation have dropped by about a billion and a half dollars over the last 10-15 years. I mean, that is a massive reduction in sped probably of 40%+, total drug spend in workers comp is less than 10% of total medical spend. So it's around $3 billion, we've done a great job at that continuing to hammer on, you know, can I save an additional 3% or 4%? Is the wrong question. The right question is, what's my drug cost per claim? And how are you going to help me solve my strategic issues, whatever those might be. And if they come in and start blathering about this out of the other thing, escort them out. Again, just reiterate, solve the problems you have. And drugs are a big piece of that if they're addressed correctly.
Greg Hamlin:Excellent, excellent thoughts, Joe? Well, I've I've really enjoyed, as Matt said, having you with us today and tackling these topics. for season three, one of the things I wanted to do a little different. I've really just been thinking a lot over the last couple of years about how divisive our world has become. And it feels like the way to come to truth is to have two people scream at each other with different points of view. And whoever yells the loudest, that must be the right person. And so I thought the way I would end each episode this year is just ask whoever we were interviewing to tell me about a time when they were happy. Who were they with? And what were they doing? So that's my question for you, Joe. Shear time when you were happy. Who are you with and what were you doing?
Joe Paduda:So two, two responses. One is we moved here to New Hampshire, because our daughter and her husband had a baby. So we have a granddaughter who I get to babysit one day a week. And Aubrey June is just the most fun bundle of protoplasm I've ever come across. She's just so much fun. She can't really speak yet, which I think is a good thing. I'm not so sure, a lot, but she is just, she just makes my heart happy. But the other thing, and this is not you guys obviously don't want to say this. But there are organizations that really focus on doing the right thing. And one of the things that I have really come to feel really good about is workers compensation pairs that consistently really try to do the right thing for their patients. And Matt and I were talking earlier about medical director Fernando Franco and some of the things he's done. And you know, that is an example of an individual who was, like, totally focused on doing the right thing. And worker's compensation is not exactly the most engaging industry in the world. And you know, some of it is just kind of routine. And when I hear about things like Dr. Franco, going over and above, to help a patient with a spouse who's got some real critical health issues, that just makes me happy. It's like, Yeah, this is good. You know, it gives me faith that you know, there are people out there I think most people that work is kind of over like this. So we're just trying to do the right thing. So appreciate you sharing that with me, Matt. And that definitely makes me happy and should make your folks happy to
Greg Hamlin:Love that Joe. Love that. Joe, the world needs more happiness in general. Well, I appreciate everybody, for joining us today for this new new season. Season three of Adjusted thank Joe for being with us and Matt as well. And just want to wrap up by saying so remember to do right, think differently, and don't forget to care. Thanks, guys. That's it for today.