Commonly formulated for aches and pains, compound medications are really putting a strain on the workman’s compensation insurance industry. Custom-made for patients, these concoctions are increasing pharmaceutical expenditures in the workers’ comp arena nationwide, and are at the center of several high-profile fraud cases.
Feeling the burn
Ambiguous state laws and formulary guidelines are driving the trend of compounds. Taking advantage of loopholes in the system and despite a lack of evidence that such creams actually work, compounding companies are playing the numbers game. Evidence show them submitting multiple bills for large amounts in excess of $5,000, earning excess profits with a single claim approval, and costing the system millions for grossly overpriced products such as Bengay.
Playing the game
Compound drugs previously accounted for just a small percentage of workcomp spending. Prescribed in cases where patients can’t tolerate commercially prescribed medications due to allergy or limitations, they are medically proven and necessary. However with creams for pain and inflammation, minimal absorption levels negate the necessity of these drugs for the prevention of allergic reaction.
Previously a last resort, these compounds are now being exploited as an avenue for compounding pharmacies to make money, rather than as a necessary alternative. State and federal prosecutors are even finger-pointing doctors believed to have received kickbacks in exchange for compound prescriptions. In The Postal Service alone, compounds rose from 8% of prescriptions and 6% of costs in 2011, to 34% of prescriptions and 53% of costs in 2015, costing the Postal Service an average of $390,000 a day in compound drug costs.
Workman's compensation insurance costs compounding on you? Minnesota Comp Advisor has the cure. Contact us today.