FINANCIAL IMPACT OF ALTERNATIVE PRICING BENCHMARKS FOR PHYSICIAN DISPENSED SIMPLE PRESCRIPTION AND ADMINISTERED DRUGS IN CALIFORNIA WORKERS’ COMPENSATION SYSTEM

OBJECTIVES: Determine financial impact and liability of implementing an alternative price benchmark for the reimbursement of physician dispensed drugs (PDD) and physician administered drugs (PAD) drugs in California Workers' Compensation System (CWCS). METHODS: A retrospective large database an...

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Bibliographic Details
Published in:Value in health 2017-05, Vol.20 (5), p.A42
Main Authors: Tran, DM, Lin, T, Huang, W, Wilson, L
Format: Article
Language:English
Subjects:
Adjustment
Alternatives
Averages
Charges
Claims
Compensation
Liability
Physicians
Prescription drugs
Prescriptions
Prices
Reimbursement
Workers
Workers compensation
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Summary:OBJECTIVES: Determine financial impact and liability of implementing an alternative price benchmark for the reimbursement of physician dispensed drugs (PDD) and physician administered drugs (PAD) drugs in California Workers' Compensation System (CWCS). METHODS: A retrospective large database analysis using physician dispensed and administered billing information from CWCS to re-price drug component of claims processed from 2011 to 2013. To price claims under alternative benchmarks, the billed drug was matched to benchmark unit prices and multiplied by the billed quantity to generate an alternative claim payment. Price benchmarks were acquired from both commercially and publicly available sources. Reimbursement methodology implemented by other states' workers' compensation systems were identified and applied to CWCS claims to project the financial impact of adopting a new reimbursement mechanism. RESULTS: To maintain drug spend on PDD claims, implementation of Federal Upper Limit (FUL), National Average Drug Acquisition Cost (NADAC), Wholesale Acquisition Cost (WAC), and Average Wholesale Price (AWP) would require an adjustment factor of 2.66, 1.97, 1.27, and 0.49, respectively. FUL, NADAC, WAC, and AWP provides a price for 78.9%, 86.1%, 80.0%, 99.9% of drugs among PDD claims, respectively. To maintain drug spend on PAD claims, implementation of NADAC, WAC, Direct Price pP), and AWP would require an adjustment factor of 0.92, 0.68, 0.72, and 0.52, respectively. NADAC, WAC, DP, and AWP provides a price for 66.3%, 99.5%, 78.6%, and 89.5% of drugs among PAD claims, respectively. CONCLUSIONS: To ensure CWCS continues to be a prudent payer for drugs, a combination of two reimbursement methods may be the best to maintain costs and patient access for CWCS.
ISSN:1098-3015
1524-4733
DOI:10.1016/j.jval.2017.05.005