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Some alarming facts about costs of claims

A recently released report by Progressive Medical, Inc, 2010 Drug Spend, reveals changes in medication spending on Workers’ Compensation claims from 2008 to 2009 for Progressive Medical clients, as well as key factors that may influence future expenditures, such as price, utilization and product mix changes.

Key highlights from the 2010 Drug Spend Analysis include:

AWP inflation was 5.2%, which comprises an 8.1% increase for brand products and a .2% increase for generics.
While the number of days supply dispensed per prescription decreased by 1.5%, prescriptions per injured party increased 4.2%.
The net effect of increased use of generics overall from 2008 to 2009 is a 2% reduction of total medication spending.
Fourteen of the top 25 medications show a decrease in spending per injured party from 2008 to 2009.
Narcotic analgesic-acetaminophen combinations currently represent 20% of Workers’ Compensation prescriptions with more than 90% dispensed as generic.


There is significant value to putting strategies into place to monitor claims, including ensuring that all medications dispensed for a claim is appropriate for the injury and compensable.

Earlier studies by National Council on Compensation Insurance (NCCI) found that the longer a claim is open, the higher the prescription costs – while prescription costs on average amount to 3% of the claim during the first year, it climbs to 31% after seven years, with drug spending alone averaging $27,000 annually.

There’s more to be learned from studies related to health care costs. The 2010 health plan trend survey by The Segal Company found that error rates typically range from 2% to 5% of total claims paid.

Another survey by the International Foundation of Employee Benefit Plans in Brookfield, Wis. found how claims are handled plays a vital role in shaping the employee’s view of the quality of the benefits.