Cost-Control Case Study: Miami-Dade Public Schools

"We go out and identify those physicians that we think understand our program and the culture of a public school," Clark says.

A school system is "very labor-intensive," he notes, and if a bus driver or teacher is injured, it's costly to hire a substitute for any length of time. Thus, getting employees back to work fast is always a top priority.

The TPA also negotiates a discount off the State of Florida's fee schedule.

"We have been very successful in keeping our costs aligned; we have really seen a difference," Clark says. "The employees no longer feel like they're getting the Workers' Comp runaround. They feel like they are getting access to the best physicians in South Florida."

FIGHTING THE GOOD FIGHT: TIGHTENING LOOPHOLE NETS $1M

In the past few years, dealing with physicians' expenses for prepackaged pharmaceuticals has become one of the biggest challenges in trying to contain Workers' Comp costs, says Clark.

Normally, the Sunshine State has a "very succinct reimbursement metric" for pharmaceuticals—detailing the cost of medicine, dispensing rate and formula, among other factors, says Clark.

So when he discovered that a loophole in the reimbursement rate for the state's fee schedule was permitting physicians to legally bill prepackaged pharmaceuticals as a medical expense, rather than as a pharmaceutical expense, he took note.

Third-party vendors will supply physicians with prepackaged medications that doctors, in turn, can give away to patients in their care—those who may be of low income or have no transportation to a pharmacy.

But billing these as medical rather than pharmaceutical expenses translated to a markup of some 300 percent to 500 percent per package. And taxpayers, like the Miami-Dade Public School District, were footing the bill.

Not surprisingly, Clark wasn't happy. "It's perfectly legal but certainly questionable from a standard of right and wrong," he says.

With some due diligence from TPA Gallagher Bassett, the district was able to establish a statewide Pharmacy Validation Program, which monitors prepackaged pharmaceuticals to make sure they are being routed through the proper fee schedule. Since November 2010 the program has saved the school district some $1 million in excess Workers' Comp charges.

Gallagher Bassett contacted the physicians with which it had relationships to let them know how these third-party prepackaged vendors were hurting that relationship; the TPA also asked partner physicians to bill the prepackaged prescriptions at the same price they would for other pharmaceuticals.

Many have complied, Clark says. Some physicians have even stopped doing business with those prepackaged vendors because they don't want to be on the wrong side of the Florida public school system, he adds.

"Once we started having an impact on the bottom line of these prepackagers, they hired an attorney and started filing through the Workers' Comp courts, saying it was improper and questioning our reimbursement rate," Clark says. The district has received literally hundreds of court filings.

"So far we have been very successful in defending every one of them," he says. And while it has been "time-engaging" and expensive, it has also been "the right thing to do."

The district and its TPA are pushing for state legislation that would close this loophole and prevent the fee-schedule switch from occurring in the first place. They are currently working on "the right wording and sponsor" for such a bill, Clark adds.