by Timothy A. Raimey, Jr., Esq.

Prescriptions for compound creams have become increasingly popular for pain management treatment in workers’ compensation claims. These medications can be extremely costly, and in some instances, ineffective for their intended use. We recently spoke with Mark Pew, Senior Vice President at PRIUM, a utilization review company, regarding effective management of compound creams.

In Mr. Pew’s opinion, there are three primary reasons workers’ compensation doctors decide to prescribe compound creams over traditional drugs:

• The compound is FDA-approved and is the best treatment option. Unfortunately, because most workers’ compensation compounds are topical creams for “pain management,” the actual percentage that fits this legitimate use is very small.

• The FDA-approved drug cannot be used in the FDA-approved form. For example, if a claimant cannot swallow the pill or has a side effect such as acid-reflux when taking the pill, then reformulating the drug into a compound cream may make more sense. However, this alternative delivery method should only be recommended and used after the FDA-approved form has been tried and failed.

• Revenue Opportunity. Some physicians make money directly by owning a compounding pharmacy, creating the cocktail themselves, or using prepackaged compounds. Other physicians make money indirectly by earning commissions or fees paid by compounding pharmacies per referral. Mr. Pew believes revenue opportunity is unfortunately the largest driving factor for a physician to prescribe compound creams.

Mr. Pew also discussed how an insurer or third-party administrator can ensure they are paying for workers’ compensation related medicine rather than non-comp related medicine added to the compound, or that they are not being double billed for the same drug. In his opinion:

The payer needs to know exactly what is included in the compound. Every drug and filler should be listed along with the proportional dosage of each. Often that does not come with the compound’s invoice, which means the payer has to contact the compounding pharmacy for the precise details. Once the complete list of ingredients is documented, they can be compared to other drugs being taken and compensable diagnoses.