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Controlling the Cost of Compound Creams

September 22, 2015


Since 2012, the insurance industry has seen a marked increase in the prescription of compound creams.  Furthermore, Pennsylvania ranks as one of the states most impacted by this trend.   Despite this increase, some medical professionals doubt the effectiveness, and necessity, of compound creams.  So the question becomes, what can we do about this costly treatment when prescribed in the workers’ compensation setting? 


The first step is to carefully scrutinize every bill and corresponding medical report submitted.  The Pennsylvania Workers’ Compensation Act requires medical providers to submit periodic reports including the history, diagnosis, treatment, prognosis and physical findings made by that provider.  Nonetheless, bills for compound creams are often received without the required supporting documentation and, therefore, are not submitted in accordance with the Act. It is important to remember that until the required supporting documentation is received, the employer does not have an obligation to pay for the treatment billed. 


The second step is to review the supporting documentation and determine whether the compound cream is being prescribed to treat an accepted or adjudicated work injury.  Remember, employers are only responsible for the payment of reasonable and necessary medical bills which are causally related to the accepted work injuries.  Additionally, the employer always has the option of requesting additional information from the provider to assist in making a payment determination.   Therefore, if the supporting documentation does not clearly identify which body part or injury the treatment is addressing, a claims professional can request additional information from the provider which may assist in making a reasoned decision as to whether to make payment or deny the treatment as unrelated to the injury.


Assuming the medical documentation supports a causal relationship between the compound cream prescription and the work injury, the third step is to consider challenging the submitted bill through the Utilization Review Process.  This will allow a medical provider assigned by the Bureau to determine the reasonableness and necessity of the compound cream based on the Claimant’s injuries and responses to the cream.  The filing of a Utilization Review Request also stays the employer’s obligation to pay for the challenged treatment, until a determination is rendered.  Keep in mind, the Utilization Review Request must be filed within 30 days of employer’s receipt of the medical bill being challenged.   Ultimately, the determination may require the filing of a Petition to Review Utilization Review, and caselaw requires that the Employer have a reasonable basis to contest the treatment BEFORE litigating the Utilization Review, so an IME or record review may be warranted before taking the Utilization Review step.


As always, the Pennsylvania Workers’ Compensation Act continues to provide tough challenges in controlling the escalating medical costs presented.  However, there are steps which can be taken to attempt to mitigate the medical costs.

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