Have you set up a Pharmacy Benefit Network? (See Labor Code 4600.2) Are you even aware of Labor Code 4600.2? The recent Panel Decision Brambila v. Vons Inc., ADJ724329 is a prime example of why you should be aware of it.

In Brambila, the defendant had established a Pharmacy Benefit Network (PBN). A lien claimant had provided medications as prescribed by doctors in the Medical Provider Network (MPN). However, the lien claimant was not a member of the PBN and was attempting to collect additional payments totaling $6,345.75 above and beyond what the defendants had reduced the bills per their review. The defendants provided testimony and evidence at trial establishing: (1) The establishment of a PBN; (2) Proper notices were sent to the workers, their attorneys and the doctors within the MPN; (3) The contract which memorialized the PBN; (4) Evidence which showed the DWC had been notified of the PBN; (5) Evidence of notification to the applicant of the establishment of the PBN and sent brochures describing the PBN; (6) Evidence that a PBN benefit card had been provided to the applicant.

The WCJ ultimately found that the defendants had no further liability to the lien claimant. The lien claimant petitioned for reconsideration. In denying the petition, the Panel noted that there was no dispute that the lien claimant was not within the PBN. They also noted that there was a legitimate formation of a PBN and proper notices were sent to the relevant parties and MPN doctors. Ultimately they considered the WCJ’s determination that the defendant was not liable for medications dispensed outside the PBN was justified.

Why is this important? How much do you spend on pharmacy costs per year? Despite earlier reforms, pharmacy costs continue to climb and are a significant percentage of medical costs. California’s pharmacy costs, even with fee schedules, are higher than most other states. With the proper implementation, the formation of a PBN is an effective way of reducing a significant percentage of your medical costs. In the long run, you may also have the added benefit of reducing litigation costs regarding these liens if you implement and enforce the PBN. If you have established an MPN, why wouldn’t you go the next step and establish a PBN?