Medical Treatment Cost-Containment

It is well-known that following a compensable work injury, the employer is required to provide reasonable and necessary medical treatment to cure and relieve the effects of that injury. Therefore, if an authorized treating physician (“ATP”) prescribes medication, the filling pharmacy must be reimbursed by employer. When it comes to paying for that treatment, both the Workers’ Compensation Act (“Act”) and Workers’ Compensation Rules of Procedure are silent on whether a claimant may be required by his employer to use cost-containment measures. However, in Taravella v. US Bancorp, the Industrial Claims Appeals Office (“Panel”) affirmed an Administrative Law Judge’s (“ALJ”) decision that Employer could not impose a duty upon Claimant to use a specific pharmacy payment card to fill his prescriptions, although such card was a cost-containment measure.

In Taravella, Claimant received prescriptions from his ATP and filled these prescriptions at pharmacy “IWP” since 2012. Employer has previously refused to pay IWP bills, stating that the reason was Claimant had been instructed to use a pharmacy payment card, but did not, when receiving medication from IWP. The pharmacy payment card would have provided Employer discounts on medication. IWP sought payment from Employer for the prescriptions. Employer then sought relief from paying for the prescriptions, claiming that Claimant had an affirmative duty to use the pharmacy payment card but failed to do so. The ALJ ordered Employer to pay for prescriptions filled by IWP for Claimant, finding it reasonably necessary for IWP to continue filling Claimant’s prescription without requiring use of the pharmacy payment card. Employer appealed.

Employer claimed that the ALJ erred in finding that it was reasonably necessary for IWP to continue filling Claimant’s prescriptions without requiring use of the pharmacy payment card. Employer contended that by failing to use the card, the Claimant unreasonably increased the price Employer would have to pay for medications. Employer asserts that the Claimant had an affirmative duty to use the card to obtain his prescriptions at a price lower to the Employer. However, the ALJ found that neither the Act nor the Workers’ Compensation Rules of Procedure impose such a duty to contain costs upon claimants. Therefore, the ALJ found that Claimant could fill his prescriptions without using the card and Employer would still have to pay IWP.

Additionally, the ALJ found that Employer’s requirement to use the pharmacy payment card may have limited Claimant’s ability to use his pharmacy of choice. Although the card apparently worked at many pharmacies (including CVS, Walgreens, and “other small pharmacies”), the ALJ inferred that using the card would cause Claimant the need to change pharmacies. The Panel found this to be a plausible inference made from the evidence in the record, as ALJ findings may be based on reasonable inferences from circumstantial evidence.

The Panel affirmed that Claimants have no duty to use a cost-containment measure imposed by the employer when seeking medical treatment. Additionally, injured employees are permitted to fill prescriptions at pharmacies of their choice. For those reasons, the Panel found that there was no basis to disturb the ALJ’s order.

Taravella v. US Bancorp, W.C. No. 4-797-901 (ICAO, July 15, 2020)

Want to know more? Contact Brad Miller at or 877-259-5693.

August 2020 Newsletter