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Katie Siegel

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at

Pharmacy Cost Strategy

State PDMP Regulation Important for Opioid Control

The CDC highlights trouble zones for painkiller prescriptions, but lauds states with effective drug monitoring.
By: | July 18, 2014 • 4 min read
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In July, the CDC’s monthly report Vital Signs identified the states with the highest and lowest prescription rates for opioid painkillers — and the range is wide. While most states have some form of a prescription drug monitoring program (PDMP), their levels of effectiveness vary widely due to differences in enforcement and a lack of consensus over the appropriateness of opioid prescriptions.

“Health care providers wrote 259 million prescriptions for painkillers in 2012, enough for every American adult to have a bottle of pills,” the report said. Alabama and Tennessee were the highest-prescribing states, writing 143 painkiller prescriptions per every 100 people.

The report also gave kudos to states that have decreased opioid usage through tightened PDMPs and state enforcement. In the continental U.S., California had the lowest rate of prescriptions written in 2012 (second only to Hawaii overall), with opioids prescribed for only 57 out of every 100 people, compared to the national average of 82.5. In fact, California’s numbers were below average for all types of opioid pain relievers, including high dose, long-acting and benzodiazepines.

The state’s success can be attributed to its Controlled Substance Utilization Review and Evaluation System (CURES). The drug monitoring program requires dispensing pharmacy clinics to submit reports of all Schedule II through IV prescription drugs to the Department of Justice at least once per week, making its database an almost real-time source of patient prescription history. Health care practitioners can access the database to see a patient’s prescription history for painkillers dispensed anywhere in the state.

“Automated Patient Activity Reports (PARs) are available to physicians who log into their online PDMP accounts,” said Larissa Mooney, assistant clinical professor of psychiatry and director of the Addiction Medicine Clinic at UCLA. “These reports allow instant viewing of controlled substance prescription histories over designated time periods. Information provided by this database is one step towards reducing abuse and diversion of prescription drugs and their associated consequences.”

According to California’s Department of Justice website, the database contains over 100 million entries and responded to 1,063,952 report requests in fiscal year 2011-2012. Unlike other states, California does not require physicians to use the database before prescribing high-strength painkillers; their decisions to view patient histories are completely voluntary.

Dr. Karen Miotto, a physician in UCLA’s psychiatry and biobehavioral sciences department and leader of its addiction psychiatry services, told the CDC that supportive state agencies and medical associations have also bolstered the program, promoting its use through education initiatives.

Inadequate Education

Lack of addiction education in medical schools and too few substance abuse resources can undermine drug monitoring programs’ success.

“Physicians vary widely in their knowledge of substance use disorders and their ability to identify, diagnose and treat such disorders,” Mooney said. “Educating physicians on addiction risk factors, screening and clinical interventions could facilitate increased use of PDMP programs and incorporation of controlled substance prescription monitoring within clinical practice.”

Better education could spur physicians to identify patients at risk for addiction, seek alternative drugs for pain management, and prescribe only the lowest possible dose of opioids when necessary.

“Health care providers wrote 259 million prescriptions for painkillers in 2012, enough for every American adult to have a bottle of pills.”
— CDC Vital Signs; Opioid Painkiller Prescribing: Where You Live Makes a Difference; July 2014

In addition to lack of education, the report notes another key struggle states encounter with PDMPs is “complicated access and notarization procedures.” This is an area where state governments could intervene, creating policies to help streamline the process for those submitting and accessing data. California may have had an easier time with this since CURES is administered by its Department of Justice, rather than a pharmacy board or licensing agency, or Health and Human Services department.

State policies tightening regulation of for-profit pain clinics — or “pill mills” — could also reduce the prevalence of opioid prescription for non-medical use, a significant driver of demand for the drugs.

Another barrier may be the lack of a national database. Even in states with effective PDMPs, practitioners have an incomplete picture, seeing only what painkillers a patient has received in their own state but not others. While no plans for a national resource exist, the CDC report said the federal government can assist state PDMPs by “supplying health care providers with data, tools, and guidance for decision making based on proven practices,” and “increasing access to mental health and substance abuse treatment through the Affordable Care Act.”

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at
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Workers' Comp Reform

Options in Oklahoma

Oklahoma’s opt-out system has employers intrigued, but taking a "wait and see" approach.
By: | July 11, 2014 • 4 min read
OK State Capitol Building

The Oklahoma Option is up and running, with four qualified employers and three approved carriers as of July 1.

Scott Taylor, president of qualified employer Taylor & Sons Pipe & Steel, is a believer in the alternative structure. He expects opting out of the traditional workers’ comp system to not only save costs, but deliver better care for injured workers.


The Option “allows you to have a discourse with the employee instead of being taken out of that conversation,” Taylor said. “Under the workers’ comp system, once there’s an injury that’s documented and enters the system, as an employer, your hands are tied completely. You never have an idea what’s taking place. You’re just given decisions and expected to accept those decisions.”

By offering benefits outside of that system, he said, employers can sit down with their workers and figure out which doctors and facilities will best suit them. Greater control over their care, as well as requirements to immediately report injuries, will theoretically instill greater accountability in injured workers and speed return to work.

“The Option allows you to have a discourse with the employee instead of being taken out of that conversation.” — Scott Taylor, president, Taylor & Sons Pipe & Steel

Which benefits employers’ budgets as much as employees’ well-being and productivity.

“We’re probably looking at 20 to 25 percent cost savings,” said Taylor, who employs around 40 workers. “The type of doctors that were available in the system have abused that system for quite some time. Now our employees can go to different facilities that may be half the cost.”

The three other qualified employers are Brookhaven Hospital, Inc. and Alpha Home Healthcare Inc., both offering healthcare services, and Regis Corporation, a hair care franchise.

For now, though, the interest from many other employers is somewhat tentative. Because Oklahoma’s workers’ comp system – previously one of the country’s most expensive – was overhauled at the same time as the Option’s introduction, many employers will wait to see how the two new frameworks compare.

“Accomplishing workers’ compensation reform was a significant challenge for the legislature,” said James Mills, director of workers compensation for Oklahoma. His department is “busy educating the insurance industry, employers and all other interested parties in how to take part in the Option.”


“A lot of employers will wait a year or two to see what their numbers look like under the new workers’ comp system before deciding if they want to opt out,” said Mark Walls, VP of communications and strategic analysis for Safety National, whose Option policy was the first to win state approval . “They want to see what the new normal will be. It’s going to take a couple of years before you see opt-out gaining full traction in Oklahoma.”

Darlene Freeman, ECA division president at Great American Insurance Group, said she expects the number of submissions for Option policies to grow “substantially” as employers realize its benefits. To date, Great American Security Insurance Co. has received more than 70 submissions as well as daily inquiries from all company sizes.

“It’s going to take a couple of years before you see opt-out gaining full traction in Oklahoma.” — Mark Wall, vice president, communications and strategic analysis, Safety National

Now the second state to allow opting out of the workers’ compensation system, Oklahoma still requires employers using the alternative system to meet the minimum benefit standards set by traditional workers’ comp plans.

“That’s very different from Texas,” Walls said. “Under the Texas system, employers simply need to notify the state and their employees that they are opting out and they don’t have to provide any workers’ comp benefits,” though many do choose to provide coverage of some kind.

Safety National and the two other approved carriers, including Great American and OneBeacon Insurance Co., already offer alternative opt-out plans in Texas.

“There are several employers who opted out of workers’ comp in Texas that also do business in Oklahoma, so the thought is they’ll eventually consider opting out in Oklahoma, too,” Walls said.

Freeman echoed the prediction. “Many large national employers who non-subscribe in Texas will be among the first to elect the Option for their Oklahoma operations,” she said.

The increased employee accountability and better medical outcomes that Option advocates are counting on will also mean quicker claims, a boon to both employers and carriers.

“Our experience with Texas non-subscription has proven that when employers take some of the risk with a self-insured retention or deductible, the result is a safer workplace and overall reduction in losses,” Freeman said. “The resulting reduction in claims costs will allow employers to use their savings to grow their businesses, hire more employees and offer additional benefits.”


Claim disputes will still be adjudicated in the workers’ compensation court system rather than civil court, another key difference from Texas. This preserves exclusive remedy for employers and results in a “much more structured” opt-out system than the one established in Texas, according to Walls. Freeman also claims that immediate reporting requirements and better medical care will ultimately result in fewer fraudulent claims for those courts to handle.


Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at
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Emerging Risk

Mobile Kitchens Serving Up Big Risks

A recent food truck explosion highlights need for tighter safety protocols.
By: | July 9, 2014 • 4 min read
Photo by George Garrigues

La Parrillada Chapina, one of about 200 food trucks operating in the Philadelphia area, was conducting business as usual on the evening of July 3 when its kitchen turned into an accidental bomb.

Fire from the truck’s cooking grills ignited fumes leaking from a 4-foot propane tank used to power its equipment. The resulting explosion engulfed the entire truck and sent flames shooting across the street and the tank soaring into a nearby backyard.

Eleven people were injured, some critically, including the owner and her daughter as well as several passers-by.

Video: Watch the incredible video from Philadelphia that shows a food truck exploding into a ball of flames.

“Propane is a particularly volatile material,” said Jeff Hallman, vice president, Restaurant Programs of America. “It tends not to disperse into vapor in the same way that gasoline does. Rather, it tends to collect in the lowest lying area and has an extremely low flashpoint, meaning that the smallest spark will ignite it.”

The incident revealed a gap in safety procedures and inspection regarding such tanks.


Philadelphia health inspectors ensure food trucks’ compliance with health codes, while the Department of Licenses and Inspections issues the necessary commercial business licenses, according to the Philadelphia Inquirer. But no one has clear jurisdiction over inspection of the propane tanks.

“I am not sure what, if any, regulations and inspection protocols are in place for propane powered mobile cooking facilities,” Hallman said. (Hallman is a Risk Insider, whose initial article talks about how an over-reliance on modeling is diminishing the art of underwriting.)

The rapidly rising number of food trucks across the nation only increases the likelihood of tragedy and the need for tighter safety procedures.

La Parrillada Chapina is one of about 200 food trucks operating in the Philadelphia area, up from a mere 12 just three years ago. These mobile restaurants aren’t just doling out hot dogs and cheesesteaks.

They’ve become popular for providing unique cultural dining experiences, cooking up the type of specialty items with quality ingredients usually sought by foodies in niche cafes, all from kitchens the size of closets.

Duane DeBruyne, a spokesman for the Federal Motor Carrier Safety Administration, told the Inquirer that “street-side food trucks are exempt from federal regulations concerning propane if the tanks are under 220 pounds, or 440 pounds per vehicle.” La Parrillada Chapina had two 100-pound tanks.

A similar explosion occurred in New York City in 2011, when a food truck burst into flame after a car accident. In 2012, a food truck exploded at the Canadian National Exhibition, causing $30,000 in damages but no injuries. Just last year, a propane leak sparked the explosion of a food truck at a high school football game in Fresno, Calif.

No deaths have occurred from these accidents, but the force of these explosions certainly makes that a possibility.

“Accidents like this can actually help to further safety regulations to protect the public and food truck operators,” said Denny Christner, principal of Bay Risk Insurance Brokers and its wholly-owned affiliate, Insure My Food Truck. (See his profile as one of the 2014 Power Broker® winners here.)

“It’s also a good time for food truck owners to closely look at their insurance coverage to protect them personally, to protect their business and to protect their employees,” he said.

Christner outlined a combination of general liability, commercial auto and workers’ comp coverage to cover losses in the event of an explosion. General liability would cover third-party injury and property damage, usually up to a limit of $1 million, he said, after which an umbrella policy would kick in. Commercial auto would cover the truck itself as well as its kitchen modifications and equipment.

Workers’ comp would cover first-party injury — an important piece that owners may not consider since many food trucks are family-run.


“Many food truck owners think they are exempt because they hire family, but this is not the case unless the family members are owners of the business,” Christner said. “It is very rare that we see food trucks offering health insurance to their staff. All on-the-job injuries would need to be covered by workers’ compensation insurance.”

According to Christner, most gourmet food trucks carry general liability policies because the venues they serve usually require at least $1 million of coverage per occurrence. They also carry auto liability because they know they need it to protect their business. However, “because it’s hard to make a decent profit in this business, we find that many food trucks may carry low limits to keep their insurance costs down.”

“It would be a good time,” he said, “for food truck owners to ask their agent or broker, ‘How would my current coverage respond to a loss like the explosion that just occurred?’ and ‘What can I do to increase coverage or add protection should my current coverage not be sufficient?’ ”

(Photo by George Garrigues)

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at
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