Reining in Opioids

Opioid Abusers Cost Employers $8 Billion Annually

A new report suggests that the prescription opioid crisis is getting worse, not better.
By: | May 9, 2016 • 3 min read

Opioid-abusing employees cost their employers up to $8 billion a year, according to a new study.

Castlight Health, a health benefits platform provider, found that companies paid nearly twice as much in health care expenses for opioid abusers than non-abusers — $19,450 compared to $10,853.

“Based on Castlight’s estimate, opioid abuse could be costing employers as much as $8 billion per year,” according to “The Opioid Crisis in America’s Workforce.”

“Considering that absenteeism and presenteeism tied to opioid misuse and abuse is costing employers an additional estimated $10 billion, this crisis represents a significant drain on America’s employers.”

“Many employees do not recognize the serious risk of addiction before they accept or fill an opioid prescription of any length.” — “The Opioid Crisis in America’s Workforce,” Castlight Health

Castlight examined nearly 1 million health care claims involving opioid prescriptions for the period 2011 to 2015 for workers at large, self-insured companies.

Leveraging Analytics and Education

Employers may save money by leveraging data and analytics to identify opportunities to help employees who abuse opioids.


“Whether it’s guiding an employee away from unnecessary back surgery (and the resulting opioid prescriptions) or offering programs that provide access to opioid abuse treatment, Castlight believes that data and analytics are part of the solution.

“For example, better insights can help a benefit leader identify where lower back pain or depression, two conditions closely associated with opioid abuse, are most prevalent in their company.”

Targeting educational content to such employees will help inform them of the dangers of opioids.

Individuals with a behavioral health diagnosis of any kind are three times more likely to abuse opioids than those without such a diagnosis.

“Many employees do not recognize the serious risk of addiction before they accept or fill an opioid prescription of any length,” the study said.

Abuse Factors

The report also identified some common themes about workers more likely to abuse opioid prescriptions.

• Individuals with a behavioral health diagnosis of any kind are three times more likely to abuse opioids than those without such a diagnosis, and nearly 9 percent of people with a single behavioral health diagnosis such as anxiety or depression were found to abuse opioids, compared to 3 percent of individuals without a behavioral health diagnosis.

“This finding is striking given the prevalence of behavioral health issues in the workforce,” the report said. “Twenty-five percent of employees have a diagnosable behavioral health condition; yet 70 percent of impacted employees go untreated.”

• Opioid abusers also have twice as many pain-related conditions as non-abusers, especially joint, neck and abdominal pain.

• Baby boomers are four times more likely to abuse opioids than millennials. More than 7 percent of workers age 50 and older were classified as opioid abusers, compared to 2 percent of those aged 20 to 34.

• States with medical marijuana laws are nearly twice as likely to have a lower opioid abuse rate than those that don’t, by a margin of 5.4 percent to 2.8 percent.

• Opioid abusers are more likely to live in the rural South and live in low-income areas.

• Opioid abuse rates range from 11.6 percent of individuals in Wilmington, N.C., to 7.5 percent of individuals in Fort Smith, Ark..

• Alabama, Florida, North Carolina, Oklahoma, North Carolina, Tennessee and Texas have multiple cities that are in the top 25 for opioid abuse rate. The three non-southern cities in the top 25 are: Terre Haute, Ind.; Elmira, N.Y.; and Jackson, Mich.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Pharmacy Cost Control

Industry Group Calls for Opioid Restraint in MSAs

The National Alliance of Medicare Set-Aside Professionals is calling for limits on the duration and doses of opioids.
By: | May 6, 2016 • 3 min read
bottle of pills

Medicare set-asides are the latest battleground for the effort to stem opioid abuse. A nonprofit organization that helps companies with the process for adhering to the Medicare Secondary Payer statute is calling on a government agency to set limits on the duration and doses of the drugs.


Despite research showing the ineffectiveness and risks of opioids for most injured workers, the Centers for Medicare and Medicaid Services continue to seek large payments for opioids in MSAs. The National Alliance of Medicare Set-Aside Professionals is asking CMS to instead use evidence-based guidelines in considering the costs for opioids included in MSAs.

“CMS’ own opioid overutilization policy recommends Part D sponsors lower their safety edits to set red flags for beneficiaries taking a 120 mg morphine equivalent daily dose for more than 90 days and with prescriptions from more than three prescribers/pharmacies,” NAMSAP said in a statement.

“So why do workers’ compensation MSA approvals often include future prescription allocations with Morphine Equivalent Dosages in excess of 120, 200, or even 500 per day, over the beneficiary’s full life expectancy?  And what message does a workers’ compensation MSA supporting these high opioid dosages over a patient’s entire life expectancy send to the addicted patient?”

“Why do workers’ compensation MSA approvals often include future prescription allocations with Morphine Equivalent Dosages in excess of 120, 200, or even 500 per day, over the beneficiary’s full life expectancy?” — statement from the National Alliance of Medicare Set-Aside Professionals

The organization is asking CMS to limit projected costs of opioids in MSAs by using a hard cap of 90 MED based on CDC guidelines for no more than one month when the MSA includes a surgical projection and/or a hard cap of 40 MED for no more than one month followed by a 10 percent per week mandatory tapering and weaning plan, as recommended by the CDC, until fully weaned from opioids.

The request comes on the heels of the Centers for Disease Control and Prevention’s recently released opioid guidelines.

“With all the attention [on opioids], you have the Medicare set-aside and you have the requirements from CMS in terms of preparing that set-aside that require you to take current medical and pharmacy treatment and project the cost of that over the life expectancy of the beneficiary,” said Rita M. Wilson, a NAMSAP board member and CEO of Florida-based Tower MSA Partners.

“In a real-world example of a person taking 20 mg of Oxycontin three times per day, what CMS will expect you to do is to project the cost of 20 mg of Oxycontin over the life expectancy of the beneficiary. So if the person is 50 and will live to 82, that’s 32 years. While on one hand it’s a dollar value, on the other hand it absolutely violates every treatment guideline we know of.”

Counterproductive Care

NAMSAP cites various studies showing that long-term use of opioid medications for chronic, non-cancer pain is “ineffective, counterproductive and, if left unchecked, deadly.” It says the risk of disability at one year doubles for patients using opioids for more than seven days, and many of those prescribed opioids for more than three months will still be on the drugs in five years.


“Opioids are not intended for long-term use, they are not intended to manage chronic pain. They are for acute pain and intended for the short term,” Wilson said. “We’re saying, in a real-world situation, in practice, you’d never allocate for these, you’d never allow this to continue for 20 or 30 years; yet CMS is basically doing that.”

NAMSAP suggests MSA vendors and CMS work together to address the opioid epidemic. “While we recognize the ultimate goal is to come up with a dollar value that adequately considers Medicare’s claim, the treatment that is being applied to create that number is treatment that is in conflict with its own guidelines.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Sponsored Content by IPS

Compounding: Is it Coming of Age?

Prescription drug compounding is beginning to turn a corner in managing chronic pain.
By: | April 28, 2016 • 5 min read

The WC managed care market has generally viewed the treatment method of Rx compounding through the lens of its negative impact to cost for treating chronic pain without examining fully the opportunity to utilize “best practice” prescription compounds to help combat the opioid epidemic this nation faces. IPS stands on the front lines of this opioid battle every day making a difference for its clients.  

After a shaky start cost-wise, prescription drug compounding is turning the corner in managing chronic pain without the risk of opioid addiction. A push from forward-thinking states and workers’ compensation PBMs who have the networks and resources to manage it is helping, too.

Prescription drug compounding has been around for more than a decade, but after a rocky start (primarily in terms of cost), compounding is finally coming into its own as an effective chronic pain management strategy – and a worthy alternative for costly and dangerous opioids – in workers’ compensation.

According to Greg Todd, CEO and founder of Integrated Prescription Solutions Inc. (IPS), a Costa Mesa, Calif.-based pharmacy benefit manager (PBM) for the workers’ compensation and disability market, one reason compounding is beginning to hit its stride is because some states have enacted laws to manage it more effectively. Another is PBMs like IPS have stepped up and are now managing compound drugs in a much more proactive manner from an oversight perspective.

By definition, compounding is a practice through which a licensed pharmacist or physician (or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist) combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

During that decade, Todd explains, opioids have filled the chronic pain management needs gap, bringing with them an enormous amount of problems as the ensuing addiction epidemic sweeping the nation resulted in the proliferation and over-consumption of opioids – at a staggering cost to both the bottom line and society at large.

As an alternative, compounded topical cream formulations also offer strong chronic pain management but have limited side effects and require much reduced dosage amounts to achieve effective tissue level penetration. In fact, they have a very low systemic absorption rate.

Bottom line, compounding provides prescribers with an excellent alternative treatment modality for chronic pain patients, both early and late stage, Todd says.

Time for Compounding Consideration

IPS_SponsoredContentThat scenario sets up the perfect argument for compounding, because for one thing, doctors are seeking a new solution, with all the pressure and scrutiny they’re receiving when trying to solve people’s chronic pain problems using opioids.

Todd explains the best news about neuropathic pain treatment using compounded topical analgesic creams is the results are outstanding, both in terms of patient satisfaction in VAS pain reduction but also in reduction potentially dangerous side effects of opioids.

The main issue with some of the early topical creams created via compounding was their high costs. In the early years, compounding, which does not require FDA approval, had little oversight or controls in place. But in the past few years, the workers compensation industry began to take notice of the solid science. At the same time, medical providers also were seeing the same science and began writing more prescriptions for compounding – which also offers them a revenue stream.

This is where oversight and rigor on the part of a PBM can make a difference, Todd says.

“You don’t let that compounded drug get dispensed when you’re going to pay for it without having a chance to approve it,” Todd says.

Education is Critical

IPS_SponsoredContentAt the same time, there is the growing, and genuine, need to start educating the doctors, helping them understand how they can really deliver quality pain management to a patient without gouging the system. A good compounding specialty pharmacy network offering tight, strict rules is fundamental, Todd says. And that means one that really reaches out to work with the doctors that are writing the prescriptions. The idea is to ensure that the active ingredients being chosen aren’t the most expensive sub-components because that unnecessarily will drive the cost of overall compound “through the ceiling.”

IPS has been able to mitigate costs in the last couple years just by having good common sense approach and a lot of physician outreach. Working with DermaTran Health Solutions and its national network of compounding pharmacies, IPS has been successfully impacting the cost while not reducing the effectiveness of a compounded prescription.

In Colorado, which has cracked down on compounding profiteering, Legislative change demanded no compound could be more than $350.00 period. What is notable, in an 18-month window for one client in Colorado, IPS had 38 compound prescriptions come through the door and each had between 4 and 7 active ingredients. Through its physician education efforts, IPS brought all 38 prescriptions down 3 active ingredients or less. IPS also helped patients achieve therapeutic success (and with medical community acceptance). In that case, the cost of compound prescriptions was down to an average of $350, versus the industry average of $788. Nationwide IPS has reduced the average cost of a compound prescription to $478.00.

Todd says. “We’ve still got a way to go, but we’ve made amazing progress in just the past couple of years on the cost and effective use of compound prescriptions.”

For more information on how you can better manage your costs for compound prescriptions, please call IPS at 866-846-9279.



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with IPS. The editorial staff of Risk & Insurance had no role in its preparation.

Integrated Prescription Solutions (IPS) is a Pharmacy Benefit Management (PBM) and Ancillary Services partner to W/C and Auto (PIP) Insurance carriers, Self Insured Employers, and Third Party Administrators who specialize in Workers Compensation benefits management.
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