Opioids an Obstacle to Better Claim Outcomes
On a weekly if not daily basis, there are media reports about the growing impacts of addiction to opioids. The Centers for Disease Control and Prevention (CDC) reports that 78 people a day are dying from the effects of opioid overdose. Families are being systematically destroyed by the multiplicity of effects of this increasingly pervasive problem.
In 2014, there were more than 47,000 drug overdose deaths in the United States and more than 28,000 of those deaths were caused by opioids. The American population makes up only 5 percent of the global population, and yet it consumes 80 percent of all opioids produced in the world.
This strongly implies there is a societal, cultural profile in America that is unlike anywhere in the world, driving such demand and overuse.
As the national “epidemic” of opioid abuse continues to get increasing attention, it’s important to realize the effect it has on employers. Prescription opioid abuse alone cost employers more than $25 billion in 2007.
The American population makes up only 5 percent of the global population, and yet it consumes 80 percent of all opioids produced in the world.
In addition, when injured workers are prescribed opioids long term, the length of the claim increases dramatically — even more so when other addictive medications like benzodiazepines (alprazolam, lorazepam) are prescribed.
Perhaps the most troubling statistic of all, 60 percent of injured workers on opioids 90 days post-injury will still be on opioids at 5 years.
Strategies for the Claims Team
While there is certainly responsibility and accountability on behalf of the patient and his/her doctor to mitigate this risk, here are a few final things workers’ comp claim professionals should consider in the overall strategy of managing claims involving opioid prescriptions and which, if not managed closely, may lead to abuse and addiction.
Develop and define a strategy for identifying and then monitoring physician prescribing patterns and the specific use patterns in each affected case. Some of the tactics that should be considered include:
- Leveraging pharmacy utilization review services
- Directing patients to doctors who won’t overprescribe opioids, and those who use prescription drug monitoring programs and tools, which are available in most states
- Engaging nurse case managers early and regularly; their involvement and intervention can help deter addiction. Nurses can advocate for other more clinically appropriate options, and advocate for best practices including risk assessments, opioid contracts, pill counts and random drug screens
- Ensuring that injured workers are getting prescriptions through pharmacy benefit management networks
- Leveraging fraud and investigative resources that are often useful in uncovering underlying, unrelated patterns of behavior that would indicate a propensity for opioid abuse
- Considering the cost of opioids versus alternatives; while many alternate treatment modalities are on the front-end more expensive, certain drugs may be much more expensive in the long term, especially if they lead to addiction
- Addressing the opioid issue well before case settlement; as with most longer term open claims scenarios, those with opioid use will only produce worse outcomes and get more expensive over time without appropriate early interventions
Continued vigilance by claims professionals can enable and facilitate a better result at closure and avoid a lot of potential pain for the injured worker along the recovery path.
Bluegrass State Leads the Opioid Fight
Central Appalachia earned a distinction as the epicenter of the nation’s opioid-addiction epidemic for a number of reasons. Two key factors are the complex injuries suffered by coal miners and the physical demands placed on workers toiling in other hazardous industries in that region such as logging and trucking.
Others include the region’s economic misfortunes, lax prescribing practices, access to pill mills, and pharmaceutical company marketing. All led to an ongoing drug-abuse scourge that surfaced there in the 1990s, studies and observers report.
“Central Appalachia, which for us is eastern Kentucky, was one of the first areas to see the opioid epidemic explode in the 1990s,” said former Bluegrass State attorney general Jack Conway. “Because in Appalachia you had mining, you had a lot of heavy industry, trucking, and more workplace injuries on average than you would in other parts of the state. You saw an increase in the prescribing and utilization of opioids and it created an addiction epidemic.”
“I think we have more tools in the states that have been battling this [opioid epidemic] for some time. That has made us stronger in the ability to control it.” — Cindy Whitehouse, CEO and founder, Ascential Care
Now, as the rest of the nation experiences opioid abuse patterns seen early on across Central Appalachia, Kentucky provides examples for battling back against the epidemic.
In 2012, Kentucky became the first state among jurisdictions adopting stricter prescription-drug monitoring programs (PDMPs) with objective criteria mandating when prescribers must register and review a state database of patient prescription histories, Brandeis University’s PDMP Center of Excellence reports.
State PDMPs seek to change provider prescribing practices and prevent patients from doctor-shopping to obtain multiple prescriptions.
Kentucky’s latest PDMP was born from a 2012 comprehensive law adopted to combat opioid abuse.
“Kentucky has a great [PDMP] system,” said Tom Clark, research associate for the Brandeis Center of Excellence. “It is very well supported by the state. Of course, this is all a response to Kentucky being in the epicenter of the prescription drug abuse epidemic and it has been for a long time.”
While all states except Missouri have PDMP laws, participation in many states remains voluntary, said Brian Allen, VP of government affairs for Optum workers’ comp and auto no-fault. In the last three years or so, however, more jurisdictions are making their use mandatory.
“There has been a lot more renewed emphasis on [PDMPs] because everybody has been trying to get their heads around this opioid problem,” he said.
A May 2016 Center of Excellence report with data from Kentucky and the other states indicates that increased PDMP use immediately impacts controlled substance prescribing and doctor-shopping.
Yet only a few states have laws as strict as Kentucky’s, requiring all prescribers to register and check their PDMPs when initially prescribing opioids and benzodiazepines, and again every three months when continuing the prescriptions, the PDMP Center of Excellence reports.
Meanwhile, reports linking Central Appalachia’s work injuries to drug abuse have persisted for years.
A 2002 combined U.S. Justice Department and Kentucky State Police assessment described a growing threat from prescription painkillers. The threat was so specific to Appalachia that opioids and opiates became known disrespectfully as “hillbilly heroin.”
“In the eastern coal mining counties of Kentucky, the large-scale diversion and abuse of painkillers are particular problems,” the report warned. “In the past, coal miners spent hours each day crouched in narrow mine shafts. Painkillers were dispensed by coal mine camp doctors in an attempt to keep the miners working. Self-medicating became a way of life for miners, and this practice often led to abuse and addiction among individuals who would have been disinclined to abuse traditional illicit drugs.”
Michelle Landers, VP and general counsel for Kentucky Employers Mutual Insurance, agreed that eastern Kentucky’s historical dependence on coal mines, and related service industries like trucking, helped link workplace injuries and chronic pain with opioid use.
KEMI, which issues policies to coal mines, is the Bluegrass State’s largest workers’ comp insurer.
Coal operations provide one of eastern Kentucky’s few employment opportunities.
Mining also produces severe workplace injuries, caused by accidents such as cave-ins or heavy machinery malfunctions, Landers said.
“We have, from early on, taken the approach that if we don’t feel it’s appropriate and we don’t get cooperation from the physician, we are going to challenge it.” — Michelle Landers, VP and general counsel, Kentucky Employers Mutual Insurance
“It’s not an industry where you are going to have small injuries,” she elaborated.
“They are typically severe or the chronic type of injuries you expect from people being underground.”
Kentucky’s private-industry workers, in general, experience a high injury rate. U.S. Department of Labor statistics for 2014 ranked Kentucky among 19 states with a recordable injury rate significantly higher than the national average.
Centers for Disease Control and Prevention data for the same year, meanwhile, shows Kentucky among five states with the nation’s highest rate of overdose deaths.
KEMI first discovered a frequent use of the narcotic OxyContin to treat work injuries after contracting with a pharmacy benefit manager in 2001, Landers said. The PBM data revealed questionable practices, such as doctors prescribing high doses of the drugs early in the course of treatment for back strains.
“We were seeing things out there about the high levels of addiction and [overdose] deaths and we didn’t want to contribute to that,” Landers said.
So KEMI became an early adopter of measures like educating adjusters and nurse case managers about the dangers of opioids and teaching them to recognize red flags, such as doctors prescribing the drugs for longer periods than typically appropriate.
KEMI also used PBM data to identify frequently prescribing doctors.
“If you were treating with one of those [doctors] that might be a red flag,” Landers said.
KEMI’s concerted efforts included using its attorneys to engage in medical-fee disputes challenging claims before administrative judges when inappropriate prescribing occurred.
“We have, from early on, taken the approach that if we don’t feel it’s appropriate and we don’t get cooperation from the physician, we are going to challenge it,” Landers said.
Landers will speak at the 25th Annual National Workers’ Compensation and Disability Conference® & Expo on Dec. 1, during a presentation titled “Lessons Learned From Fighting Drug Abuse in the Opioid-Crisis Epicenter.”
The 2012 Kentucky law has limited prescription abuse. In addition to requiring prescribers to report to the state PDMP, it also regulated pain clinics.
A 2015 study prepared by the Institute of Pharmaceutical Outcomes and Policy at the University of Kentucky reported that since the law’s passage, prescribers registering with the PDMP increased by 262 percent, while annual prescriber queries into the PDMP rose 650 percent.
Prescriptions for controlled drugs decreased 4 percent to 8 percent during the same period.
Appalachia still has issues, but the situation is improving.
“I think we have more tools in the states that have been battling this [opioid epidemic] for some time,” said Cindy Whitehouse, CEO and founder of Ascential Care, a Lexington, Ky.-based managed care company. &
Think You Don’t Need Environmental Insurance?
“I don’t work with hazardous materials.”
“My industry isn’t regulated by the EPA.”
“We have an environmental health and safety team, and a response plan in place.”
“We’ve never had an environmental loss.”
“I have coverage through my other general liability and property policies.”
These are the justifications clients most often give insurers for not procuring environmental insurance. For companies outside of sectors with obvious exposure — oil and gas, manufacturing, transportation — the risk of environmental damage may appear marginal and coverage unnecessary.
“Environmental insurance is not like every other insurance,” said Mary Ann Susavidge, Chief Underwriting Officer, Environmental, XL Catlin. “The exposure is unique for every operation and claims don’t happen often, so many businesses view coverage as a discretionary purchase. But the truth is that no one is immune to environmental liability risk.”
Every business needs to be aware of their environmental exposures. To do that, they need a partner with the experience to help them identify exposures and guide them through the remediation claims process after an incident. The environmental team at XL Catlin has been underwriting these risks for 30 years.
“Insureds might not experience this type of claim every day, but our environmental team does,” said Matt O’Malley, President, North America Environmental, XL Catlin. “We’ve seen what can happen if you’re not prepared.”
Susavidge and O’Malley debunked some of the common myths behind decisions to forego environmental coverage:
Myth: My business is not subject to environmental regulations.
Reality: Other regulators and business partners will require some degree of environmental protection.
Regulatory agencies like OSHA are more diligent than ever about indoor air quality and water systems testing after several outbreaks of Legionnaires disease.
“The regulators often set the trends in environmental claims,” Susavidge said. “In the real estate area it started with testing for radon, and now there’s more concern over mold and legionella.”
Multiple hotels have been forced to shut down after testing revealed legionella in their plumbing or cooling systems. In addition to remediation costs, business interruption losses can climb quickly.
For some industries, environmental insurance acts as a critical business enabler because investors require it. Many real estate developers, for example, are moving into urban areas where their clients want to live and work, but vacant lots are scarce. Those still available may be covering up an urban landfill or a brownfield.
“We’re able to provide expertise on those sites and the development risks so the contractor can get comfortable working on it. It’s about allowing our clients to stay relevant in their markets,” O’Malley said. “In this case, the developer is not an insured with a typical environmental exposure. But if there is a contaminant on the worksite, they could inadvertently disperse it. In a high-population urban area, the impact could be large.”
Banks also quite often require the coverage specifically because developers are turning to these locations with higher potential environmental risk.
“Though it’s not a legal requirement, insurance is a facilitator to the deal that developers really can’t operate without,” Susavidge said.
Myth: The small environmental exposure I have would be covered under other polices.
Reality: Environmental losses can result from exposure to off-site events and are excluded by many property and casualty policies.
Environmental risks on adjoining properties can lead to major third party losses. Vapor intrusion under the foundation of one property, for example, can unknowingly underlie the neighboring properties as well. The vapor intrusion can then seep into the surrounding properties, endangering employees and guests.
In other words, your neighbor’s environmental exposure may become your environmental exposure.
O’Malley described a claim in which a petroleum pipeline burst, affecting properties and natural resources 10 miles downstream even though the pipeline was shut off two minutes after the rupture. The energy company that owns the pipeline might have coverage, but what about the other impacted organizations? Many other property policies exclude environmental damage.
Sometimes the exposure is even more unexpected. In 2005, for example, a train carrying tons of chlorine gas crashed into a parked train set sitting in the yard of Avondale Mills — a South Carolina textile plant. The gas permanently damaged plant equipment and forced the operation to shut down.
“It’s not always obvious when you have an environmental exposure,” Susavidge said.
“When there is a big loss or a pattern of losses, the casualty market will typically move to exclude it,” said O’Malley. “And that’s where the environmental team looks for a solution. Environmental coverage has been developed to fill the gaps that other coverages won’t touch.”
Myth: We already have a thorough response plan if there is an incident.
Reality: Properly handling an environmental event requires experience and expertise.
In addition to coverage, risk managers need experience and expertise on their side when navigating environmental claims.
“For many of our clients, their first environmental claim is a very different experience because the claimant is not always a typical third party – it’s a government agency or some other organization that they lack experience with,” Susavidge said. “Our claims team is made up of attorneys that have specific domain experience litigating environmental claims issues.”
Beyond its legal staff, XL Catlin’s claims consulting team and risk engineers come with specialized expertise in environmental issues. 85 to 90 percent of the team members are former environmental engineers and scientists, civil engineers, chemists, and geologists.
“Handling environmental claims requires specialized expertise with contaminants and different types of pollution events,” O’Malley said. “That’s why our 30 years of experience makes a difference.”
Thirty years in the business also means 30 years of loss data.
“That informs us as a carrier how to provide the right types of services for the right clients,” Susavidge said. “It gives us insight into what our insureds are likely to experience and help us determine what support they need.”
Insureds also benefit from the relationships that XL Catlin has built in the industry over those 30 years. When the XL Catlin team is engaged following a covered pollution event, the XL Catlin claims team can deploy seasoned, experienced third party contractors that partner with the insured to address the spill and the potential reputational risk. And they receive guidance on communicating with regulatory bodies and following proper reporting procedures.
“The value of the policy goes beyond the words that are written,” O’Malley said. “It’s the service we provide to help clients get back on their feet, so they can focus on their business rather than the event itself.”
For more information on XL Catlin’s environmental coverage and services, visit http://xlcatlin.com/insurance/insurance-coverage/casualty-insurance.
The information contained herein is intended for informational purposes only. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy forms for specific coverage details. XL Catlin, the XL Catlin logo and Make Your World Go are trademarks of XL Group Ltd companies. XL Catlin is the global brand used by XL Group Ltd’s (re)insurance subsidiaries. In the US, the insurance companies of XL Group Ltd are: Catlin Indemnity Company, Catlin Insurance Company, Inc., Catlin Specialty Insurance Company, Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., and XL Specialty Insurance Company. Not all of the insurers do business in all jurisdictions nor is coverage available in all jurisdictions. Information accurate as of September 2016.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with XL Catlin. The editorial staff of Risk & Insurance had no role in its preparation.