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Risk Insider: Debbie Michel

Where’s Your Bottle of Painkillers?

By: | August 18, 2014 • 2 min read
Debbie Michel is president of Helmsman Management Services, the wholly owned third party administrator of Liberty Mutual Insurance. She can be reached at

Medical care providers inconsistently prescribe powerful – and highly addictive – narcotic painkillers across the country, according to a recent study by the federal Centers for Disease Control and Prevention (CDC) and data from Liberty Mutual Insurance.

This variation needlessly endangers patients, drives up workers compensation costs and may not provide a healing benefit to injured workers.

This is largely a problem that shouldn’t exist, since the American College of Occupational and Environmental Medicine (ACOEM) “Guidelines for the Chronic Use of Opioids” provide clear best medical practices for prescribing powerful narcotic painkillers — and advise that they be used only for select patients.

And yet the recent CDC study found tremendous variability in the rates of narcotic prescriptions between states.

For example, in 2012, health care providers in Tennessee wrote 143 pain killer prescriptions per 100 people, while doctors in California issued 57 prescriptions per 100 people.

Shockingly, health care providers across the U.S. wrote 259 million prescriptions for painkillers in 2012, enough for every adult American to have a bottle, according to the study.

A Liberty Mutual study published in 2009 found similar interstate variation in opioid prescriptions for acute work-related lower back pain.  In fact, almost eight times as many opioid prescriptions were written in South Carolina for acute lower back pain than in Massachusetts during the study’s time frame.

The problem is clear. So is the solution.

Here are four steps every risk manager should take to help protect injured employees and the bottom line:

Get informed — Understand if the states where your company operates have high rates of opioid prescribing, and to what extent the workers compensation systems in those states require treating physicians follow the ACOEM guidelines.

Providers treating injured workers in some states are mandated to follow these guidelines, while they are mere suggestions in other states.

Get involved — Help your regulators and legislators understand the problems associated with narcotic over prescription, for both individuals and employers.

Work with them to appreciate the value of evidence-based medicine, such as the ACOEM guidelines.

•  Use the right medical care provider — Having the injured worker treated by a provider experienced in occupational injuries will usually help the worker recover sooner and make the use of narcotics much less likely.

Even in states where employers cannot direct the care of injured workers, they can help employees understand the potential dangers of powerful narcotic pain killers.

Spot problems early — Closely monitor claims. Use specialized resources to quickly identify the inappropriate use of narcotics and the early warning signs of potential abuse, such as use of multiple pharmacies or physicians, depression and addictive behaviors.

While not everyone has a bottle of painkillers, some have several.   And it may be costing those individuals — and their employers — dearly. Get involved to help end this tremendous human and financial waste.

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Pot and Policy

Practitioners Consider Practical Applications of Medical Marijuana

Some evidence indicates medical marijuana may be useful to treat pain, but the workers’ comp system is not yet equipped to handle the issue on a large-scale basis.
By: | August 1, 2014 • 4 min read
med marijuana3

While attorneys weigh the reasons for the recent New Mexico ruling on medical marijuana, others are looking at the possible practical implications. One, for example, is whether the decision will spur more recommendations for medical marijuana.


“There is a growing body of medical evidence that marijuana can be useful for pain treatment,” said Jim Andrews, executive vice president of pharmacy services for Healthcare Solutions. “However, additional studies are needed that include larger patient populations and longer utilization periods prior to inclusion in any medical treatment guidelines.”

In the near term, Andrews does not believe there will be a significant increase in the use of marijuana to treat pain among injured workers.

“The medical community still doesn’t feel there is enough evidence to support widespread use of medical marijuana,” Andrews said. “Even in states like Colorado, physician groups still have reservations.”

As one of two states that allow marijuana beyond medicinal purposes, Colorado has become a focal point for the issue, especially among workers’ comp plaintiffs’ attorneys.

“Although medical and recreational use of marijuana is allowed in Colorado, I have not personally seen any of our authorized treating physicians recommending its medical use,” said Colorado attorney Ronda K. Cordova of Ritsema & Lyon PC. “In fact the physicians seem to be questioning the effectiveness to address the chronic pain complaints of our injured workers.”

Workers’ comp bloggers commenting on the issue likewise are unconvinced we’ll see a major uptick of medical marijuana in the workers’ comp system. They say the science just isn’t there yet.

“Yes, there is some evidence that in relatively small populations medical marijuana has been beneficial,” wrote Joseph Paduda, principal of Health Strategy Associates and author of the ManagedCareMatters blog. “However, they aren’t large enough, nor objective enough, to provide convincing proof.”

Even if some evidence indicates medical marijuana may be useful to treat pain, the workers’ comp system is not yet equipped to handle the issue on a large-scale basis. “Most states are moving toward medical evidence based guidelines, and most out there today have no mention of the use and appropriate use and role of medical marijuana in treating injured workers,” Andrews said. “So you’re at an impasse doing utilization review. Where you are looking for something as a body of reference, there is none.”

Cost Considerations

While the use of medical marijuana may not become widespread in the near term, some workers’ comp practitioners are nevertheless concerned about paying for those injured workers who do qualify. In the New Mexico case, the ruling specifically said the employer/insurer was required to reimburse for the drug rather than paying for it outright.


But determining the cost is a tricky business. The claimant’s attorney in the New Mexico case is trying to figure the amount owed to the injured worker.

“He still has not been reimbursed,” said attorney Peter D. White. “We are putting together his bills and getting affidavits from two providers/dispensaries so he can get reimbursed. Since [the marijuana] was ordered prior to the appeal, that’s what we are seeking.”

As White explained, marijuana is not included among the medications and services on the maximum allowable payment schedule in New Mexico. Typically, those are reimbursed at the rate paid by the worker unless something has been negotiated. “It isdefinitely time to consider negotiating rates with the dispensaries in New Mexico.”

As an executive of a pharmacy benefit manager, Andrews does not believe PBMs are equipped today to do such negotiations. “Pharmacy reimbursement is based on average wholesale prices as reported by nationally recognized compendia and not negotiations,” he explained.

There is also the issue of pricing the amount of marijuana. Some marijuana cigarettes are larger and contain more of the drug than others.

“Manufacturing standards need to be put in place consistent with drugs that are approved by the FDA today,” said Andrews.

If use of medical marijuana becomes more widely accepted by the medical community, Andrews and other workers’ comp practitioners hope that proper controls are put in place to effectively manage the distribution system. He compares the lack of regulation for medical marijuana to the situation the industry experienced with compound drugs several years ago.

“When utilization of compound drugs became more prevalent, there were not sufficient controls governing the manufacturing of these drugs. Then a manufacturing company in Massachusetts was found to be sending out contaminated materials,” Andrews said. “Do we really need a crisis before you take a step back and put a process in place? I don’t think everybody has thought this all through.”


In order to protect the safety of injured workers, Andrews says he will advocate for oversight of medical marijuana dispensaries by the Food and Drug Administration.

“We want to avoid having a crisis due to lack of process,” he said. “An infrastructure needs to be built if adoption of medical marijuana grows.”

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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Sponsored: Healthesystems

The Next Wave of Workers’ Comp Medical Cost Savings

Reducing WC claims costs in one area often inflates them in another.
By: | August 4, 2014 • 6 min read

Managing medical costs for workers’ compensation claims is like pushing on a balloon. As you effectively manage expenses in one area, there are bound to be bulges in another.

Over the last decade, great strides have been made in managing many aspects of workers’ compensation medical costs. Case management, bill review and pharmacy benefits management are just a few categories that produce significant returns.

And yet, according to the National Council on Compensation Insurance (NCCI), medical costs remain the largest percentage of workers’ comp expenses. Worse still, medical costs continue to be the fastest growing expense category.

Many medical services are closely managed through provider negotiations, bill review, utilization review, pharmacy benefits management, to name a few. But a large opportunity for medical cost containment remains largely untouched and therefore represents a significant opportunity for cost savings.

Ancillary medical services is a term used to describe specialty or supplemental health care services such as medical supplies, home health care, durable medical equipment, transportation and physical therapy, etc.

According to Clifford James, Vice President of Strategic Development at Healthesystems in Tampa, Fla., modernizing the process for managing ancillary medical services presents compelling opportunities for cost savings and improved patient care.

Source: 2014 Healthesystems Ancillary Medical Services Survey

“The challenge of managing these types of medical products and services is a cumbersome and extremely disconnected process,” James said. “As a result, it represents a missing link in an overall medical cost management strategy, which means it is costing payers money and patients the most optimal care.”

James singled out three key hurdles:

Lack of transparency

As the adage goes, you can only manage what you can measure.

Yet when it comes to the broad range of products and services that comprise ancillary benefits, comprehensive data and benchmarking metrics by which to gauge success are hard to come by.

The problem begins with an antiquated approach to coding medical services that was developed in the 1970s. The coding system falls short in today’s modern health care environment due to its lack of product and service level detail such as consistent units of measure, quantity and descriptors.

As a result, a meaningful percentage of ancillary benefits spending is coded as “miscellaneous,” which means a payer has little to no visibility into what product or service is being delivered — and no way to determine if the correct price is being applied or if the item is even necessary or appropriate.

Source: 2014 Healthesystems Ancillary Medical Services Survey

“It’s a big challenge. Especially when you consider that for many payers, it’s difficult to determine exactly what they are spending, or identify what the major cost drivers are when it comes to ancillary services,” James said. And when frequently over 20 percent of these types of services are billed as miscellaneous, payers have zero visibility to effectively manage these costs.

Measurement and monitoring

Often, performance that is monitored is given the most attention. Therefore, ancillary programs that are closely monitored and measured against objective benchmarks should be the most successful.

However, benchmarks are hard to determine because multiple vendors are frequently involved using disparate data and processes. There isn’t a consistent focus on continuous quality improvement, because each vendor operates off of their own success criteria.

“Leveraging objective competitive comparisons breeds success in any industry. Yet for ancillary services there is very limited data to clearly measure performance across all vendors,” James said. “And for payers, this is a major area of opportunity to promote service and cost containment excellence.”

Source: 2014 Healthesystems Ancillary Medical Services Survey


If you ask claims executives about their strategies for improving the claims management process, a likely response may be “workload optimization.” The goal for some is to enable claims professionals to handle a maximum case load by minimizing administrative duties so they can leverage their expertise to better manage the outcome of each case.

But the path towards “workload optimization” has many hurdles, especially when you consider what needs to be coordinated and the manual way it frequently is done.

Ancillary benefits are a prime example. For a single case, a claims professional might need to coordinate durable medical equipment, secure translation services, arrange for transportation and confirm the best physical therapy plan. Unfortunately they often don’t have the needed time, or the pertinent information, in order to make quick, yet informed, decisions about the ancillary needs of their claimants.

In addition there is the complexity of managing multiple vendor relationships, juggling various contacts, and accessing multiple platforms and/or making endless phone calls.

SponsoredContent_HES“We’ve been called the ‘industry integrator’ by some people, and that’s accurate. We are delivering a proven platform connecting payers with providers and vendors on the ancillary medical benefit front. It’s never been done before.”
– Clifford James, Vice President of Strategic Development, Healthesystems

Modernizing the process

To the benefit of both payers and vendors, Healthesystems offers Ancillary Benefits Management (ABM).

The breakthrough ABM solution consists of three foundational components — a technological platform, proprietary medical coding system and a comprehensive benefits management methodology.

The technological platform integrates payers and vendors with a standardized architecture and processes. Business rules and edits can be easily managed and applied across all contracted vendors. All processes – from referral to billing and payment – are managed on a single platform, empowering the payer with a centralized tool for managing the quality of all ancillary providers.

But when it comes to ancillary products, the critical and unique challenge Healthesystems had to solve is the antiquated coding system. This was completed by developing a highly granular, product-specific coding system including detailed descriptions and units of measure for all products and services. This coding provides payers with the clearest understanding of all products and services delivered including pricing and all the necessary utilization metrics.

“We bring the highest level of transparency and visibility into all ancillary products and services,” James said, adding that the ABM platform uses an extensive preferred product coding system 15 times more detailed than any other existing system or program.

This combination of sophisticated technology, proprietary coding system and benefit management methodology revolutionizes the ancillary category. Some of the benefits include:

  • Crystal-clear transparency
  • A more detailed and comprehensive view into ancillary products and services
  • An automated process that eliminates billing discrepancies or resubmittals
  • Integrated and consistent processes
  • Strategic program management

Taken together, the system leapfrogs over the existing hurdles while creating entirely new opportunities. It’s a win for vendors and payers, and ultimately for patients, who receive the optimal product or service.

“We’ve been called the ‘industry integrator’ by some people, and that’s accurate,” James said. “We are delivering a proven platform connecting payers with providers and vendors on the ancillary medical benefit front. It’s never been done before.”

To learn more about the Healthesystems Ancillary Benefits Management solution visit:

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

Healthesystems is a leading provider of Pharmacy Benefit Management (PBM) & Ancillary Benefits Management programs for the workers' compensation industry.
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