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. &
Using Data to Get Through Hail and Back
4,600 hailstorms have rained down on the U.S. as of the end of July according to the National Oceanic and Atmospheric Administration. And these storms have left damage behind, cracking unprotected skylights, damaging exterior siding, dimpling rooftops and destroying HVAC systems.
While storm frequency is almost on par with last year’s 5,400, the rest of the picture isn’t quite the same. For example, the hail zone seems to be shifting south. San Antonio, Texas, a “moderate” hazard hail zone area, typically sees four or five hail storms a year, on average. Year to date, more than 30 storms have been reported. Overall, Texas has suffered nearly 20 percent of all hail storms this year.
Liberty Mutual’s Ralph Tiede discusses the risk hail poses to large commercial property owners.
The resulting damage is different too, with air conditioning (AC) units accounting for more than a third of the insurance industry’s losses, a greater proportion than in previous years. “In some cases, we’ve seen properties that sustained no roof damage but had heavily damaged AC systems. This may be a result of smaller hail stone size coupled with high winds,” noted Ralph Tiede, Vice President of Commercial Insurance and Manager of Property Risk Engineering at Liberty Mutual.
Despite the shifting trends, however, these losses are largely preventable if commercial property owners understand their exposures and take steps to mitigate them. By partnering with the right insurer, a company can gain access to the industry-leading resources and expertise to make it happen.
Understanding the Risk through Data
A property owner might know that his property is located in an area prone to hail, but could underestimate the extent of damage a storm could cause. Exposed skylights, solar panels, satellite dishes and other roof-mounted equipment can translate to serious losses.
Three trends that have emerged this hail season.
This is where Liberty Mutual’s property loss control engineers offer critical guidance for customers with large property exposures.
“Our property loss control engineers go out and inspect locations to develop loss estimates,” said Tiede. “They’re looking at the age and condition of the roof, the material it’s made of, and whether equipment is exposed or if there are adequate safeguards in place.”
Liberty Mutual can combine this detail with the hail data it has collected for more than 14 years and use this extensive library to help customers understand their exposures. The company’s proprietary hail tool looks at customer-specific factors, such as roof type, age, condition and geocodes, to better identify potential losses from hail. The tool provides a more detailed view of hail exposure on a micro level, as opposed to more traditional macro views based on zip codes.
“This way, we’re not just looking at a location’s exposure, we’re looking at an account’s cumulative hail exposure and providing a better understanding of where the risk is concentrated,” Tiede said.
Having a good understanding of a company’s specific exposure helps the broker, buyer, and insurer develop an effective insurance program. “Two customers may be in the same area, but if one’s building has a hail resistant roof, protected skylights, and hail guards for HVAC equipment and the other’s has unprotected sky lights and no hail guards or screens on rooftop equipment, they are going to have different levels of exposure. In both scenarios, we can design an insurance program that fits the customer’s situation and helps control the total cost of property risk,” said Brent Chambers, Underwriting Consultant for National Insurance Property at Liberty Mutual.
A Liberty Mutual property loss control engineer consults with the customer on ways to reduce or mitigate the exposure from hail so that the customer can make an informed decision as to where to deploy capital. “It’s not just about protecting a building’s roof and rooftop equipment. Roof damage can lead to extensive water damage inside a building and in some cases disrupt service, both of which can be costly for a business. By focusing on locations with the most exposure, a risk manager is better able to mitigate future losses,” said Tiede.
Actions commercial property owners can take to mitigate the risk of hail-related damage.
Liberty Mutual property loss control engineers also provide recommendations specific to each location. “We know that hail guards work, so we encourage clients to use those to protect HVAC equipment,” said Ronnie Smith, Senior Account Engineer for National Insurance Property at Liberty Mutual. “Condenser coils in air conditioning systems are fragile and easily damaged, and units don’t necessarily come with built-in protection. It’s important for property owners to take this step proactively to prevent a loss.”
The average cost to fix a condenser coil is $500, but replacing a coil can run at least $500 per ton of cooling, a measurement of air conditioning capacity that refers to the amount of heat needed to melt a ton of ice over a 24-hour period. As one ton of cooling typically covers about 250 square feet of interior space, replacement costs can quickly add up.
Replacing an entire AC unit can run more than $1,000 per ton of cooling. In a 250,000 square foot property, the replacement could easily reach $1 million. Given the increase in hail-related AC damage this year, these are numbers worth knowing.
Other risk mitigation recommendations include regular roof maintenance, such as inspections and repairs to small damages like blisters and installing protective screens over skylights.
“If a roof needs replacing, we also suggest using materials that have been tested and approved by an independent certification laboratory and are durable enough to fit the location’s exposures,” Tiede said. “The last thing a commercial property owner wants is to replace a roof again six months after it’s installed. Experience has shown that ballasted-type roofs are the most resistant to hail damage.”
Using Data to Develop Solutions
When a property owner has an understanding of the size of its exposure and potential losses, it is better able to work with its agent or broker and insurer to develop an insurance program to manage and mitigate potential risks.
“The data and advice we provide help clients focus on the largest risks and better mitigate that exposure,” Smith said. “The more data you have, the more you can understand your risk on a granular level and manage it.”
This data-driven approach to preparedness makes Liberty particularly well-suited to serve large commercial properties with multiple locations in high risk areas.
Prices for roof and air conditioning repairs and replacements have risen over last year, Tiede said, and are likely to grow more expensive as older equipment becomes obsolete. Property owners will be forced to buy newer, pricier replacements than perhaps they had originally planned for.
And if this year’s storm trends are any indication, hail is sometimes an unpredictable foe.
Amidst these shifting trends, the value of an insurer’s expertise in identifying, mitigating and managing hail exposure will be immeasurable to large commercial property owners.
For more information about Liberty Mutual’s commercial property coverage, visit https://business.libertymutualgroup.com/business-insurance.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.