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Pharmacy. "One of the major themes is going to be a more concerted effort by the industry to curtail the growing problem associated with prescription drugs," predicted John Leonard, president and CEO of MEMIC. "That's front and center for 2013."

Leonard pointed to recent data from NCCI showing that 19 percent of the workers' comp medical tab is from pharmaceuticals. He says it is growing exponentially for a number of reasons.

The medications at the top of the list for abuse and misuse in the workers' comp system are opioids, the experts say. Employers are increasingly faced with challenges from injured workers on opioids.

"It's probably the biggest thing for me," said Jill Dulich, senior director of Marriott Claims Services in Los Angeles. "We are very pleased to see that some states such as Washington and Texas are making some pretty dramatic changes to try to control opioid distribution in workers' comp, and I think on a national level we need to have more uniform focus on this ... we're killing injured workers daily. It needs to stop."

Dulich says tracking opioid use among injured workers is key. Without that, someone from California, for example, could go to Arizona to get opioids because each state doesn't know what the other is doing.

"The states need to get together," she said. "They need some kind of mimic as to how they track pharmaceuticals in any kind of a national health care program such as group health or Medicare -- simply a pharmacy tracking. Everybody needs to get their arms around the opioid abuse situation."

Some workers' comp payers are beginning to address the opioid crisis while others are refusing to deal with it. Many don't yet see it as a major problem.

"For payers with a lot of legacy claims, some will put their heads in the sand while others will do the research and figure out how much of a disaster they have coming upon them," said Joe Paduda, principal of Health Strategy Associates and author of the ManagedCareMatters blog. "Others, without a lot of legacy claims, will be in two groups; one will say, 'I don't want a problem,' so will get assertive on the front end, and the other group will say, 'it's not a big problem so not a big deal.' Those are the four buckets I see forming right now."

The opioid issue stems from the desire to address pain, especially chronic pain. The experts say it's just gotten out of hand.

"It's this insatiable appetite to relieve everyone's pain," Leonard said. "While one can certainly understand that as a human being, there is a cost associated -- not only a dollar cost. It becomes addictive or, if not, at least dependent, and it's not necessarily in the best interest of the patient who is undergoing this treatment."

Injured workers and the physicians treating them need to better understand how to manage pain. "They need to figure out when a medication becomes ineffective and what do you do when that happens," said Mark Noonan, managing principal of casualty practice at Integro Insurance Brokers. "The simple answer is you stop. Find another way to deal with the situation -- physical therapy or alternative pain management programs, biofeedback, whatever -- rather than say, 'we're just going to double your dose.'"

Physician dispensing. Opioids are not the only medical-related issue on the minds of the workers' comp experts. Physician dispensing of repackaged drugs comes in a close second.

"It drives up costs and limits controls that can protect the injured worker," Noonan said. "A lot of physicians are repackaging because they make more money than on a comp claim."

Many state regulators are concerned about physicians dispensing medications in the workers' comp system. However, more than 30 states have no regulations on the practice.

"I think physician dispensing is an issue where the states that have tackled it successfully -- Georgia, Illinois, and Michigan -- are approaching it not from the perspective of eliminating it across the board, that wasn't their goal," said Jennifer Wolf Horejsh, executive director of the International Association of Industrial Accident Boards and Commissions. "The goal was to really ensure these physician-dispensed drugs were not being charged at much higher premiums. Injured workers still have access when it is appropriate."

States that may focus on physician dispensing this year include Maryland, Hawaii, and Florida. An attempt to pass legislation in Florida failed in the 2012 session.

"There is no question the legislature will try again," Paduda said. "There is also no question that the dispensing industry, which had a very bad year in 2012 will redouble their effort to keep Florida the money tree it's become for them."

Paduda anticipates seeing millions of dollars in campaign contributions, as states debating the issue become major battlegrounds.

"The financial wherewithal of the dispensing industry is really tough to overcome," Paduda said. "In addition, the opponents to dispensing have not done a good job of describing what exactly the issue is and clarifying for legislators the risks and costs of physician dispensing. We're getting a lot better, but the physician dispensing industry has definitely out-messaged us over the last couple of years."

Comorbidities. "One of the biggest problems [in workers' comp] is the tail; managing it, predicting and anticipating adverse developments in claims," said Denise Gillen-Algire, RN principal and practice leader of Integrated Health and Productivity at Risk Navigation Group. "One of the biggest impacts is the challenge with obesity."

The growth of overweight and obesity in the U.S. compounds and complicates workers' comp claims. "There is no question that somebody in that condition is more prone to injury and certainly slower to recover," Leonard said. "You can almost predict what the outcome is going to be based on lifestyle and other factors related to the individual as a person beside the injury."

As Leonard explained, an injured worker who is overweight, smokes, and has other comorbid conditions is more likely to recover slower and stay off the job longer. He says employers must begin to target better health among their workforces.

"Even within our company we have an aggressive program to maintain our employees' health," he said. "If you don't start there, it's hard to go outside and encourage our customer base."

Employers can encourage their employees to develop healthier habits through incentives. As Gillen-Algire said, employees are beginning to see ways they can pay less out-of-pocket for health benefits than their less healthy colleagues. Employees should also have access to wellness programs.

"This is not a quick return; it's a long-term investment strategy," she said. Just because you incentivize people to behave healthier doesn't mean by next year there will be a significantly lower obesity rate. It takes time. But I do see a movement in terms of what employers are doing.

In addition to medical comorbidities are other complicating factors. Mental health-related issues are among them.

"We're seeing a lot of psychosocial issues coming down the road," Dulich said. "We just seem to see a lot more roadblocks to recovery."

Another factor impacting claims is the aging of the workforce. Specifically, older workers who have been out of work but have returned for economic reasons.

"There's been a misunderstanding that older people are less inclined to suffer an injury. That's been changed," Leonard said. "It's not necessarily a relationship between older and younger, but a relationship of how long have you been on the job."

A recent study by NCCI indicated that older workers who are new on the job are just as likely to be injured as their younger counterpart who are also new.

"It used to be if you had a guy who is 40 and a guy who is 20, the 40-year-old would be less inclined to be injured," Leonard said. "Now, the real way to measure the propensity [for injury] is the amount of time a person has been on the job. A person on the job for one year is more inclined to suffer an injury than someone who has been on the job 10 years."

Medical costs. The comorbidities and other factors that complicate a claim are driving medical costs, which are the main driver of workers' comp costs.

"If that's not getting the focus of every risk manager out there, it should be," said Mark Walls, vice president of claims for Safety National and founder of the Work Comp Analysis group on Linked-
In. "There is way too much money being spent on unnecessary procedures and on things that are not related to the workplace injury that are being pushed under workers' comp."

As Walls said, costs in the workers' comp system are higher than they are in group health. "The surgical rates are higher under workers' comp, there's more physical therapy, longer durations of disability, and more diagnostic tests. Frankly, that should not be the case," Walls said. "It shouldn't matter if it's a workers' comp claim or personal injury. A rotator cuff tear should be a rotator cuff tear, and there should be protocols that are fairly universally followed."

Walls and others believe the answer to out-of-control medical spending in the workers' comp system lies in the widespread adoption of treatment protocols.

Read more at the WorkersComp Forum homepage.

February 25, 2013

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