California: Researchers make pitch for payer access to monitoring program

California's workers' comp system could see savings of $57.2 million by allowing third-party payer access to its prescription drug monitoring program, suggests a new report.

Analysts from the California Workers' Compensation Institute say continuing the program could bring about a return on investment of $15.50:$1.

The CWCI study comes as the state's Controlled Substance Utilization Review and Evaluation System is in jeopardy of closing down if funding for its annual $3.7 million price tag cannot be found by July. CURES is an electronic program that allows doctors, pharmacists, and law enforcement agencies to track the prescription history of patients receiving opioids.

Session track devoted to opioid crisis (05/31/12)
Survey compares marijuana laws in state workers' comp systems (01/14/13)
Insurance legislators to focus on physician dispensing repackaged drugs (02/13/12)
Texas: Closed formulary results in fewer opioid scripts in WC (07/26/12)
Ohio formulary cuts $2.1 million in narcotics costs (11/01/12)

"Among the factors contributing to the rapid escalation in the use of Schedule II opioids in the California workers' compensation system are the structural limitations of the medical cost controls," the study says. "Some California workers' compensation stakeholders have suggested that enabling third party payer access to CURES would improve quality of care, utilization and cost controls and assist employer and payer efforts to more effectively address prescription drug fraud and abuse," the study says.

The California workers' comp system lacks the supply-and-demand-side controls present in federal programs and most group health plans, the authors explain. The absence of copayments, deductibles, closed formularies, and limited generic substitution inhibit third-party payers' ability to effectively manage pharmaceutical costs.

The researchers analyzed workers' comp pharmacy data for accident year 2011 to estimate the volume of workers' comp claims in which opioids are prescribed, the level of opioid use for these claims, and the estimated savings that could be generated by integrating third-party payer access to the CURES database.

"CWCI has estimated that almost half of all claims with Schedule II opioids fall outside the pain management medication recommendations included in the evidence-based medical literature," the study says. "Many workers' compensation payers, as well as other stakeholders, believe that access to the CURES system, coupled with enhanced medical cost containment strategies including medical provider networks monitoring and utilization review could significantly reduce the average number of prescriptions and the average dose levels of workers' compensation claims that utilize opioids."

The researchers analyzed data and estimated 23 percent of the 500,000 California job injury claims in AY 2011 involved opioid prescriptions. They categorized them based on the number of prescriptions that had been dispensed in the first two years, and applied a cost-reduction savings factor against the average medical and indemnity benefit payments per claim.

They determined that no cost savings would be generated for claims with only one opioid prescription. However, they said allowing third-party payer access to CURES and other enhanced opioid management controls would result in:

A 3 percent reduction in total benefits paid on claims with two to three opioid prescriptions.
A 5 percent reduction in payments on claims with four to seven opioid prescriptions.
A 7 percent reduction in payments on claims with more than seven opioid prescriptions. "Under this scenario, the total estimated cost savings on AY 2011 claims is $57.2 million," the authors said.

The study was released as debate over funding for CURES continues in the state Legislature. Recently, two state lawmakers said they plan to introduce bills to improve the CURES database and require that authorities use it to identify inappropriate prescribing and dispensing. Two other lawmakers said they will support legislation to increase California Medical Board oversight of physicians dispensing narcotics.

Read more at the WorkersComp Forum homepage.

March 4, 2013

Newsletter Sign-up