BY KATIE SIEGEL
"If the industry and individual companies within the insurance and reinsurance industry do not meet this challenge head on ... we will almost certainly see the bankruptcy of several workers' comp insurers over the next decade."
Such is the grim prognosis delivered by CompPharma's 10th Annual Survey of Prescription Drug Management in Workers' Compensation. Though respondents reported an overall 3.9 percent decrease in drug costs, they still considered it a major concern with the potential to grow more serious over the next year or two.
A group of decision makers and operations staff at 23 carriers and TPAs participated in the survey. Respondents' 2012 drug expenses ranged from $1.7 million to $168 million, with a total pharmacy expenditure of $698 million. For comparison, 2010 total pharmacy expenses for workers' compensation totaled $30 billion.
Opioid utilization and physician dispensing are driving that concern as realization of their long term clinical and financial impact supersedes the issue of pharmacy cost control. On a scale of one to five, with five representing a very significant medical cost issue, respondents gave the prevalence of opioids in workers' comp a 4.8.
"There's a high risk of addiction for patients taking long-acting opioids (LAO) for more than six months. It's very unlikely they will go back to work," said CompPharma President Joe Paduda. "You can't just look at drug costs, because opioids drive claim costs."
Drug spend may be under control, but drug use remains dangerously high, and "that has serious implications," he said.
Some payers have responded by instituting "opioid alerts" to notify adjusters when LAO have been dispensed, certain morphine equivalent levels have been surpassed, or treatment is taking longer than expected.
Nearly all of the survey respondents (91 percent) also increased efforts to identify high-risk claimants. However, factors that influence opioid addiction -- like the patient's mental health, family history and strength of social support networks ? can be hard to discover and are beyond any adjuster's control.
Many survey respondents are taking a tougher line with doctors, specifically addressing those with "problematic" prescribing patterns and requiring compliance with urine drug monitoring guidelines. Nearly nine in 10 (87 percent) of the respondents reportedly offer their own drug testing program or plan to over the next year, while the remainder "advocate" it.
Physician dispensing ranked a close second on payers' list of top concerns. The practice drives much narcotic utilization and "accounted for over 35 percent of drug costs in 2012," according to survey results.
Though these steps seem positive, the survey's small sample size could be forecasting a sunnier outlook than is realistic.
"I think it's a little bit of a skewed sample," said Michael Gavin, president of PRIUM, a workers' compensation-focused medical management company. "The people willing to participate in the survey are the ones who are really being proactive. I think if you looked at the other 80 percent of the market, you would find they're lagging behind."
A study by the Workers Compensation Research Institute, The Prevalence and Costs of Physician-Dispensed Drugs, revealed that most of the 24 states in the study allowed physicians to dispense drugs directly from their office, but many are introducing reimbursement reforms to bring prices for these drugs down to the same levels charged by local pharmacies.
While this has helped stabilize costs, it hasn't stemmed the flow of physician dispensing, which grew rapidly in several states, according to the study. Only six states have sought to ban or strictly limit the practice.
"Most of the reforms are eliminating the economic incentive for physicians to dispense while still allowing the practice," Gavin said. "But the caps are still sufficiently high enough for doctors to make money engaged in the practice."
Reforms may also be too little too late to aid the clinical management of already-addicted injured workers.
"These are highly addictive and dangerous drugs," Paduda said. "Doctors were dispensing them to make money. What happened to the patients who were cut off cold turkey" in states where dispensing is banned or severely limited?
With direct access to powerful painkillers cut off, he said, claimants may turn to street drugs for the same effects, leading to further health issues, more time away from work, and greater costs.
Lack of attention to the problem may be due to the fact that growth in opioid use is relatively recent, and the full impact has yet to be seen in historical data.
"I think there will be a watershed moment when executives in the workers' comp industry finally understand the financial impact of opioids. At that point, it will become the single biggest issue in their company," Paduda said.
Gavin said he is "seeing a commitment now to make real changes, whereas three or four years ago there wasn't that commitment. "But I'm still concerned that even what we're doing now won't be enough to address the absolute wave of clinical and financial impact that will come in the future as a result of today's opioid use."
KATIE SIEGEL is a staff writer at Risk & Insurance®. She can be reached at email@example.com.
September 18, 2013
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