Drug compounding’s continuing problems

According to the NYTimes, the FDA’s ongoing investigation into compounding pharmacies:

“found numerous unsafe practices at about 30 compounding pharmacies, the same type of facility responsible for the tainted drug that caused a deadly meningitis outbreak last year.

Among the problems found were unidentified black particles floating in vials of supposedly sterile medicines, rust and mold in clean rooms where such drugs are made, improper air flow, and clothing that left workers’ skin exposed.” [emphasis added]

If they aren’t, workers’ comp payers and medical management firms should be paying very close attention to these inspections.  There are three problems with compounds – they tend to be very costly, there is zero evidence that they help the healing process, and there is a wealth of evidence (see above) that compounds can be very dangerous – if not lethal.

Workers’ comp claimants harmed by compounds will incur expenses to address that harm – expense that will have to be covered by the workers’ comp payer.

The payer may also have to provide death benefits for claimants killed by compounds.

States that currently have a compounding problem are likely to see it grow – as it has in California.  States enjoying a compound-free experience are almost certain to be targeted by compounders and their enablers.

The list of FDA-inspected compounders is here.


“Disability” is increasing…why?

Are we suffering traumatic injuries from falling trees, collapsing scaffolds, dangerous industrial machines?

Is it because so many of us work at jobs requiring intense physical labor, and we are working long hours long past middle age?  Conversely, is it the very sedentary nature of many jobs that saps energy and wastes muscle?

Could it be we are just living longer than we ever have, and our bodies, programmed by evolution to live long enough to procreate, just aren’t built to stay strong, flexible, and resilient for decades?

Or are we way too fat, get far too little exercise, eat lousy food, and blame everyone but ourselves for the consequences?

Is it the continuing high unemployment rate and dearth of good-paying jobs?

And/Or – and here’s the scary thought – is it the definition of “disabled” that’s changed – both the public one and the way some view themselves?

This is becoming an increasingly critical question – as the number of Americans on Social Security for “disability” has increased rather dramatically – doubling from 1985 to 2005. In 1984 2.2% of the working-age population was receiving Social Security Disability Insurance (SSDI); 4.1% was in 2005.  This increase was, according to a paper published by the National Bureau of Economic Research, driven by a change in the definition of disability:

The most important factor is the liberalization of the DI screening process that occurred due to a 1984 law. This law directed the Social Security Administration to place more weight on ap-plicants’ reported pain and discomfort, relax its screening of mental illness, consider applicants with multiple non-severe ailments, and give more credence to medical evidence provided by the applicant’s doctor.

These changes had the effect of both increasing the number of new DI awards and shifting their composition towards claimants with low-mortality disorders. For example, the share of awards for a primary impairment of mental illness rose from 16 percent in 1983 to 25 percent in 2003, while the share for a primary impairment of musculoskeletal disorders (primarily back pain) rose from 13 per-cent in 1983 to 26 percent in 2003.

The number of working-age folks receiving SSDI reached 8.8 million at the end of last year.  That’s about 4.4 percent of the working age (18-64) population, an increase of 0.3 percent over the last seven years.

There’s been an increasing amount of attention paid to this issue; that’s both warranted and appropriate.

Yet I’m reminded of something Jennifer Christian MD told me years ago; “there’s no condition so disabling that there isn’t someone in the US with that condition working full time today.”

So, what is it?

My sense is it is all of the above. Some are really hurting or unable to work at jobs they can perform, others lazy, some dispirited, some enabled by physicians, many just getting older and wearing down, many unable to find good-paying jobs.

What does this mean for you?

Big, knotty problems aren’t fixed by simple answers or assignment of blame.  They are fixed by understanding drivers and the various moving parts needed to assemble solutions. 



Medicaid expansion – waiting for the alternatives

Lost in the political arguments over whether or not to accept federal dollars to expand Medicaid is a rather basic question – what happens if you don’t expand Medicaid?

This is especially important in states such as Florida and Texas, Louisiana and New Mexico, states where over a quarter of the working-age population don’t have health insurance.

If these states don’t expand Medicaid, those people will remain uninsured, safety-net providers will not be able to provide care for them, and hospitals’ financials will deteriorate, some drastically.

In Texas, Louisiana, and Florida, there’s little chance that Medicaid will be expanded, yet there are no alternative solutions proffered by opponents. The politicians in opposition seem content to allow hospitals to fail and people to suffer and die.  Some do this in the name of freedom, others fiscal prudence, yet the result is the same in both cases.

People who can’t afford or can’t get health insurance need solutions, yet all they are getting from expansion opponents are sound bites.  Where’s the leadership, the courage, the bold and innovative solutions?

I’m pretty sure “freedom” to a single mother with kids suffering from asthma and diabetes means freedom from worry, from the gnawing fear that she’ll have to quit her job because she earns too much to qualify for Medicaid in Texas/Louisiana/Florida.  But it’s either that, or go bankrupt when her kids need care.

What does this mean to you?

Depends on your concern about others and your definition of freedom.



A worthy research project.

How many work comp claimants died from opioid overdoses last year in your state?

How many of your claimants died?

As far as I can tell we only know this figure for one state – Washington.  And we only know that because Gary Franklin, the state fund’s medical director did a lot of analysis of a lot of data. That analysis was a major factor in the state’s adoption of strong laws around opioid prescribing, laws that have been directly responsible for a 50 percent reduction in the number of opioid-related deaths of work comp claimants.

So. How many claimants are dying in your state?


Rx drug abuse summit – who’s not here

There are almost 900 people attending the second annual national Rx abuse summit, and many are workers comp stakeholders. There are PBMs, UR firms, testing companies, drug companies, a few clinicians from large payers: but no executives no C-suite residents, no actuaries.

That is precisely why opioids are the single biggest problem in workers comp.

Executives don’t grasp this. With a very few exceptions (Aig’s Benmosche is one, SCIF’s Tom Rowe another), the leadership the workers comp is not paying attention. I suppose this is understandable as they have yet to see the real impact of opioids on their financials. Sure they are aware of the growing influence of opioids and are sorta/kinda focused on drug costs, but most are much more cognizant of other more traditional issues: settlement rates, TRIA, admin expense ratios, market cycles. All important and significant, but I’d suggest nowhere near as important as opioids.

The reality is claimants on opioids for more than six months are at high risk for addiction, are not going back to work, and run up high medical costs. Many of these claimants have nothing more serious than back sprains and strains, conditions that should rarely – if ever – merit opioid treatment.

Until and unless those execs start paying attention, focusing their staffs and resources and government affairs people, the problem is going to get worse.

And until and unless actuaries tell them how much more costly these claims are that’s not going to happen.




The budget sequester is going to cut reimbursement rates for many providers – starting today many will see a 2 percent reduction for Medicare.  That’s going to hurt, but there’s good news as well – for some providers.

According to CMS, the most recent guidance from Congress on implementation of the sequester for Medicare providers requires CMS to “ensure reductions in reimbursement are not based on any currently-in-force profiling, bonus, ACO, e-billing or other reimbursement-altering methodology or process…”  CMS’ Office of the General Counsel’s interpretation of this guidance is it prohibits any staff-based input into “determining, deciding, or selecting which or to what extent bills, providers, locations, or procedures” will be affected.

As a result, as of today, CMS will begin implementing the “random sequenced reimbursement reduction program”, or RSRRP.  While the final details of this have yet to be worked out, early indications are it involves setting reimbursement at zero for every fiftieth provider bill; bills so affected will be pended and routed to the “further action required” queue (typically utilized for bills with missing data elements or demographic.

In this instance, the RSRRP bills will be held until such time as “adequate funding exists to complete the adjudication and reimbursement process.” [emphasis added]

Hospital organizations are, understandably, up in arms over the cuts, asserting they are arbitrary, capricious, and will cause significant harm to many hospitals, including the most vulnerable safety-net institutions.  An American Hospital Association report indicates the sequester will reduce spending by some $10.7 billion in 2013 alone, noting: “Sequestration is a blunt and indiscriminate instrument. It is not the responsible way for our nation to achieve deficit reduction” An AHA spokesperson went further: “Hospitals will have to make tough choices about which services to maintain because of potential cuts since hospitals will maintain the highest quality for whatever services they provide…”

Responding to the criticism, HHS Sec Kathleen Sibelius noted that her hands were, in effect, tied as Congress “effectively prevented HHS from taking any action to ameliorate the effect of the sequester.  Quoting from the report, Sec. Sibelius said: “the “blunt and indiscriminate” effect of the sequester calls to mind an HL Mencken quote; “the people get the government they deserve, and they deserve it good and hard.”

When asked how long the RSRRP bills might be held in limbo, a spokesperson responded: “ask Congress, and encourage your readers to do the same.”
What does this mean for you?

Likely more cost-shifting from hospitals seeking to make up lost revenue.  


The new compounds and who’s making them…

Gensco Labs has been busy filing trademarks for new and wonderful topical medications that are sure to solve myriad problems – to date they’ve filed for 46!  They sure are busy down there in Miramar, Florida!

There are a LOT of Genscos down in Inverness Florida…and the trademarks Gensco holds have been filed by Randy M Goldberg., Esq.  One wonders if this is the same Randy M Goldberg who is listed on his LinkedIn profile as Chief Legal Counsel of…wait for it…

Automated Healthcare Solutions!

If it is, one wonders if ABRY Partners, the private equity firm that has a stake in AHCS, is getting a piece of the pie.  Of course, two of ABRY’s other holdings, York RSG and Gould and Lamb, might not be too excited about that.

As long as we’re wondering, how do Gensco’s scientists get the time to do all that ground-breaking research work as they work tirelessly to bring the wonders of medical genius to injured workers around the country, working side-by-side with selfless people striving to ensure those terrific new medications get in the hands of as many dispensing physicians as possible.

Their medications include such wonders as SpeedGel, TranzGel, InflaGesic, LidoGesic, TranzGesic, and other xxx-Gesics.  Perhaps they’ll make a superduperGesic, or maybe even a TranzLidoSpeedInflaGesicGel…wouldn’t that be GREAT!!

No word if any of these wonder-drugs compounds have made their way to California or if they are some of the medications that have driven the average price per compounded med up some 68 percent.

SpeedGel has a wealth of wonderful ingredients; echinacea purpurea, echinacea angustifolia, aconitum napellus, arnica montana, calendula officinalis flower, hamamelis virginiana root bark/stem bark, atropa belladonna, bellis perennis, chamomile, achillea millefolium, hypericum perforatum and comfrey root gel.

No eye of newt or bat wing extract, but perhaps in a future version…

I’ve heard that the OTC version of SpeedGel is going to or has been pulled from the market – evidently some payers have been confusing it with the prescription version and reducing reimbursement.  Shame on you, payers!  Bad payers!  Fortunately, the REAL SpeedGelRx is going to continue on.  

Alas, some payers don’t see the benefits – this from Summit Holdings in Florida:

“In the first months of 2012, several new creams have entered the market. Again, these are formulated with common over-the-counter ingredients and, interestingly, are marketed exclusively to physicians who see workers’ comp patients. They are assigned National Drug Codes, along with corresponding Average Wholesale Prices.** SpeedGel is priced at $700 for 3 ounces, and TranzGel is listed for $695.

While your patients may not get the bill for these products, these costs have a major impact on the workers’ comp system. Our clients (your patients’ employers) end up paying these costs in increased premiums and, in many cases, actual medical costs.

In most cases, we are denying coverage for these products…” [emphasis added]

What doe this mean for you?

To find out of your claimants are lucky enough to be getting SpeedGelRx, search for NDC 35781-0200-5 and 35356-0647


The Health Care Social Media Review

In the “why didn’t this happen sooner” category is Louise Norris’ new review of health care social media blogging – you can find it here.

Brilliant and needed.