Run like hell…

Shockingly, compound drug fraudsters allegedly lied when they sold accounts receivable to investors.

Who’da thunk it?

Thanks to Greg Jones for his excellent investigative reporting on this; Greg reports today that:

Exhibits filed in the lawsuit by Shadow Tree Investment against Praxsyn Corp. reveals connections to three providers accused of accepting kickbacks from other compounding pharmacies. Praxsyn owns Mesa Pharmacy in Irvine, California.

Mesa was partnering with three providers who now face criminal charges for accepting kickbacks to prescribe compound drugs to injured workers.

The basis for the case appears to be Praxsyn allegedly didn’t tell Shadow Tree about pertinent details about the A/R deal…details such as the accusations about the source of the bills, the alleged nefarious activities of some of the parties involved, and relevant lien settlement information.

I was peripherally involved in something similar to this, when a compounding company was trying to sell its receivables a couple of potential buyers called me for my opinions.

Which, briefly summarized, were “run like hell.”

What does this mean for you?

That remains good advice for anyone approached by compounders, physician prescribing companies, and so-called “revenue cycle management firms” doing most of their work in these areas.

 

Opioids responsible for a fifth of the decline in male workforce

That’s a conclusion, albeit one with caveats, of a just-released study by Princeton University’s Alan Krueger PhD.

Here’s Dr Krueger’s key takeaway, with emphasis added:

about half of prime age men who are not in the labor force (NLF) may have a serious health condition that is a barrier to work. Nearly half of prime age NLF men take pain medication on a daily basis, and in nearly two-thirds of these cases they take prescription pain medication.

Labor force participation has fallen more in areas where relatively more opioid pain medication is prescribed, causing the problem of depressed labor force participation and the opioid crisis to become intertwined.

Implications abound.

For workers comp – despite unprecedented drops in opioid prescriptions for work comp patients, there remains a large population of patients addicted to/dependent on opioids. Moving this population away from opioids will require diverse, creative, and likely expensive services, patience, and persistence.

For the economy – a double whammy of non-productive people means they aren’t generating tax and revenues while consuming lots of resources in the form of aid, government funds, healthcare services, and family income.

For health plans, especially those serving the indigent, a very expensive, and very tough to manage population will increase Medicaid costs significantly.

For opioid manufacturers, shiploads of cash.

Thursday catch-up

Genex acquires Prium…

Good move by Genex, as Prium’s portfolio of services including physician review and pharmacy management ties in well to Genex’ current offerings. I’m a big fan of Prium CEO Michael Gavin – he’s one of the most thoughtful, intelligent, and measured people in our business…good news is he’s sticking around.

Kentucky’s making big progress on opioids

Thanks to WCRI’s Vennela Thumula PharmD for her study on how new legislation (HB-1) helped to reduce the number of new work comp patients receiving opioids.

The legislation required prescribers to check the Prescription Drug Monitoring database prior to prescribing opioids, limited opioid prescriptions, and implemented mandatory educational and patient treatment practices.

Key Takeaways

HB-1 immediately reduced opioids prescribed to patients in the first 12 months after the date of injury.

Both the percentage of patients receiving opioids and the amount of opioids decreased by more than 15 percentage points.

Major surgical patients weren’t significantly affected by HB-1; not much change in prescribing to these folks.

Patients with back sprains and similar diagnoses had far fewer opioid scripts.

Thanks to Andrew Kenneally, Communications Director of WCRI, for the head’s up…

Opioid marketing practices

Kudos to Sen Claire McCaskill, D MO, for publicizing opioid manufacturer Insys’ alleged efforts to get approval for fentanyl product Subsys through misrepresentation. McCaskill’s report included an:

audio recording of conversations between an Insys employee and pharmacy benefit manager representatives related to a Subsys prescription for Sarah Fuller, who later died from an alleged fentanyl overdose. This recording suggests the Insys employee in question repeatedly misled Envision Pharmaceutical Services to obtain approval for Ms. Fuller’s Subsys treatment—heavily implying she was employed by the prescribing physician and misrepresenting the type of pain the patient was experiencing.

Sarah Fuller

This follows other reports of Subsys’ unethical and potentially illegal marketing practices, where other Subsys reps said they called payers, saying they were from doctors’ offices and were seeking approval for the drug.

Hell is too cold for these people. 

Finally, a very revealing piece in HealthAffairs provides more insight into just how powerful big healthplans are:

insurers with market shares of 15 percent or more (average: 24.5 percent)…negotiated prices for office visits that were 21 percent lower than prices negotiated by insurers with shares of less than 5 percent.

Differences in providers’ and insurers’ bargaining power are a major contributor to variation in commercial health care prices

Workers’ comp folks – you’re lucky if a generalist work comp PPO’s market share at a practice is 3 percent…

Back out onto the campaign trail!

There’s no BIG problem in work comp pharmacy – and that’s scary.

In the fourteen years I’ve been surveying work comp payers on their views on pharmacy, I’ve never seen so little consensus among respondents on emerging issues.

In past years compounds, physician dispensing, opioids, price inflation, and new drug introductions have all been named by at least a plurality of respondents. Not so this year.

Here are some of the 24 respondents’ concerns:

legalization of marijuana – lots of talk about it but concern is what do you do about it, how do you handle it, pay for it, authorize it, etc. so many unknowns and little understanding
state regulations and how to bring information on those changed regulations and how to operate under the new regs back to adjusters and case managers at the desk level and to PBMs
I’m concerned we’ll see branded topicals increasing over the next few years despite a lack of efficacy and inflated prices. teracyn, speedgel, etc aren’t useful
advent of all new formularies, no one has grappled with legacy claims in that environment, thinking is formularies will get docs to taper it off – docs who prescribe all this don’t know how to taper, so finding the right docs and facilities is a real issue for legacy claims
acquisition of comp pbms and consolidation of the work comp PBM industry
Physician Dispensed Drugs and non-controlled home delivery – not just cost but formulary and safety and quality of care
what interventions can they do to to affect drug pricing, especially some of the drugs that have minimal alternatives
more problematic than opioids is the combination of benzodiazepines and sleep aids
watching very closely Evzio, naloxone prescribing practices as part of CDC
still a soft market so anything you can do to reduce costs is important

While payers are seeing good success in reducing opioid utilization and total drug spend, there are a host of troubling issues out there.

Here’s why this is a big issue.

Payers are all too used to getting screwed by unethical and very creative profiteers intent on sucking money away from employers and taxpayers by exploiting loopholes. Branded topicals, “independent” mail order pharmacies and novel drugs are all great examples of these tactics, often hidden under and supported by claims that these promote healing and health despite a total lack of supporting evidence.

In past years when doctor dispensing, the opioid crisis, or compounds were top-of-mind for most respondents, the industry joined together to come up with solutions. That obviously isn’t the case today, leaving patients exposed to crappy providers interested only in profits coming up with myriad ways to game the system.

What does this mean for you?

It’s not the one big problem that’ll get you, it’s the many small ones you may not even notice.

Big news in work comp pharmacy

Finishing up the Annual Survey of Prescription Drug Management in Workers’ Comp this week (I hope!).  24 payers responded this year – TPAs, Insurers, State funds, and very large employers. Each provided specific data about their pharmacy programs, data which provides remarkable insights into what’s really going on.

Something jumped out at me that I had to get out immediately…

Two big takeaways – drug spend dropped by almost 10 percent…

while opioid spend decreased even more – almost 14 percent.

Wrap your head around that.

Work comp PBMs and payers succeeded in eliminating one of every seven dollars spent on opioids; yes, overall drug spend was down a full 10 percent, driven in large part by lower utilization of opioids.

When opioids are eliminated, the drugs needed to counteract their awful side effects – everything from constipation to sexual dysfunction to gastrointestinal distress to depression – are reduced as well.

The programs, processes, analytical resources, clinical staff, research, and patient outreach that’s driven this stunning result are largely PBM-delivered (with some notable exceptions).  These services are clearly improving the quality of care delivered to work comp patients, while reducing costs for employers and taxpayers.

shipload of opioids has been taken out of circulation, eliminating the possibility of diversion, misuse, or abuse.

What does this mean for you?

Healthier patients, lower costs, reduced disability. 

 

Reducing opioids CAN reduce pain

Yes, patients can be weaned off opioids AND reduce their pain levels.

That’s the conclusion of a Vox article providing an excellent, detailed, and thorough review of a study published in the Annals of Internal Medicine Vox (thanks to Health News Review for the head’s up).

Here’s the abstract’s conclusion…

Very low quality evidence suggests that several types of interventions may be effective to reduce or discontinue LTOT [long term opioid therapy] and that pain, function, and quality of life may improve with opioid dose reduction.

Let’s parse this out.

The AIM study was based on a review of 67 clinical studies; it wasn’t “primary research.” Researchers found most of the studies on this issue had either a poor methodology or low sample size. And, relatively few were even of “fair” or “good” quality.

The 12.000 pain patients in these studies volunteered to taper off opioids; they were obviously motivated and wanted to make the change. So, it’s not possible to use this research when thinking about how to address non-volunteers as “involuntarily pulling patients off the drugs (may not) lead to similar outcomes.”

And this…

Crucially, the studies also looked at what happened when these reductions in opioid doses were paired with alternative treatments, including alternative medicines like acupuncture, interdisciplinary pain programs, and medication-assisted treatment for addiction. This is very, very different from a situation in which a patient is taken off opioids and effectively left stranded without any other form of care.

Conversely,

[the CDC concluded] there are simply no good long-term studies looking at the effects of opioids on long-term pain outcomes, while there are many studies showing that long-term opioid use can lead to bad results in other areas, including addiction and overdose.

Here’s a major point made in the study and Vox article – we HAVE to stop looking to opioids as a first-and-only line of treatment for pain.

the lack of access to non-opioid strategies may be one big reason that doctors resorted to opioids in the first place. The drugs offered an easy answer — if ultimately an ineffective one — to the many problems doctors faced, including patients who had complicated pain problems that physicians didn’t fully understand and tight schedules driven by the current demands of the health care system that made it hard to take the time to work through a patient’s individual problems. [emphasis added]

AND, we HAVE to allow/encourage/pay for alternative treatment.

What does this mean for you?

Suggest different initial treatments for pain, and get creative when helping patients who want to get off opioids.

Friday catch-up, innovation, and what kills it.

A few items of interest from around the work comp world…then a brief discussion of what works, and what doesn’t, in driving innovation.

Brian Allen’s now with Mitchell International’s ScriptAdvisor PBM operation.  A highly experienced government affairs professional, Brian’s been in the business for longer than he might admit.  Good pickup by Mitchell, which has rapidly grown its work comp pharmacy business and is likely the third largest PBM.

The fine folks at BWC Ohio have done exemplary work reducing overuse of opioids. Under the leadership of John Hanna MBA, RPh, over the last five years, BWC saw:

  • 44% fewer patients were taking opioids,
  • 48% lower opioid consumptiomn overall,
  • a prior authorization turnaround time of 4 hours (!) down from 2.5 days,
  • overall drug costs were down 7.7% year over year,

John and his folks have saved countless lives, prevented untold misery, significantly reduced employers’ and taxpayers costs, and done it all at a governmental organization. Yes, they have some significant advantages, but so do you.

John’s retiring this fall, but I fully expect BWC to continue to make progress as Nick Trego PharmD takes the reins…

And yes, I do have a man-crush on John.  I have huge respect for him. Thanks WorkCompCentral for the tip.

Innovation CAN happen in insurance – here’s a quick case study of one company’s pursuit of improvement via incremental, evolutionary, and disruptive innovation. 

Here’s the summary – but you really should read this.

Creating a culture of innovation is about much more than hiring a Chief Innovation Officer or creating a new department.  Culture change takes time and significant effort, and shifting culture toward innovation is no different. The process may start at the top, but it’s fundamentally about getting all employees involved.

But bureaucracy can frustrate innovation…

Also from Harvard Business Review, a piece on how bureaucracy screws up business and results and frustrates people.

(respondents) reported spending an average of 28% of their time—more than one day a week—on bureaucratic chores such as preparing reports, attending meetings, complying with internal requests, securing sign-offs and interacting with staff functions.  Moreover, a significant portion of that work seems to be creating little or no value.

But here’s the key takeaway – “Only 20% of respondents said that unconventional ideas were greeted with interest or enthusiasm in their organization. Eighty percent said new ideas were likely to encounter indifference, skepticism, or outright resistance.”

Opioid Exceptionalism – why these drugs are different than all others

Greetings – David Deitz here. Joe has kindly offered to let me provide a guest post on the latest report on the opioid epidemic from the National Academy of Sciences, Engineering and Medicine (NASEM). The report is available here. It’s also 389 pages long in its current pre-publication form, and because I think there are some really worthwhile parts relevant to many of you who follow MCM, I’m going to give you my summary of the highlights.

The quick take – opioids are fundamentally different from other drugs due to the harm they can cause – and the FDA should consider this when addressing opioids. (JP observation)

Why is this report important and why should you care? Well, for one, the opioid epidemic is a true, deadly epidemic, that has left few areas of America untouched. As NASEM puts it (emphasis mine):

Current national trends indicate that each year more people die of overdoses—the majority of which involve opioid drugs—than died in the entirety of the Vietnam War, the Korean War, or any armed conflict since the end of World War II.

That’s about 90 a day. Every day. I don’t think that’s “opioid hysteria”. And WC has a lot of reasons to care, since analgesic drugs, most of them opioids, are the principal drugs prescribed for occupational injuries.

It’s worth noting that last week also saw the release of the interim report from the President’s Commission on Combating Drug Addiction and the Opioid Crisis. This report urged declaration of a national emergency – more on that below.

As many of you recognize, this is an incredibly difficult public policy issue, in which the legitimate needs of millions of patients with acute and chronic pain must be balanced with the harms opioids create. The earlier IOM report on pain in 2011 really punted on this one, but the NASEM gets right to it in the introduction:

  • How exactly does a regulator….balance, for any particular regulatory action limiting access to opioids, the otherwise avoidable suffering that patients with pain would experience against the harms, not only to those individuals and their families but also to society, that would be prevented by the restriction? (pg 1-16)

The answers from NASEM are brilliant, well-reasoned and based on large servings of evidence – not only on opioid harms, but also on efficacy for chronic pain, likelihood of use and abuse in different contexts, alternative treatments, epidemiology of addiction and value and availability of various opioid addiction treatments, to name only a few. One of the most valuable concepts going forward is the doctrine of “opioid exceptionalism” a term coined by co-author Dr. Aaron Kesselheim in the NASEM webinar (you can get the slides here).

Put simply, opioid exceptionalism means that the FDA, as well as other public agencies, should go beyond the risk/benefit paradigm they currently use for new drug approvals that is based on individual patients and consider the implications of an individual opioid to patient’s families and society.

In other words, public health considerations need to come in because the societal implications are so large for this category of drugs. Drug manufacturers and some pain management professionals (and probably, libertarians) aren’t going to like this, but I think NASEM makes a compelling case that business as usual isn’t going to reverse the trends. They don’t really mention the workplace much as part of the public health discussion – there’s an opportunity for ACOEM to push up to the table.

I won’t review all of NASEM’s public policy recommendations, but some have implications for WC, including:

  • Improved reporting and data collection. This has to include WC if it’s going to be complete.
  • A call for insurers to reimburse for comprehensive pain management, including interdisciplinary approaches. Many in WC do, but it has to get better.
  • Better patient and public education about opioids. Again, a role for WC here beginning at the first emergency department or occupational medicine clinic visit.
  • Expanded treatment for opioid use disorder. There are cost implications for employers here, but it’s the right thing to do.

Meanwhile, the President’s Commission mostly agrees, and provides some of the same recommendations. Unfortunately, there are some thorny political problems with that emergency declaration (which I agree with) – it’s difficult to reconcile recommendations to “rapidly increase treatment capacity” and expand benefits for substance abuse treatment with cuts to Medicaid.

The NASEM is the meatier of the two, is better thought through and overall is one of the most comprehensive public policy documents I’ve read in a while. Take a few minutes to look at the slides, they are a good summary of the recommendations. Where do they touch your organization?

Let’s not just hope that the NASEM report makes a difference, but do what we can to ensure it.

David Deitz, MD, PhD is principal of David Deitz & Associates, a healthcare consulting firm based in Massachusetts.

 

California’s work comp formulary

California’s work comp pharmacy formulary process is moving ahead, but I have grave concerns in two areas – timing and cost.  (these are my personal concerns and are not intended to represent the views of CompPharma, LLC.)

First, timing.

The rules writing process is ongoing, while the formulary is slated to be implemented January 1, 2018. 

The rules aren’t even finalized yet, and it’s August.

That’s less than five months away.  Five months for PBMs, payers, prescribers, patients and pharmacies to make massive changes to processes, internal formularies, IT systems, contracts, call scripts, and a thousand other things.

Next, cost.

I’ve talked with regulators, PBMs, payers, employers, about this issue, and tried to re-engage w regulators, without a whole lot of any success.

Regulators have told me that the drastic cut to the fee schedule won’t be a problem because:

a) Payers can pay for clinical and program management costs separately
Well, no.
Unbundling pharmacy management services is a non-starter.
 Most payers don’t have the ability to do pharmacy management inhouse, so they rely on their PBMs. Regardless the payers would have to figure out what should cost how much, and how to charge their employer customers for clinical and program management services. Payers don’t have any way to do this without massive IT changes plus re-doing their internal cost-allocation processes, and/or re-negotiating contracts and policy terms.

b) Payers can just pay above the fee schedule
Again, highly unlikely.
Most payers can and/or will NOT pay above fee schedule. Many TPAs and insurers are precluded from doing so in their contracts with employers, and most would have to re-program IT, reporting, and bill review systems. Plus, many employers just flat-out refuse to pay above fee schedule.

Now there’s a new formulary in the offing, one that will demand even more from PBMs. There remains much uncertainty around implementation details while the implementation date draws ever closer. Setting aside the very real problems inherent in unbundling clinical and program management services, there’s no way PBMs, payers, and pharmacies could plan for and implement all the things they’d need to do to implement an unbundled or above-fee-schedule pricing methodology by January 1.

The bigger issue is this – California employers’ drug costs have declined for several years, opioid and compound usage is down significantly, and the drastic cuts to the fee schedule plus increased costs to implement and manage the formulary are going to:

  • make it harder for all parties to implement the formulary; and
  • make pharmacy management a huge money-loser. 

I don’t understand the logic here.

PBMs have been instrumental in cutting opioid usage in California every year for the last five years, investing huge sums in work that dramatically increases patient safety, reduces employers’ costs, but actually reduces PBM revenues and profits. 

Now, regulators want to further cut PBM revenues while adding a LOT more work to pharmacy management…

That’s not to say the formulary in and of itself isn’t a potential positive.

From Alex Swedlow…

This formulary is an important step forward.  The legislative intent was to increase quality of care and lower the high cost of drugs and the huge frictional costs associated with managing those drugs.

The formulary and regs that link prescriptions to the standard of care (MTUS) will raise quality of care.  The exempt, special fill and perioperative drug lists will reduce some of the dispute resolution costs.  UR is supposed to be for low frequency, high cost treatment like inpatient services, less so for high frequency low cost care such as pharmacy.  That said, those who seek to exploit the new rules and regulations have the incentive and creativity to do so. 

Solution:

  1. Delay the implementation of the formulary and related changes for at least six months after the rules and regs are finalized.
  2. Significantly increase the drug fee schedule.

What does this mean for you?

Adding a lot of complexity to the drug approval and delivery process while continuing to slash reimbursement will lead to unintended and potentially adverse consequences.

 

Note – I’m president of CompPharma, a trade group for work comp PBMs, but fee schedule changes and the like have no financial impact on CompPharma or me personally.

 

Workers’ comp update

now that repeal and replace is dead, we can figure out what we missed while contemplating healthcare armageddon.

Workers’ comp

WCRI’s been publishing a flurry of great reports on injured worker outcomes, physician dispensing, opioids, and hospital costs. Sign up for a free webinar on outcomes here.

Coventry’s out with the second part of their work comp Drug Trends Report – download it here. This part deals with the differences between managed and unmanaged pharmacy.  Good video intro by Nikki Wilson too...

HealtheSystems is rumored to be looking to split the company in two, selling off the PBM and keeping the Ancillary Benefit Network business. With myMatrixx setting yet another high point for valuation recently, we’ll have to see if PBM prices remain stratospheric or drop a little closer to earth.

Given the myMatrixx – Express Scripts transaction had a ton of strategic benefit for the acquirer, a similar valuation for Healthe might be a tad optimistic. In addition, a very sizable chunk of the PBM business comes from one payer – the Travelers – a “customer concentration” issue that will give some pause.

BTW, I’m hearing optimism from many work comp pharma buyers about the “new” myMatrixx-ESI combination.  Guarded, but optimistic.

Medicare

Are you seeing an uptick in Commercial Repayment Center (CRC) demands coming from the Coordination of Benefits & Recovery Program? (COB&R)? A couple clients have mentioned this to me..the concern seems to be CMS is revisiting MSAs and looking for additional funds (I am likely not phrasing this correctly…Rafael, please clarify/correct!)

Physicians work for others…

About 2/3rds of younger physicians are employed.   Overall, less than half of practicing physicians have an ownership stake in their practice.

Finally, here’s a really interesting snapshot of price variation in a wide variety of healthcare markets