Drugs and work comp – top issues are…

Opioids, ACOEM’s new guidelines, compounds, and, alas, physician dispensing.

Here’s a quick guide to the top issues and sources for additional info.

Opioids continue to plague the industry; while many PBMs and payers are having some success in reducing the use of opioids in new claims, there’s still a huge group of legacy claimants that have been on far too many pills for far too long.  Sandy Blunt and I conducted a survey on the opioid issue last fall (thanks to CID for sponsoring and the 400 participants for their insights) – The Survey of Opioid Management in Workers’ Comp can be downloaded here.

Last reminder – make sure you are going to Operation UNITE’s Prescription Rx Summit in Atlanta April 22 – 24.  The Summit is focused on all aspects of the prescription drug abuse problem.

Perhaps the best new tool in our armamentarium comes from ACOEM – their opioid guidelines were released last month and are available to subscribers here.  (you can also get a 14-day trial subscription).  A trio of highlights that challenge conventional wisdom merit attention:

  • No comparative trial shows that an opioid is superior to another medication (out of 28 trials.)
  • No evidence shows the long-term efficacy of opioids – the longest placebo controlled trial lasted only 4 months
  • 80-94% of opioid trials have industry conflicts (funding and/or conflicts of interest in the trials).

I’ll be posting an in-depth review of these guidelines later this week.  For now, my non-clinicians take is these are the best opioid guidelines out there; very well researched, highly credible, and desperately needed.

Express Scripts published a report on their work comp results; you can get a summary here. (hat tip to WorkCompWire)

CompPharma, the consortium of work comp pharmacy benefit managers (of which I am president), released a research paper on compounding medications in work comp; you can get a copy here (no cost, and no registration required)

I don’t see medical marijuana as a big issue; If anything it will be of occasional interest.  That said, in our upcoming Survey of Prescription Drug Management in Work Comp, we will be asking payers what their view of the issue is, and will report back on the results. Participants (previous reports can be found here).

Finally, we’d love to have you participate in the Prescription Drug Management in Work Comp survey; participants receive a MUCH more detailed copy of the report than regular people which includes a wealth of data points and statistics.  e-mail me at infoAT healthstrategyassocDOTcom (replace the caps with symbols first!) and we’ll sign you up (all responses are confidential and no company-specific data is shared).


Compounding drugs – myth v reality

There’s a lot of nonsense circulating about the wonders of compounded medications, almost all of it promulgated by companies and people in the compounding industry.

What’s notable about all of their claims is the complete lack of scientific research supporting their claims that more people need compounds, that compounds work, are safe, and deliver better results than non-compounded medications.

Turns out the reason these advocates don’t cite research is – the research doesn’t support the use of compounds for more than a very few patients.

That’s the key takeaway from CompPharma’s just-released research paper; Compounding is Confounding Worker’s Compensation.  You can download it here.

Here are a few of the findings:

  • Compounds have not been proven to be more effective than commercially available, manufactured drugs that have been approved by the U.S. Food and Drug Administration (FDA) in similar classes. In fact, efficacy data in general are non-existent for the types of compounds seen in workers’ compensation claims.
  • Using compounds poses risks to patients
  • Compounds are often not medically necessary
  • Compounds are expensive

Despite reports of outrageous cost inflation, dozens of deaths due to faulty processes and poor quality control, and little progress in improving oversight, compounding continues to plague work comp.

What does this mean for you?

Time to develop and implement a policy for approving and reimbursing for compounds – one based on science, and not marketing nonsense.

Note – I am president of CompPharma, altho I had little to do with the actual research paper; credit for that goes to the pharmacists and government affairs people from CompPharma’s member PBMs.  They did a terrific job.

Another bomb drops on physician dispensers

Allstate Insurance filed suit against physician dispensing “technology” firms Infinite Strategic Innovations Inc (ISI) and Doctors Medical LLC earlier this week.  This is the second in what may be an-ongoing series of legal actions by the giant insurer, and comes on the heels of a settlement in their earlier suit against dispensing “technology company” Automated Healthcare Solutions.  

While the AHCS suit has been dismissed, I think we can assume Allstate made out quite well in the “dismissal”; Allstate doesn’t move unless they are very confident, and they come with overwhelming force.  Even the most arrogant, litigious, and downright nasty opponents are going to quail in the face of an Allstate lawsuit. While no one’s talking,   it is logical that Allstate would not have allowed the suit to be withdrawn unless they were pretty darn happy with the resolution.

My guess is Doctors Medical’s owner, Tom Mollick, is having a very bad week. And things are not going to get any better for Mollick et al.

From reading the complaint, Allstate is claiming ISI and DM received payments totaling $93,265 for PIP claims in Michigan, and has billed Allstate another $443,751 for other claims.  Allstate wants (most of) their money back, doesn’t want to have to pay most of the pending claims, and wants ISI and DM to agree to stop billing the insurer.

The key parts of the suit include:

  • request for declaration judgment
  • a statement that ISI and DM have no standing to bill as they are not medical providers
  • request for restitution for claims adjusting, administrative, and legal costs
  • assertion that ISI and DM operated “under the umbrella” of Rx Development Associates, Inc.  

There’s a lot more to this, but the net is this.  This is the second in what may well be a series of suits against physician dispensing companies; my guess is Allstate won big in their initial suit against AHCS, and is pursuing Mollick now, and will go after other dispensing companies as well.

As the AHCS suit was withdrawn, we don’t know what the resolution was – and never will.  And more’s the pity, because Allstate may well have solved its problem, but did nothing to address the problem for the rest of the industry.  That’s understandable as it isn’t their lawyers’ job to fix other insurers’ problems.

Nonetheless, it would be…helpful if the result of these legal actions was public knowledge – it would give pause to the other dispensers and their cronies, alert other insurers to the issue, and, over the long term, reduce Michigan auto insurance costs.

What does this mean for you?

Check your payment records, figure out how much you’re paying dispensers and their enablers, and do something about it.


The price of the pill is so last century

For every complex problem there is an answer that is clear, simple, and wrong.

Thank you, HL Mencken, for describing the problem inherent in picking a workers’ comp PBM based on how much they charge for drugs.  

It is really easy to compare bids from PBMs based solely on how much they’ll charge for brands and generics.

It is also wrong.

While workers comp insurers have (mostly) figured out that the price of the pill is a lousy way to decide on a PBM, every now and then I get a call from a payer who’s just been offered a GREAT price from a PBM, and is either a) gleeful that they have been so smart and such a cunning negotiator; or b) panicked because their boss wants to change PBMs and the vendor manager knows it’s going to blow up.

Okay, let’s walk thru this.

The price of the pill is important, but it is only ONE part of the equation. Which is as follows:

Price per pill x number of pills per script x percentage of scripts processed in the PBM’s network.

Price per pill is determined by the discount below AWP, brand:generic mix, and, most importantly, by the type of pills dispensed.  If a PBM does a crappy job managing the clinical aspects of the pharmacy program, you’re going to pay for far too many pills, and for the wrong kind of pills. It’s safe to say you’ll be paying for lots of opioids, Soma, and other highly-questionable-if-not-downright-harmful-drugs.

But hey, at least you’re getting them for cheap!

Lets say you don’t care about the kind and volume of pills, you just want the deep discount.  Even then, you will likely find the cheap PBM delivers crappy results.  Here’s why.

PBMs that pitch really low per-pill pricing are likely using a group health-contracted pharmacy network, which leads to problems with paper bills and administrative hassles for adjusters.  Regardless, the network penetration for the cheapo PBMs tends to be pretty low compared to the WC PBMs.  There’s a bunch of reasons for that which I won’t get in to here.

Suffice it to say that while you may get a great price on 40% of your scripts, you’ll be paying flat-out retail on the other 60%.

In contrast, WC PBMs typically deliver penetration in the 80+% range.

So, even if their discount isn’t nearly as low as the cheapo ones, the effective price will likely be lower – because you get that discount on twice as many scripts.  

What does this mean for you?

Look at the price, sure, but look at penetration.  And, of course, clinical programs.

Because the greatest penetration in the world is a big problem if its all opioids and Soma.

Opioid guidelines are about to get a whole lot better

In about ten days, providers and payers struggling with opioids will get a big hand up.

ACOEM will be releasing their just-completed Opioid Guidelines; they are comprehensive, extremely well-researched and well-documented, and desperately needed.

I learned about the guidelines from a presentation delivered by Kurt Hegmann MD MPH, Professor at the University of Utah and Chair of the Occ Med Division at the University of Utah’s Compensable Disabilty Forum.  In his spare time, Kurt is also responsible for ACOEM’s guidelines as the Editor-in-Chief, a role he’s filled for eight years.

Affable and engaging, Dr Hegmann walked the audience through the development process (quite rigorous, involving 26 professionals with NO conflicts of interest using the Institute of Medicine methodology), the research and (960) references behind the guidelines and the ranking/categorization of individual guidelines.

Here are a couple of takeaways.

  • Of the 220 pages, the vast majority are tables of evidence – some practitioners may peruse them, but most will focus on the couple dozen pages specific to individual treatments
  • The guidelines address acute and chronic treatment, with chronic defined as > 3 months
  • The detail, specificity, and depth of research and their application to guidelines are impressive indeed.  What these guidelines add to our understanding of what works, why, and what doesn’t is impressive by itself; how they blow apart pre-conceived notions of “appropriate” care and challenge long-held conventional wisdom was – at least for me – rather jarring.

    For example;

  • Other guidelines say it is Ok to be on safety sensitive jobs and take opioids – that is NOT supported by the research
  • The researchers found NO link between opioids and improved function – studies that show there is a link almost always use self-reported data.
  • No trials indicate opioids are superior for acute pain than NSAIDs.
  • The MAXIMUM dosage recommended is 50 MEDs (morphine equivalent dosage), significantly lower than most guidelines which use 100-120.  The reason is the research – there is a much lower risk at this level, with the data indicating a sharply higher risk profile for higher dosage.
  • Drug testing is recommended with a baseline and random tests 2-4x a year; the higher the dosage – more screening
  • Pain rating scales are all but useless as data points as lots of patients indicate their pain is a 10 and yet are working full time.  This is not possible, and indicates the uselessness of subjective ratings/scores/data.

Are they perfect?  No.  But that’s due to the lack of research on specific issues, and not to the diligence and perseverance of the developers.  If the research is solid, it is in the guidelines.

What does this mean for you?

A lot of confidence in the guidelines, and hope that we can begin to gain control of the epidemic of opioid overprescribing.

How Texas Mutual is successfully addressing opioids

A few states – very few – are getting some measure of control over the overuse of opioids in workers’ comp.  I’ve been speaking to folks in these states, and will report on those conversations, what is working, what isn’t, and what we can learn.

We’ll start with Texas, where Kim Haugaard of Texas Mutual has been working closely with TM’s Medical Director Nick Tsourmas MD – and pretty much everyone else at TM and in the provider community on this issue for years.  Notably, Texas has the advantage of a strong regulatory environment with clinical guidelines and strong UR rules.  While this combination makes it somewhat easier to address opioid overuse, the regs are only good if they are fully embraced.  That, Texas Mutual has done.

Here’s part of our conversation.

MCM – What was a key factor motivating TM to address opioids and drugs?

Kim – We are meeting with our actuaries constantly, monitoring the trend lines, average paid per claim and other data points.  We separate out claims with and without opioids.  [From those analyses, we learned] The longer claims were open, the higher the chance there were drugs involved, and drugs were the driving cost factor.  Once you address the drugs, you reduce length of disability.

MCM – What are the results of your efforts to date?

Kim – We have had a lot of success addressing opioids and all drug overuse, probably more than any other company. Our drug costs have seen a steep drop since Q1 2010.

Overall opioid usage is down by over 40%. I can tell you that of the 1,249 claims no longer receiving “N Drugs”, 46% of those injured workers are receiving no drugs whatsoever. The other ones have moved away from the N-status drugs to Y-status drugs. 

You may remember at AASCIF, Dr. Tsourmas presented the findings on a program that I implemented several years ago. For the top 400 most costly Rx claims, the average Rx cost per claim per year was $14,700. After our program – outreach for doctor-to-doctor, average cost per claim was $3300, average savings of $11,400 per claim.

MCM – What’s the key to your success?

Kim – You have to attack the drug issue from all angles, this is a team effort, involving prescribing doctors, and various carrier stakeholders, including, front-line staff, actuary, medical operations staff, medical director, legal, and the PBM.

MCM – You noted this is a team effort – who else is on your “team”?

Kim – We are working very closely with the Texas Medical Society and Pain Society, we’ve spoken at their conferences and met with physicians and physician leaders individually.  Some physicians we had issues with are now collaborating closely to address the opioid issue.

On drug testing, we are working with Millennium Labs on developing a “best practices” program, setting up testing protocols based on patient risk scores.

MCM – How do you focus your efforts?

Kim – In everything we do, we focus on outliers – reward the high performers and analyze and address the low performers.

What does this mean for you?

Yes, you can dramatically impact opioid overuse.  

While strong regulations are a big help, a) you have to use them effectively, and b) much of what Texas Mutual has done can be done anywhere – perhaps with a bit less success, but success nonetheless.

Friday catch-up and fast reads

Physician dispensing – it’s not just for Americans any more!

From the Harvard Business Review comes this item; Chinese docs prescribe waaaay too many antibiotics – because that’s how they make money.

Antibiotics are often prescribed unnecessarily for colds in China, in part because hospitals sell medications directly to patients and doctors’ bonuses often depend on drug revenue, says a team led by Janet Currie of Princeton. In a past study by other researchers, two-thirds of patients visiting clinics with mild cold or flu symptoms received inappropriate prescriptions for antibiotics, and many were advised to take powerful “second-line” antibiotics that are supposed to be reserved for serious illnesses. These prescriptions impose substantial costs on patients, raise the risk of side effects, and foster growth of drug-resistant “superbugs,”

Here’s hoping WC docs don’t “reverse engineer” Chinese business practices.


The Hartford is looking for a medical director; evidently Rob Bonner MD will be retiring.  This is one of those great opportunities for business-oriented work comp docs; the Hartford’s Medical Director has real authority and responsibility.


Much as I respect the folks at R&I, their latest “editor’s choice” had me scratching my head about a piece from the Washington Examiner - It’s a climate-change denier piece asserting that we may be in for a century of cooling due to…wait for it…sunspots.

C’mon.  There have been 2528 peer-reviewed articles about climate change over the last year.  A grand total of one – yes, that’s one – rejected man-made global warming.  And that lone article was in the Herald of the Russian Academy of Sciences.

Principled and soundly-researched discussion is critically important – but only when it is reality-based.

Exchange enrollment

Exchange enrollment data is pretty mixed; numbers are way up in California and New York but most folks who are eligible for Medicaid or for subsidies via the Exchanges don’t know they are eligible.  Not surprisingly, the Latino enrollment data in California has been disappointing – to say the least.

On the federal side, enrollment seems to be much below expectations, even after the end-of-the-year push.  Whether things will pick up a lot before the March drop-dead date remains to be seen…

One factor affecting enrollment in many states may be that fourteen have enacted so-called “navigator suppression” laws; legislation that hinders/prevents/makes it difficult for the people who are supposed to help the uninsured enroll do their job. (thanks to Julie for the tip).

Impairment ratings

In one of the more esoteric  - but nonetheless significant conversations of the last week, I learned that many of the impairment ratings done in Texas are wrong – for a multitude of reasons.  Evidently those done by chiros are often (like 80% often) much higher than they should be, and medical doctors aren’t a whole lot better.  TX payers that aren’t reviewing ratings to make sure they are right may be paying out a whole lot more than they should – especially if those ratings are above 15%, the “magic number” where big payouts kick in.

Enjoy the frosty weekend – high this week in upstate NY has been 8 degrees.  Get out and enjoy!


Why don’t workers’ comp payers have pharmacists on staff?

I’m only aware of three major work comp insurers (Travelers, BWC-Ohio, Washington L&I) that have pharmacists on staff; the North Dakota State Fund does as well.

With pharmacy costs accounting for somewhere around 15% of total medical spend, that seems like a “miss”.  Yes, pharmacy costs have been flat in recent years, but the impact of drugs on work comp claim duration and the medical and indemnity expense associated with long-term drug use is quite significant.

Many payers have medical directors, nurses, and other clinicians on staff to help address medical issues; in some instances ALL medical issues are the purview of clinicians. Yet these payers don’t have pharmacists on staff, relying instead on medical folks.  Sure, they have knowledge of pharmacy, but nowhere near the depth and breadth of expertise resident in even the greenest pharmacist.

As physician dispensing of medications increases, payers begin (yes, most are just beginning) to address their long-term opioid users, off-label prescribing continues to grow, new medications come on the market, and compounding spreads, payers will find themselves at a disadvantage if they don’t have inhouse expertise.

Sure, PBMs have pharmacists on staff, and most are very, very experienced, understand pain management, and know work comp.  They have the added benefit of being “free”; they don’t increase overhead expenses.  But they work for the PBM, aren’t available on an ongoing basis to address the issues listed above, and if the insurer switches PBMs, that experience and corporate history disappears.

Twenty years ago rare was the insurer with any real medical expertise on staff. Claim adjusters were quite capable of handling medical issues, thank you.

It won’t  - at least it shouldn’t – take that long for insurers to see the wisdom of hiring pharmacists.



Is Zohydro the next addiction creator?

I’m just as sick of writing about opioids as you are reading about them.

But the FDA’s approval of Zohydro, yet another highly-addictive, easily-abused opioid – the fourth in the last four years – requires our attention.

I’ve been trying to ignore the Zohydro story but today’s excellent piece in WorkCompCentral reminds us just how difficult the battle is. Zohydro is a very powerful, “extended release” opioid pill.  The problem is this; while the drug is formulated to allow the opioid to gradually “leak out” into the blood stream, abusers can get all the opioids into their system at once by crushing, dissolving, or melting the pill.

No one I have spoken with – or quoted in the WCC piece – understands why the FDA would approve Zohydro without tamper-resistance; some form of chemical or other method that prevents this crushing/dissolving/melting/burning process.  Many drugs on the market today have this type of modification.

But they did.  And we’re stuck with it.

So, what do we do?  Here are a few ideas.

  • Require all use of Zohydro is pre-authorized, and only allowed after failure on other, much less potent medications.
  • Require (where possible) substitution of one of the abuse-deterrent medications for Zohydro.
  • Monitor physician prescribing patterns, and intervene with docs/practices prescribing Zohydro.  Let them know you are watching, require proof of medical necessity, and constantly monitor their patients.  Require drug testing, opioid agreements, evaluation of pain and functionality.
  • Reach out to ALL docs who write scripts for Zohydro letting them know your policy. Do this early.

It comes down to the docs who treat your claimants.  If you have the right docs, this won’t be a problem.  If you have to work with all docs, monitor, manage, intervene.

Yes, it is a LOT of work.  But it is a LOT less work than dealing with more addicted claimants.

What does this mean for you?

Fortunately, most payers are far better prepared to deal with Zohydro than they were a few years ago.  Get ready, and measure how many claimants are taking Zohydro on a weekly basis.  That’s the metric to measure success.  

Opioids in Work Comp Survey – more results & Webinar

Almost done analyzing the megabytes of data from our Survey of Opioid Management in Workers’ Comp; here are some of the key takeaways.

Here’s the key takeaway; most respondents understand the problem and know (generally) what needs to be done, but their organizations aren’t doing many of the things they should be.

In the “not really a surprise” category, almost all respondents believe opioids are overused in workers’ comp.

But this doesn’t mean they should NEVER be used; over 95% of respondents believe there is an important role for opioids in comp;

  • over three-quarters believe opioids are appropriate for addressing pain associated with catastrophic injuries or
  • recovery from surgery,
  • and two-thirds also believe they are appropriate for dealing with short term acute pain.

In comparison, relatively few – under 25%, believe opioids are appropriate for addressing chronic pain.

Both qualitative and quantitative responses overwhelmingly indicate the prescribing physician is the primary “factor” driving opioid overuse; almost 3/4 of respondents are monitoring physician prescribing patterns.

Clearly we are in the early stages of dealing with the problem; while most respondents know a comprehensive and integrated approach is the optimal solution, few companies have developed or implemented one; most are one-off, separate processes that rarely tie together.

Sponsor CID Management will be hosting a webinar highlighting key results and takeaways, you can register for the free webinar here.  I’d do it now, as there are only 500 slots and there are a couple hundred plus already signed up.

We will be diving into details in the webinar, providing examples of programs that are in place, the results of those programs, and where things are headed.  The webinar is November 12 at 2 pm eastern, 11 pacific.