Year: 2012

Jun
20

What’s a Prescription Monitoring Program and why you should care

Posted by Joe Paduda on Wednesday, June 20th, 2012 | Comments

Prescription Monitoring Programs are state-based electronic information systems that collect and deliver information about the drugs dispensed to patients, the prescribers thereof, and the pharmacies that do the dispensing.
Each state now has legislation enabling a PMP, with New Hampshire just added to the list. Not all are operational, and even among those that are there is wide variation among and between PMPs. Some are mandatory – that is, they require physicians and/or pharmacies to check them before prescribing or dispensing certain drugs. Others are optional – not surprisingly, usage in mandatory states is much higher than in those states where usage is optional.
What drugs are entered into the system also varies, with some states requiring much broader lists of drugs be tracked via their PMP – typically Schedule II – V Others only require tracking for the most potent Scheduled drugs.
PMPs can identify likely doctor-shopping and patients getting multiple fills for the same script, prevent duplicate fills, guard against dangerous drug-drug interactions, help law enforcement identify potentially fraudulent or criminal activity, and help physicians assess the risk in prescribing narcotics.
There have been some significant results. This from Brandeis’ University’s PMP Center of Excellence:
• Ohio – emergency department medical providers found that 41% of those given PMP data altered their prescribing for patients receiving multiple simultaneous narcotics prescriptions. Of these providers, 63% prescribed no narcotics or fewer narcotics than originally planned, while 39% prescribed more.
• California – 74% of physician responders to a survey indicated they had changed their prescribing practices to a patient as a result of using PMP Patient Activity Reports (PAR); 91% rated the “effectiveness of the PAR in maintaining the care and health of your patient” as good to excellent.
• Kentucky – A 2010 survey of users of Kentucky’s PMP, Kentucky All Schedule Prescription Electronic Reporting (KASPER), found that were an aid to clinical practice, with 70% of prescribers and dispensers judged PMP reports to be “very” or “somewhat” important in helping them decide what drug to prescribe a patient; 90% of prescribers and pharmacists “refused to prescribe or dispense a controlled substance based on the information contained in a KASPER report.”
• Louisiana – Five doctor shoppers who each obtained an average of 16.9 controlled substances prescriptions per month prior to rollout of the state’s PMP in September dropped to 0 prescriptions by December.
• As the Massachusetts PMP began sending unsolicited PMP reports regarding possible doctor shoppers to prescribers in 2010, prescribers were asked about the usefulness of the reports. Of the first 162 responders, only 14% said they were “aware of all or most of other prescribers,” and only 13% said “based on current knowledge, including the report, the patient appears to have legitimate medical reason for prescriptions from multiple prescribers.”
PMPs – properly set up and implemented – can be valuable tools in the battle against opioid abuse and diversion. Alas, the AMA and some other provider and “patient advocacy” groups find fault with PMPs, decrying the extra labor involved in ensuring patient safety and raising what are mostly ill-founded concerns with patient data.
There will be much more to come on PMPs; they need support, strengthening, and financial resources. Remember this.

Jun
19

Hospital collections down…your costs up?

Posted by Joe Paduda on Tuesday, June 19th, 2012 | Comments

Seeking protection from double digit annual premium increases, employers have increasingly shifted premium costs to employees and increased deductibles and copays. That’s been largely responsible for the flattening out of rate increases, but there’s been a downstream effect that was entirely predictable.
Hospitals’ write-offs for bad debt were surprisingly stable during and immediately after the recession – since then, they’ve increased dramatically.
In Q4, 2011,“uncollectibles” hit 7.38 percent of gross revenue, up from an average of about 5 percent over the previous eleven quarters.
There’s likely a direct connection between increased employee deductibles and copays and hospital bad debt. And that trend will continue. According to a piece in Health Plan Week [subscription required], employees will pay “34.4% for health coverage (a combination of premiums and out-of-pocket costs) — up from 33.2% in 2011.”
In real money, that’s about eight thousand dollars, and headed higher.
While the higher deductible amounts are undoubtedly making consumers more price sensitive, they also require consumers to pre-fund those accounts so that if and when they need care, the dollars are there. What appears to be happening is many of the health savings accounts aren’t adequately funded so hospitals aren’t getting paid for the patient’s part of the treatment cost.

Simultaneously, Medicaid (about nine percent of the average hospital’s revenue) reimbursement is under enormous pressure as legislators look to reduce costs and Medicare is tightening up as well.
The result? Hospitals’ revenues are shrinking while they’re pressured to improve patient safety, streamline administrative processes, better document care, and invest in IT.
The money’s got to come from somewhere.

What does this mean for you?
Workers comp, auto, and general liability insurers, hold on to those wallets. You’re a very soft target.

Jun
15

The (second to) Last Word on the AIG bailout

Posted by Joe Paduda on Friday, June 15th, 2012 | Comments

We taxpayers agreed to pony up $182.5 billion to bail out AIG after the credit derivative debacle (well, mostly we taxpayers). There were two criticisms of the deal; first that the government should allow the market to determine winners and losers, and second that we’d lose our money. First, the second criticism.
As of yesterday, the Federal Reserve got all its money back plus more. AIG (now doing business as Chartis) announced it has repaid all the Fed money it borrowed (it did not need $21 of the $182.5 billion) and dramatically reduced the amount it owes the US Treasury.
To date, AIG has paid back about $152 billion.
While most of these dollars came from the sale of assets – insurance companies, leasing companies, and other subsidiaries of AIG, this would not have happened if not for significant improvements in the company’s ongoing operations.
That is a credit to the Chartis employees who suffered – and I do mean suffered – through the brutal conditions after AIG’s credit derivative investment group damn near killed the whole company, and a good chunk of the world economy along with it. Whether it was navigating the crowds of protestors outside company buildings, avoiding neighbors at cocktail parties and cookouts, testifying before regulators and Congress, or talking to customers, brokers and prospects, the late summer and fall of 2008 were just awful.
Chartis still has significant issues (excess work comp book is a big one), but CEO Benmosche has the company back on the right track. And thanks to those who stayed and fixed Chartis, the Fed has actually made a profit on that bailout – a profit of at least $3 billion and probably twice that.
In regard to the first complaint about the bailout, there’s a legitimate argument to be made that governments should not bail out companies that fail. In the case of AIG, I believe that’s not the case, for two reasons.
First, inadequate regulations undoubtedly played a part in the credit derivative issue. Thus, government was somewhat responsible for the disaster, and we – the people – are the government. We “allowed” AIG to made those now-obviously-incredibly-stupid investments (isn’t hindsight great?), so, because the problems inherent in a failure of AIG were so monumental, we have to share the responsibility for fixing the problem.
Second, AIG had its fingers in so many aspects of global finance that a failure would have been more than a disaster – it would have cratered the world economy and devastated many individuals, companies, and families. As I noted back in 2009, “AIG provides the underpinning for many pension funds and retirement plans; its financial instruments guarantee the returns for pensioners. It backs up the investment of many banks. It owns many of the airlines’ airplanes, planes that might be repossessed if AIG goes under. AIG insures many Fortune 500 companies, and is among the largest writers of workers comp in the nation. It is a large individual auto insurer as well.”
Thanks to WorkCompCentral for the head’s up.

Jun
14

PMSI’s Opioid Summit – part one

Posted by Joe Paduda on Thursday, June 14th, 2012 | Comments

I was invited to attend PMSI’s Opioid Summit last month and speak briefly on legislative and regulatory actions focused on this issue. The Summit featured Colorado WC Medical Director Kathryn Mueller MD MPH; PMSI Medical Director Natalie Hartenbaum MD MPH; Len Kamen DO and addictionologist; and representatives from several insurance companies, all speaking on their efforts to identify and address potential overuse and misuse of opioids.
Here are a few of the highlights from the meeting. I’ll skip the discussion of the scope of the problem; it’s huge and growing, but it’s time to talk solutions.
First up, what is pain management – Dr Mueller cited the AHRQ Technical Brief on chronic non-cancer pain, noting in part “the focus is not eliminating pain but managing pain to restore physical and mental function and quality of life.”
That is a KEY issue – managing v eliminating pain. It is unrealistic to expect to eliminate pain, and attempting to do so is in large part how we got to this disastrous point.
Dr Mueller went on to review ACOEM’s recommendations for opioid use, which, when compared to what actually happens out there, are pretty remarkable.
Dr Hartenbaum discussed urine drug testing (UDT) in chronic pain and workers comp, citing the WOEMA comparison of opioid guidelines and noting there are various testing protocols;
– before starting a patient on opioids and annually up to four times a year – more if misuse is suspected.
– once per year for “low risk”, up to 4+ times per year for higher risk, high dosage (>120 MED (morphine equivalent dosage)) and/or patients exhibiting aberrant behavior. Hartenbaum cited the opioid risk tool as potentially useful in risk-scoring patients.
Her discussion of UDT was detailed, thorough, and enlightening. (disclosure, Millennium Labs is an HSA consulting client; they were not present at the meeting).
There was more, which I’ll relate tomorrow.

Jun
12

Survey of UR in work comp – initial results…

Posted by Joe Paduda on Tuesday, June 12th, 2012 | Comments

HSA’s first annual Survey on Utilization Review in Workers Compensation. is underway and we’ve got a few preliminary findings to report. (click on the link to fill out the survey)
We are surveying C level execs as well as desk-level folks (claims adjusters, claims execs) for their opinions concerning and results of UR; 80 responses so far and here are a few of the highlights.
– The vast majority of respondents utilize UM/UR to control medical costs and ensure appropriate medical treatment, while for a minority it is a revenue generator.
– Among desk-level respondents whose firms internalize UM/UR, over a third cite UM as a core competency as a key reason for performing UR in-house. 40% cite controlling UM costs, while almost half note UM is integrated with other medical management programs. This is in contrast to executives’ responses; only one in five claims UM is a core competency…
– There’s a big gap between desk level folks and execs when it comes to integration of UM with other systems, with execs twice as likely as front-line staff to report they are integrated. Interestingly, this is similar to the difference between execs and desk level staff we found in our bill review survey; most execs thought BR was integrated with UR but most desk folks did not.
There’s lots more to come, as we’re collecting a wealth of data on utilization review trends, services, vendors, costs, outcomes, and functions. Respondents receive a detailed version of the survey report; the public version is limited to highlights and major findings.
We welcome your participation in the survey. The On-Line Survey should take 20-25 minutes tops, and one lucky recipient will receive an iPad 2 as a token of our appreciation (make sure you include your contact info if you want a shot at the iPad).

Jun
11

Health reform – job killer?

Posted by Joe Paduda on Monday, June 11th, 2012 | Comments

One of the concerns expressed about health reform and the additional financial burden it places on employers – particularly smaller employers – is that it will lead to fewer jobs as bosses cut employees to reduce expense.
Fortunately, thanks to the forethought of Massachusetts’ legislators and then-governor Romney, we have a “lab’ that’s providing real-world information on the cost and impact of health reform.
On the employment issue, it appears there’s no negative effect in Massachusetts. [opens pdf] According to research published by the Robert Wood Johnson Foundation, Massachusetts’ employment data indicates the employment picture post-reform was not negatively affected by that reform;

  • “Declines in private-sector employment were consistent across the states–falling 4.4 percentage points in Massachusetts, compared to 4.8 percentage points, on average, in the rest of the nation.
  • The employment ratio in medium-sized firms with 50-499 employees fell by 1.9 percentage points, compared to 2.2 percentage points in the rest of the nation.
  • Even when accounting for firm size, industry, and job and worker characteristics, the trends in Massachusetts are similar to those in the nation as a whole.”

The study itself was quite robust, delving into worker types, skill levels, age, full time v part time, and education level. Across the board, there did not appear to be any difference in employment trends – after implementation of health reform – between Massachusetts and the four states used as a comparison basis.
There’s another aspect to this issue that bears mention.
Small employers, and sole proprietorships (like my firm) are finding it increasingly difficult to get insurance coverage due to insurance underwriting, pre-ex exclusions, and rating practices. And let’s not get into the application process, which is akin to applying to college and for US citizenship in terms of the information required and length of the process.
At some point these individuals and firms may move to Mass to ensure ongoing access to health insurance. They’ll bring their tax dollars too. I know of one new company forming in Mass specifically to ensure the partners’ families have access to insurance without exclusions.
What does this mean for you?
Unintended consequences can be good, too.

Jun
6

Texas responds…

Posted by Joe Paduda on Wednesday, June 6th, 2012 | Comments

My post earlier this week about the new opioid prescriber audit program recently announced by Texas’ Department of Insurance generated a rather interesting back-and-forth with TDI staff.
First, they were “disappointed” I didn’t post their entire response to the questions I emailed to TDI. There are a couple reasons for this:
1. TDI’s email response read like boilerplate, didn’t directly answer my five questions, and only indirectly answered three (I only figured this out after reading and re-reading the response several times; it was pretty convoluted).
2. I don’t post responses as a matter of course; if they are germane and responsive, I may well do so.
3. I received inconsistent guidance from TDI re the purpose of the audit – which is more accurately described as a peer review of 15 physicians’ prescribing patterns and comparison of those to guidelines. Nothing wrong with that audit, but as I noted in the original post, TDI’s reviewers will “have a good perspective on prescribing patterns for 15 docs, but…to what end?” The language in their email led me to believe the purpose was enforcement, but I was told that the purpose was actually “quality care for injured workers” (or words to that effect) – before I was told no, it was actually enforcement (in another communication). So, with no clear guidance, it was kinda tough to figure out the purpose of the audit.
Second, Amy Lee took me to task for neglecting to mention TDI had – in fact – published system-wide research on the types and usage of drugs in Texas. Lee was correct as I should have noted TDI has published results of two studies, one in 2011 and one here – (for some reason the embedded link doesn’t work) www.tdi.texas.gov/reports/wcreg/documents/Pharmaceutical_Prese1.ppt.
There was a lot more to the back-and-forth, but there’s no point in recounting the “he-said, she-saids”.
Instead, I’d suggest there are a couple take-aways.
1. I’ll continue to work to be more careful in giving credit where credit is due.
2. I never got an answer to my questions; why limit this to 15 docs?; and why not look at docs who prescribed meds for claimants with other prescribers? I’m still wondering, as are many others.
As I noted Monday, “payers have been required to report all manner of information to Texas for several years, with rather draconian penalties for failure to report. With this wealth of data, gathered at great expense and at no small cost to employers and their payers and vendors, it should be relatively simple to provide in-depth information on prescribing patterns around the entire Lone Star State. These data could be case-mix adjusted as well, something that isn’t mentioned in the TDI announcement on the current project.”
Now THAT would be helpful, and provide policymakers and other stakeholders with a wealth of information. While TDI did publish some research, in relation to controlled substances it was limited to system-wide script types, counts, costs, and number of claimants using (or more accurately billing for claimants dispensed) those drugs. There’s so much more that could be gleaned from the data; regional- or area-specific differences, scripts by type of injury, duration of care, case-mix adjusted comparison of claimants prescribed and not prescribed controlled substances, scatter plots or line plots of physician prescribing volumes by any number of variables…you get the picture.
Which leads me to point 3.
3. This all could have been avoided if TDI had responded to my query with direct answers. If that wasn’t possible, they could have called and said, hey, thanks for the query, but for reasons A, B, and C we can’t tell you that. Trying to get media – even we lowly bloggers – to play “find the answer in the vaguely-worded boilerplate” may sound like fun but in the end this hurts a lot more than helps.
You end up with a confused and frustrated writer, where you could have had another media outlet describing your yeoman efforts to improve things in your comp system.
FWIW, my original query, followed by TDI’s response is below.

Continue reading Texas responds…

Jun
6

NCCI’s new narcotics report – the highlights

Posted by Joe Paduda on Wednesday, June 6th, 2012 | Comments

NCCI released their latest research on the use of opioids in workers comp, and the news is chilling indeed. And there’s one outstanding puzzling conclusion.
Here are a few of the key take-aways.
– Per-claim narcotic costs have increased (almost doubling from 2001 – 2009)
– Far more claimants are getting narcotics early on in the claim now than in the past
– One percent of claimants taking narcotics use 40% of all narcotics
– Initial narcotic use (how much and how potent) is a good predictor of future use
One of the more (initially) surprising findings was somewhat counter-intuitive; narcotics’ share of total WC pharmacy spend is relatively stable. How can this be? If narcotic costs are going up and usage is going up and more claimants are getting narcotics now than in the past, how is this possible?
I will speculate this is directly related to the explosive growth in physician dispensing of repackaged drugs, and the much higher cost-per-pill of these drugs. Simply put, repackaged drugs are adding about a billion dollars a year (and growing) to employers’ work comp costs. The impact of the growth in physician dispensing far outstrips that of narctoic usage.
My educated guess is physician dispensed drugs will account for a third to forty percent of all drug costs in work comp this year.
Back to the study and the implications thereof.
This is yet another wake-up call to legislators, regulators, payers, PBMs, employers, physicians and claimants and claimant advocates. There is far, far too much usage of opioids in workers comp. Most of these drugs were developed solely for treating breakthrough cancer pain, a diagnosis all but non-existent in work comp. These drugs lead to addiction and dependency while having limited impact on pain while doing next to nothing to improve functionality.
So, why are we/you allowing this to happen?

Jun
4

Texas’ workers comp opioid audit program

Posted by Joe Paduda on Monday, June 4th, 2012 | Comments

States are starting to study opioid prescribing patterns – and well they should.
Last week, WorkCompWire arrived with an update on Texas’ plans to assess opioid prescribing patterns for work comp claimants in the Lone Star State. Actually, this isn’t an assessment of prescribing patterns, but rather a very limited review/audit of the top 15 physician opioid prescribers – with some major exemptions.
The opioid audit plan [opens pdf] covers claims with dates of accident in 2010 where the initial opioid prescription was less than 10 days from the date of injury; there’s more than a 30 day total supply of opioids for the injured employee; and the physician audited was the health care provider prescribing opioids to the injured employee.
I asked TDI (via email) why the audit was limited to 15 physicians, when and if the names of the top 15 prescribers will be published, why they aren’t looking at multiple prescibers, and what they will do with the results. The initial response was boilerplate and did not address those questions.
If there’s more follow up (I asked again) I’ll let you know.
The very limited nature of the audit is puzzling; payers have been required to report all manner of information to Texas for several years, with rather draconian penalties for failure to report. With this wealth of data, gathered at great expense and at no small cost to employers and their payers and vendors, it should be relatively simple to provide in-depth information on prescribing patterns around the entire Lone Star State. These data could be case-mix adjusted as well, something that isn’t mentioned in the TDI announcement on the current project. It is entirely possible the Medical Quality Review Panel will do that, but the memo from TDI says the Panel will “assess the medical necessity and appropriateness of prescribing opioids incases selected for this Plan-Based Audit by using their professional expertise and knowledge…”
In fact, case-mix adjusting may be irrelevant, as it doesn’t appear this is a statistical analysis, but rather a kind of peer review.
I’m a bit puzzled as to the intent and outcome of this effort.
While it is admirable to evaluate opioid prescribing, it’s unclear what the reviewers or regulators or enforcement authorities or employers will do differently after the audit.
They’ll have a good perspective on prescribing patterns for 15 docs, but…to what end?
Perhaps this is intended to be a warning shot across the bows of prescribing physicians, letting them know that high prescribers may come under scrutiny at some point. That’s purely conjecture on my part, as I’m not sure I understand the utility of the audit as currently described.
California, for all their ills, has done a creditable job studying and reporting on the physicians’ opioid prescribing patterns. The multiple reports, discussions, and publications resulting from CWCI’s research have led to a much better understanding of the dimension of the issue in California, one that may well have been instrumental in the state fund’s decision to incorporate prescribing practices in network contracting requirements.
I look forward to more dialogue with TDI, and will keep you posted.