RIMS, opioids, and awards to drug distributors’ risk managers

Last month RIMS announced its annual awards; one of the recipients is the risk manager for Cardinal Health, another has a similar role at McKesson.

Awarding awards for excellence in risk management to two individuals at companies with huge liabilities for the opioid crisis, and failing to discuss that liability in press releases is pretty shocking.

Both companies are embroiled in ongoing and likely very expensive litigation regarding their responsibility for the opioid crisis. Cardinal just announced a $4.9 billion loss for the first quarter of 2020, attributing the hit entirely to opioid litigation (the company estimated the cost of litigation at $5.6 billion.

West Virginia is one of the states devastated by rampant overuse of opioids; Pulitzer Prize-winning reporter Eric Eyre just published a book detailing his investigation into Cardinal’s role in the opioid crisis.

According to Eyre, Cardinal “saturated the state with hydrocodone and oxycodone — a combined 240 million pills between 2007 and 2012. That amounted to 130 pain pills for every resident.” All told, distributors shipped 780 million pills into West Virginia over that time.

Cardinal, McKesson, and Amerisource Bergen are the largest drug wholesalers in the nation, acting as the middlemen between manufacturers and retail and mail order pharmacies. While all three contend they are just part of the supply chain, they are required to monitor and report shipments of controlled substances – including opioids, a responsibility that is at the center of the litigation.

(This is not to say the three distributors bear all the responsibility for the crisis – far from it. State health officials, the DEA, FDA, prescribing physicians, opioid manufacturers and others all share in that responsibility.)

From the Washington Post:

McKesson, Cardinal Health and AmerisourceBergen, were in and out of court. They paid lots of fines but kept on trucking. In 2018, their chief executives gave sworn testimony before the House of Representatives Committee on Energy and Commerce: All denied contributing to the opioid crisis. Later that year, the committee released the results of an 18-month study. It found that distributors failed to conduct proper oversight of pharmacies by not questioning suspicious activity and not properly monitoring the quantity of painkillers shipped. [emphasis added]

Earlier this year, McKesson agreed to pay investors $175 million to settle claims that “directors failed to maintain adequate internal systems for spotting suspicious opioid shipments…”  According to Bloomberg, U.S. District Judge Claudia Wilken in Oakland, California said the suit raised:

“legitimate questions about whether directors ignored “multiple red flags” about opioid shipments even after agreeing to step up compliance oversight as a result of a deal with the government.

The settlement, produced in part by a series of mediation sessions, calls for McKesson to add two new independent directors to its board, to beef up compliance training for directors and improvements in internal systems designed to red-flag suspicious orders, according to court filings.”

McKesson is the also the subject of a criminal probe launched by Federal prosecutors in Brooklyn, NY. 

So, the world’s leading risk management organization conferred prestigious awards on risk management professionals at two companies that have massive financial liability – and I would argue ethical responsibility – for what can only be described as a massive risk management failure. And one is the subject of a Federal criminal probe.

I contacted RIMS to inquire about the decision criteria used by the individuals to select the award recipients, stating:

I’m curious as to the decision criteria employed by the award committee that resulted in awards to these two executives. While their accomplishments are impressive and their achievements notable, I’d like to understand how the opioid settlement issue factored into the award decision.

RIMS Communications Director Josh Salter was kind enough to provide an initial response:

RIMS awards are reviewed and selected by volunteers. This group of risk professionals is charged with vetting all submissions and then, using their experience in the profession, making a decision based on the applicant’s accomplishments. While the volunteer group changes from year to year, I will share this information with them.

I asked Mr Salter if he would facilitate a discussion with any members of the committee and offered to keep the names of those members confidential; to date and after multiple requests I have not received a response. [I’m certainly willing to hear from Mr Salter and committee members]

Eyre’s editor, Ned Chilton, coined the term “sustained outrage” to define what he saw as an essential responsibility of news organizations, a demand that media keep the focus on injustices instead of reporting on a calamity and moving on. I’ve been reporting on the opioid crisis since 2005; over the last two years my passion and drive has burned out.

That’s my fault.

I struggle to understand how RIMS could confer prestigious awards for “risk management” on individuals at two huge companies that bear significant responsibility for the opioid crisis – and not even mention the opioid issue in publicity around the awards. This is not to impugn the professionalism, ethics, or abilities of the individuals recognized by RIMS, rather to ask a very uncomfortable question, one RIMS needs to address.

What does this mean for you?

We cannot let crisis fatigue take our focus off opioids.

[PS – kudos to Tristar’s Mary Ann Lubeskie for her ongoing and tireless efforts to keep opioids front and center… you can follow her at @maryannlubeskie on Twitter]





Friday Funday

Another week in physical isolation – no business trips, lots of zooming, plenty of dog walks.

Suzie’s not stressing…

She’s doing the Vulcan mind-meld with brother Louie…

And the pups let Deb borrow the dog grooming tools to clean me up a bit (yes I still have two ears)

Some folks are seeing the bright side…

And others are making the best of it.

Have a sports-free weekend!


COVID catch-up

In  less than 4 months, COVID19 has killed more of us than died in the Vietnam war’s 11 years. Some have stated this is a “great success story.”

Healthcare providers may not see this as such a great success, as COVID is crushing healthcare financials.

Research suggests almost 13 million workers have lost their health insurance due to the repercussions of COVID19. Multiplying that by 2 approximates the total number of employees plus dependents that lost coverage – 26 million.

Many will seek Medicaid coverage, but eligibility varies widely (and wildly) by state. People who don’t have coverage and contract the disease and need facility care should have their bills covered by the Feds – either at Medicare rates or via Medicaid.  Either way, reimbursement is likely half or less what their private insurer would have paid.

Anthem just informed us they expect the percentage of people covered by governmental healthcare plans to increase. The $100 billion+ health insurer saw its financial results for Q1 improve; my guess is the drop in elective procedures was a big factor.

All of this to say that COVID appears to be accelerating a trend towards a public option for health benefits – or perhaps a much bigger role for governmental programs in health insurance.

Hospital financials are getting hammered as elective procedures are way down, and many folks with all kinds of ailments are staying away for fear of coronavirus exposure. (chart from Kaufman Hall)

With receivables drying up to dust, facilities are going to redouble their efforts to collect every nickel they can from everyone they can.

Workers’ comp payers – you are hereby warned.

Willis Towers Watson has been publishing their perspectives on all things COVID19, from the impact on the LGBTQ community to a helpful discussion of paying premiums when cash is tight.

An early piece focused on employers’ considerations re workers’ comp liability for COVID19 claims. One item in particular stuck out – large employers with excess coverage should read their current communicable disease coverage details very carefully.  Friend and colleague Karen Caterino was kind enough to paraphrase for me:

For large employers purchasing excess, a multi-claimant disease incident carries the possibility of creating catastrophic financial loss.  If the transmission of a covered communicable disease is a series of incidents versus a single accident, the difference in retained loss could be significant.  A majority of work comp deductible agreements include a provision stating that the deductible applies per employee for occupational disease.  Some insurers are likely to suggest the statute requires they follow the assumption that occupational disease, by its very nature, is a series of occurrences for multiple claimant losses.

This is especially important for supermarket chains, who by now should know that paid sick leave may be the most effective risk management tool to prevent employee and patron exposure. There are many stories like this one detailing how quick, thoughtful action kept food coming while drastically reducing employee exposure.

NCCI has a helpful compendium of states‘ COVID19-related legislative and regulatory initiatives along with COVID19 FAQs.

And yes, surgical masks are quite effective at reducing viral transmission; thanks to Glenn Pransky MD for tipping me off to this research.

Finally, this is a terrific summary of what we know and don’t about how COVID19 affects the human body. It’s long, very well-written, and perfect for a lunch-time read. Spoiler alert – a lot of treatment these days is based not on extensive research but on what docs think works based on prior experience and communication with other clinicians.

From the physician author:

In the absence of data from randomized, prospective trials, we search for answers on colleagues’ Twitter accounts, in interviews with Chinese or Italian physicians, and in our patients’ charts.

What does this mean for you?

Wear a mask, and physically isolate, because we can’t take much more of this “success.”


When can we re-open?

That depends on when we:
a) can reliably tell people if they’ve been infected, and
b) know that those who have been infected are immune.
Let’s take these in order.
How do you know you’ve been infected with coronavirus?
Outside of the obvious – a positive test that shows the actual presence of the coronavirus, there has been much talk of “antibody” or “serology” tests. You may have seen articles like this one reporting that many more of us have been infected with the virus than we thought.

Not so fast…that assumes the tests used to verify exposure are accurate, ergo, the core issue is “are these antibody tests accurate?

First, there are over 120 antibody tests on the market – few if any vetted by the FDA to determine if the tests are accurate. And some have been shown to be pretty inaccurate, including $20 million worth of tests the UK bought from a Chinese supplier.

Credible research indicates some tests are accurate – and some aren’t.  A study conducted by UC-San Francisco and Cal Berkeley on a dozen of the tests indicates there are an alarming number of false positives – tests that show patients DO have antibodies, when in fact the patients don’t.  That means the tests indicated the patients were infected – when they may well not have been.

Here’s the key statement from the cite below: “a large proportion of those testing positive on an antibody test may not actually have had COVID-19 [emphasis added]” – and thus could be infected – and infect others – in the future.

The good news is the FDA has decided it will begin to “test the tests”; yet another example of the FDA’s new operating principle “Better late than never.

Second, there is no consensus as to the immunity of individuals previously infected with coronavirus to a re-infection. 

This from the actual study report cited above:

Importantly, we still do not know the extent to which positive results by serology reflect a protective immune response. Future functional studies are critical to determine whether specific antibody responses predict virus neutralization and protection against re-infection. Until this is established, conventional antibody assays should not be used as predictors of future infection risk [emphasis added]

What does this mean for you?

Until we know who’s been infected and if they are immune, “opening up” will be a crap shoot.

Scientific rigor is critical, and you MUST read critically. 


We don’t know &^%$*(

Research published in HealthAffairs a study estimating COVID19 will cost somewhere between $164 billion and $654 billion.

Insurance industry trade group AHIP’s financial analysts calculate private insurers will pay between $56 to $556 billion for COVID19-related costs.

Kaiser Permanente in northern California – a plan with 11% market share – had a grand total of 377 hospital admissions for COVID19 in March.

According to the WCIRB, COVID will cost California’s work comp system between $2.2 billion and $33.6 billion.

Private conversations with work comp executives show something much different; COVID19 costs for a major insurer with significant exposure in the healthcare sector total about $1 million incurred to date.  A major state fund has seen less then a couple dozen cases. Multiple insurers have less than 40 cases that have incurred any costs to date.

What’s going on here?  

In a nutshell, researchers are either being forced (in WCIRB’s case) or otherwise decided to come up with analyses based on really skimpy, incomplete, and not-very-helpful data. For example, we

a) don’t know the real infection rate as we aren’t testing anywhere near enough people;

b) we don’t know the real death rate for a bunch of reasons;

c) different areas have been affected very differently. This has been a disaster in Albany GA and NYC…and not even close in most of California, or Alaska. Louisiana has been hit very hard, but neighboring Arkansas hasn’t.

d) different areas have responded very differently; California and Washington shut down early and broadly; New York did not.

e) different areas are different; NYC is very crowded, even California’s most populous cities are a lot more spread out.

f) but even in smaller cities that are more spread out, one infected person can expose a lot of people, resulting in a rapid increase in cases (Albany FGA).

I bring this to your attention just to point out that estimates are pretty useless, that COVID19’s impact is going to be massive in some places and a minor inconvenience in others,

So, look for data that’s specifically relevant to your geographic area and covered population. Figure out if that area is testing enough folks, is complying with common-sense prevention techniques (social distancing, for example), and is reporting data accurately.

And then don’t be surprised if you are really surprised. Because there are so many confounding factors and different things that can affect the numbers, as of now anyone who is projecting is doing this…

What does this mean for you?

Making decisions based on current data is as dangerous as standing near a guy throwing darts blindfolded. 


Funday Friday

This drug may work, then it won’t…testing is ramping up, then it isn’t…we’re going to open up!…then we’re not.

I’m as frustrated and tired of this mess as you are. So, time to bring some joy into the world…

You think you have it rough?

This is Suzie, one of our two Newfoundlands, exhausted after a tough morning cleaning dishes.

And here she is trying to wake my wonderful bride…Deb’s not having it.

Finally, for my friends and colleagues in Florida, California, and other points south – rejoice – you aren’t  here in New York’s Finger Lakes…this was yesterday.

But don’t lose hope…there’s this…


COVID19’s impact on workers’ comp – claim type

While we’re still wrapping our heads around COVID19, it is increasingly clear the pandemic will have implications for the workers’ comp industry that are deep and broad.

Perhaps the most important is the change in claim type.

Historically, 95% of workers’ comp claims were injury-related.

That’s about to change.

While still in flux, the number of states where workers in specific industries that contract COVID19 will be covered by workers’ compensation has hit the double digits, with more considering legislation every day.

Multiple states including IL, CA, KY, AL, WI, MN, NY, NJ, UT, PA, and OH have either adopted broader interpretations of presumption via executive order or legislation or are considering pending legislation. First responders, health care workers, employees of grocery stores and child care centers are examples of workers whose COVID19 infections may be presumed to be occupationally-based (different states include different professions).

Couple that with a national infection count that will almost certainly increase as testing finally appears to be ramping up, and the result will be a lot more disease-based claims.

At the same time, the national shut-down is drastically reducing the number of new injury-based claims – while keeping past claims open longer than normal because patients can’t access care, have their cases adjudicated and/or don’t have jobs to return to.

Everything claims-related has been oriented around injuries; claims intake, medical guidelines, investigation and compensability determination, network physicians and ancillary providers, clinical oversight, bill review, disability rating and determination.

With COVID19 claims certain to become more and more prevalent, the entire workers’ comp ecosystem will have to adapt, and do so rapidly.

Meanwhile, employers and insurers must find ways to get current patients into providers to get treated, get evaluated, and get better. While many have begun to adopt telemedicine, those efforts must be exponentially increased.

With the dramatic drop-off in new injuries, payers should be using claims staff’s down time to connect patients with providers, get telerehab started, schedule appointments out in the future so their patients are first in line when in-person care is back on line.

What does this mean for you?

Seven weeks into this, it’s time to plan for the new reality.


COVID19 Update – what we KNOW now

Social distancing works.  Hydroxychloroquine doesn’t. Remdesivir might.  A lot of “tests” may be wrong…Just because you’ve had COVID you may not be immune to future infection.  And COVID19 may lead to long term health problems.

Social distancing works. 

A study showed social distancing significantly reduces infection risk:

estimated that current social distancing measures will reduce the average contact rate among individuals by 38% “Social distancing saves lives but comes at large costs to society due to reduced economic activity… the economic benefits of lives saved substantially outweigh the value of the projected losses to the U.S. economy.”

Hydroxychloroquine and variations thereof are no cure.

It’s becoming increasingly clear that Hydroxychloroquine and its various versions are no COVID19 cure. One study (that has NOT been peer-reviewed) showed more veterans with COVID19 that took the drug died than those that didn’t. Another study found no difference in outcomes for patients that took the drug and those that didn’t. The drug can have deadly side effects. [my March 27 post has a lengthy and citation-filled discussion of the drug and the faulty “research” used to promote it]


Preliminary data from an analysis of multiple studies shows 2/3rds of patients with severe COVID19 treated with anti-viral drug Remdesivir had “promising” outcomes.

One study in Chicago had positive results as researchers saw “high fevers fall “quite quickly” in remdesivir-treated patients and patients weaning “off ventilators a day after starting therapy.”

This is PRELIMINARY; much work still needs to be done. Additional clinical trials are underway, with one posting results by the end of this month.

Remdesivir is an injectable and to date has only been administered in hospitals.

If you’ve had COVID, are you immune?

We do NOT know. There is no evidence that those who have contracted the disease have immunity from a subsequent infection.  Serology tests look for antibodies in the blood, proteins whose function is to find and kill coronaviruses.

Usually those who have had a disease gain some immunity; that’s the idea behind vaccines. However, there is a report out of China that some patients previously infected tested positive after they were ostensibly “cured”.

There are concerns that tests are inaccurate, that they may show false positives (you aren’t infected but the test results say you are) and false negatives (you are infected, but the test results show you aren’t).

One theory is the antibody tests are hitting on non-COVID19 viruses (like those that cause the common cold) and thus giving false results.

Long term health issues associated with COVID19

There’s growing evidence that people with severe cases of COVID19 may have long-term pulmonary deficits due to compromised lungs.  The most vulnerable are – as you’d expect – older folks, those with pre-existing conditions, and compromised immune systems

A study out of China found about a third of patients that had recovered from severe COVID19 had brain stem issues that manifested as dizziness, headache, seizures and other issues.

Another study found that a fifth of severe COVID19 patients had significant heart issues. Blood clots are also a common problem, one that can be deadly.

PTSD and other mental health problems are also reported – no surprise there.

There have been reports of significant kidney problems, however an earlier study in China found no acute (short term) kidney damage.

What’s clear is we are just starting to grasp the potential long-term health effects of COVID19 – and we will learn a lot more in the coming months.

There is a lot of mis- and dis-information out there, from “cures” to the assertion that 5G towers cause COVID19 to Chinese claims that COVID is a U.S.-caused disease to “evidence” that the virus escaped from a Chinese bio-research lab to ridiculous claims by “scientists’ that all the health problems are caused by an overactive immune system.

This is exactly why one needs to be very careful when reading about drugs, cures, tests, results, and infection rates...almost no one had heard of COVID just 120 days ago, all research is just getting started, and we are all learning as we go. And fear-mongers and charlatans love a crisis and get off on scaring people while they get their 15 minutes of fame.

Oh, and YouTube is NOT a reliable or credible primary source for scientific information.


Are you paying too much for drugs, Part Two

The good news – most workers’ comp payers have seen their drug costs steadily decline steadily.

The bad – many are still paying too much due to poor contract terms.

One of the issues is a failure to update generic drug pricing tables; in several recent PBM assessments the PBM has apparently failed to update pricing tables. The result – the insurer, employer, or TPA is charged what the drug cost as much as 12 months ago. Because generic drug prices continually decrease, the insurer, employer or TPA is paying more than they should.

Meanwhile, the PBM is paying the pharmacy today’s price – which is almost always less than it cost a year ago.

The net  – the PBM makes a bigger profit because it is “buying low and selling high.”

While the “fix” is obvious – ensure contractual terms require updates to pricing are timely – there’s a much bigger issue.

This is just one reason many work comp insurers and employers pay too much for drugs. Pharmacy pricing is opaque at best, requiring a lot of experience and expertise to make sure you’re paying only what you should, updating generic pricing schedules is only one issue.

What does this mean for you?

Are you paying what you should?


Friday catch-up

Happy Friday to all – here’s the non-COVID news of note from the week.

The brilliant minds at WCRI aren’t slacking while WFH (working from home).  Their latest is the 20th edition of the CompScope state-specific reports detailing the performance of 18 state workers’ compensation systems. Free to members…

Also, download a free copy of WCRI’s report on medical prices for services paid in 36 states.

NCCI’s annual meeting is still on for May 12; it kicks off virtually at 1 pm eastern. This is a must-attend for all looking for the latest intel on all things workers’ comp.

Good news and helpful stuff

Gotta love the State Fund of California – the Fund is contributing $25 million to each of two programs ($50 million in total):

  • one for essential workers who contract COVID-19 or are ordered to self-isolate due to a potential exposure. The fund will provide assistance with wage replacement up to 6 weeks and assist any worker without health coverage with uncovered medical costs.
  • the other is for qualified policyholders, it will help defray the costs of safety-related expenses, planned or already incurred, related to protecting their workforces from COVID-19. Get info here – it is first come, first served.

If you are stressed a bit more than usual these days, spend a few minutes with Carisk’s David Vittoria – a wonderfully compassionate speaker – today or early next week by signing up here. (I work with Carisk).

If you’re not entirely comfortable working remote and want to be more effective in those Zoom meetings, here’s some very useful advice. Spoiler alert – we’re all on TV now, and the camera is the key.

For those new to WFH, some useful tips from the Harvard Business Review will help you manage the back-and-forth between work and non-work time; HBR says:

  • plan your day
  • prioritize what’s most important and stick to the list
  • have transition time in the morning to get going, and in the pm to wind down.

If you miss people – I certainly do! – here’s a wonderful piece on how neighbors can connect and stay connected, regardless of how long we’re “apart”.

Finally, JAMA’s allowing free access to a summary of all the drugs currently being evaluated as potential treatment for COVID19. Hat tip to WaPo for the head’s up. [The link is a more readable summary of the JAMA piece.]