Nov
4

19 years ago

I wrote my first post on opioids and workers’ comp. Almost two decades later, the post – which was really an excerpt from a Workers’ Comp Insider blog post – is terrifyingly prescient.

Interesting item from Workers Comp Insider today:
There is an interesting convergence of issues concerning the pain killer, Oxycontin. Originally developed to combat cancer pain, Oxycontin has been aggressively marketed over the past three years by its manufacturer Purdue, to the point where the drug is now the pain-killer of preference for work related injuries. This drug is twice as powerful as morphine and, while not technically addicting, it can create withdrawal symptoms when a person stops taking it. According to a study by NCCI, Oxycontin is prescribed for pain in 69% of permanent partial disability cases. This same study also points out that 49% of these prescriptions go to people with back injuries. When you combine that with the next interesting piece of data – Oxycontin is almost always dispensed in 50 day supplies (100 tablets) — you have a potentially volatile mix.

Kudos to Tom Lynch and Julie Ferguson for their early warning.

Dr Steve Feinberg sent me a note re the CDC’s just-released update to opioid guidelines; there’s a lot to unpack here. A couple of key takeaways.

  • the guidelines were just that – guidelines. In far too many instances they were used to define hard limits, which was wildly inappropriate and completely inconsistent with CDC’s guidance.
  • this from Christopher Jones, acting head of the CDC’s National Center for Injury Prevention and Control and a co-author of the updated guidelines:
    • “The guideline recommendations are voluntary and meant to guide shared decision-making between a clinician and patient…It’s not meant to be implemented as absolute limits of policy or practice by clinicians, health systems, insurance companies, governmental entities.”

What does this mean for you?

Pay attention to early warning signs and don’t over-react.


Oct
6

Work comp drug spend – profiteering rampant in LA FL and PA

WCRI’s webinar on interstate variations in drug payments reminds us that lax regulations and absent legislators cost taxpayers and employers millions.

Slides are here – and are free to access. The report itself is here – available free to members and a nominal fee for non-members.

There’s a ten-fold variation across the 28 states studied by WCRI, with WI MN and MA around $22 in quarterly drug spend per claim, but LA and FL right around $200. A far higher percentage of claimants get scripts in the two high-spend states than in those on the lower end – and I’ll bet most of those are from dispensing physicians and attorney-represented workers using mail-order pharmacies.

WCRI looked at data from non-COVID claims less than 3 years old in 28 states from Q1 2018 to Q1 2021.

Top takeaway – overall quarterly drug payments dropped from $102 in Q1 2015 to $68 in Q1 2021 – but PA FL and CT – states with physician dispensing and/or mail order pharmacy problems – actually saw an increase – and that increase was largely driven by dermatological agents.

Want more evidence of the rampant profiteering enabled by lax regulations and compromised legislators?

  • Dermatological payments account for about 20% of payments in the median state – although there’s a wide variation, from 6% in the lowest state to over half (52%) of payments in the highest state.
  • These dermatological agents are almost always combos of lidocaine, menthol, diclofenac sodium and other generics – profiteers mix ’em up and bill at a huge markup.
  • PA is especially egregious – the vast majority of these dermatologicals are pharmacy-dispensed, and the average price paid was over $300.
  • Physician dispensed drugs accounted for more than half of drug costs in several states including Florida
  • It’s not just dermatologicals…California saw a big jump in NSAIDS driven by fenoprofen and ketoprofen…both questionable medications that have become darlings of the physician dispensing/mail order profiteers.

There’s good news too…after dermos, NSAIDs have the next highest payment across all drug groups at 18%…while opioids account for about 7% in the median states – way down from 13% in the same quarter three years ago.

I’d note that this is for claims <3 years old, and likely reflects the successful effort to avoid prescribing opioids to patients better served by other therapies.

What does this mean for you?

PA FL LA and CT  – stop screwing employers and taxpayers.

 

 


Sep
26

Watch out for gabapentin…

The CDC recently reported gabapentin was involved in one out of every ten fatal overdose deaths in reporting states.

Similar to opioids, gabapentin can cause severe breathing difficulties  – which are exacerbated when the drug is combined with other central nervous system depressants (CNS) (e.g. opioids, antidepressants, antianxiety meds).

Illicit use of gabapentin appears to be on the rise…from JAMA:

Gabapentin can produce feelings of euphoria and intoxication and can potentiate opioids’ effects. Individuals who misused the drug reported multiple reasons in a 2019 study, including a desire to enhance the effects of opioids; to achieve a “high” when preferred substances were unavailable, such as when they were living in a treatment facility or were incarcerated; or to self-treat withdrawal or pain. [emphasis added]

Gabapentin is a non-scheduled drug which became much more widely prescribed as opioid scripts declined.  Back in 2018 one out of five chronic pain patients were prescribed gabapentin (or its cousin, pregabalin). There’s some evidence that misuse of gabapentin – which is almost always prescribed off-label – often occurs after the consumer had a prescription for the drug.

And, Parke-Davis, manufacturer of Neurontin – the brand name version of gabapentin – pleaded guilty to promoting off-label use and paid a $430 million fine.

So, what to do?

First – learn more.  Start here – myMatrixx’ Shanea McKinney, PharmD penned an excellent overview way back in 2019.

Then…

  • Dig into your data – what’s been happening with gabapentin?
  • When and where possible, require prior authorization for gabapentin and similar drugs.
  • Educate patients and caregivers about potential risks of the drug.
  • Pay special attention to patients prescribed gabapentin off-label and in combination of other CNS depressants.
  • Consider recommending urine drug testing for gabapentin patients and include it in  the drug test panel.

What does this mean for you?

This looks awfully familiar. 

 


Sep
9

If only Florida was like California

If only Florida (‘s commitment to patient safety and responsible prescribing and good workers’ comp medical care) was like California.

But…no.

The Sunshine State’s work comp regulators and legislators don’t seem to care about patient safety or employer/taxpayer costs – at least not when it comes to drugs.

 

If they did, payers wouldn’t have to:

  • pay an upcharge for physician-dispensed drugs,
  • argue that physicians aren’t pharmacists (yes, really),
  • argue that drugs dispensed by physicians should be evaluated for patient safety

Kudos to myMatrixx for weighing in on this and attempting to get insurers and employers involved. Alas if history is any indication, the vast majority of insurers won’t.

Neither will most employers.

I get workers’ comp premiums will continue to decline, leaving fewer and fewer dollars for administrative tasks, like, you know, government affairs.

I get workers’ comp is hugely profitable.

I also get that this will change – and when it does those insurers will be looking for nickels in the couch cushions – nickels (and dimes and dollars) they ignored when things were going great.

Right now, payers and employers need to weigh in and tell Florida regulators that Physicians are NOT pharmacies – and therefore patients don’t get to pick a physician to be their pharmacy.

This is a major patient safety issue; physician-dispensed drugs aren’t subject to many of the electronic edits that pharmacy-dispensed drugs are.

So, physicians are almost certainly giving patients drugs that:

  • duplicate patients’ other scripts
  • conflict with patients’ other scripts
  • aren’t appropriate for that patient.

What does this mean for you.

Fight your own battles. I’m not going to do it for you.

From a post way back in 2014…

There is NO reason, no rationale, no logic behind docs dispensing drugs to workers comp claimants.  

Proponents claim it is better care, leading to speedier recovery and lower costs.

We long suspected the opposite is true; that is, claimants getting drugs from docs get more treatment, incur higher medical costs, are out of work longer and run up bigger claim costs than claimants with the exact same injury who don’t get pills from their physicians.

Thanks to CWCI, we know that’s the real impact of doc dispensing.

Now, we know even more – we know that dispensing docs prescribe more opioids for longer times, thereby increasing the risk of addiction and drug diversion and overdoses and death.  Thanks to a research paper authored by Johns Hopkins University Medical School and Accident Fund, there’s clear and convincing proof that doc dispensing is a highly risky, very dangerous, and very expensive proposition.

Here is the money quote:

“we found 39% higher medical costs, 27% higher indemnity costs, and 34% higher frequency of lost-time days associated with physician-dispensed versus pharmacy-dispensed medication. We found even more striking differences related to physician-dispensed opioids versus pharmacy dispensed opioids. The effect was nearly doubled and revealed 78% higher medical costs, 57% higher indemnity costs, and 85% higher frequency of lost-time days associated with physician-dispensed versus pharmacy-dispensed medication. [emphasis added]


Sep
7

Work Comp Pharmacy Week – #2

Yesterday we kicked off Workers’ comp pharmacy week with a quick review of WCRI’s latest research.

Today we’ll focus on our annual Survey of Pharmacy Benefit Management in Workers’ Compensation. We’ve been doing this for (gulp!) 19 years, and I’m (belatedly) ready to begin the 2022 Survey. Past public versions of the Survey are available here; there’s no cost and no registration necessary.

Respondents receive a more detailed version to reflect their contribution to the effort.

Top takeaways from last year’s report included:

  • Total work comp drug spend for 2020 was about $3 billion, or about 10% of total medical spend.
    • The percentage decrease from 2019 to 2020 was 12.3%
  • That’s down from $4.8 billion a decade ago.
  • Opioid spend declined 19.3% from 2019 to 2020; Opioids accounted for 17% of total drug spend across all respondents.
  • Pharmacy management remains important despite these decreases, primarily due to respondents’ view that drugs have a disproportionate influence on claim outcomes and disability duration.

Over the next few days we’ll be reaching out to past participants; if you are a payer and would like to participate in the Survey (and get the detailed report) please leave a comment below with your contact information (it won’t be published).

All responses are confidential, are only used in the aggregate or are de-identified to protect confidentiality.

 


Sep
6

Work comp pharmacy week!

There’s been a lot of news around work comp pharmacy of late – time to dive into what’s happening, why, and the implications thereof.

No better place to start than WCRI’s just-published study on the latest in drug trends across 28 states. (register here for the no-cost webinar – September 29 at 2 pm eastern). The research looked at trends over the three years from Q1 2018 to Q1 2021 (kudos to WCRI for getting this very recent info out quickly)

Key takeaways from Dongchun Wang, Vennela Thumula, Te-Chun Liu’s research include:

  • Rx payments (all figures are per claim) dropped 15% or more in almost 2/3rds of the 28 states..but went UP in:
    • Connecticut (+22%), Florida (+17%), and Pennsylvania (+14%)(hmmmmm…)
    • notably a major driver of the increase in those states was dermatological agents…driven by physician dispensing and/or mail order pharmacy dispensed drugs in those three states (and others)
  • COVID is a non-factor; COVID claims account for <2% of total Rx costs in most states
  • Other good news – opioids continued to decline in all 28 states – A LOT. As in a decrease of 56% in the median state
  • The biggest drop in spend occurred in New York – a 43% decrease driven by the adoption of a formulary in early 2020.
  • The range in spend is really striking; as of Q1 2021, the lowest state spend for claims with any medical spend was $22 (MA, MN, WI); the highest was almost 10 times higher in – you guessed it – Florida at $201.

So…takeaways

  • States that enable/allow/don’t prevent abusive prescribing and dispensing – looking at you, Connecticut, Georgia, Florida, Louisiana, Pennsylvania, South Carolina – and others – are allowing grifters and thieves to steal money from employers and taxpayers while over-treating patients. 
  • Lotions aka dermatological agents are almost entirely a (pick your term) enabled and perpetrated by physician dispensers and some mail order pharmacies…and the lack of aggressive and useful action by employers and insurers and their lobbyists.

Forecast

Insurers and employers and taxpayers in those states are going to get hammered by these bad actors. Costs for dermatological agents rose more than 50% in PA, CT, SC, FL, GA, VA, NC and MI.

Given the lack of an effective response by payers, their lobbyists and government affairs entities, you can expect more of the same.

What does this mean for you?

  1. Great work on the opioid front – although just slashing opioids is not THE solution to pain – this requires a multi-pronged approach.
  2. re dermatological agents – Do you like getting screwed by profiteers?

Aug
8

The Inflation Reduction Act’s biggest loser

For the first time in about forever, big pharma lost.

One can’t overstate the impact of the-about-to-become-law Inflation Reduction Act on pharma. The most powerful lobbying force in Washington got steamrolled – with one major exception.

Medicare will now be able to negotiate drug prices, a change that will lead to massive savings for seniors (a group I will join next year) and taxpayers alike. This didn’t come without a last-ditch effort by a horde of suits invading the Senate and House…but for once, the invasion was turned back.

Medicare part D was a huge taxpayer gift to big pharma as it covered seniors’ drugs while not allowing Medicare to negotiate prices. This was a giant boondoggle; Christmas, birthdays, anniversary and graduation presents all rolled into one 20 year giveaway. (historians will note this was entirely driven by Republicans – and added $9.4 trillion to the ultimate Federal deficit)

Imagine if you could a) add a huge new market for your services/products and b) set your own prices…why…you could buy that baseball team you always wanted!

Well, at least the insulin manufacturers won. Republican senators blocked a provision which would have capped diabetics’ monthly insulin costs at $35. 

1 out of 7 Americans that need insulin spend more than 40% of their income after food and housing on the drug.

What does this mean for you?

Just when you thought Washington couldn’t do anything – it does something really big and really important. 


Aug
1

Just the facts, ma’am…

Today we’re doing a very quick recap of stuff we learned over the last couple of weeks…no opinion here (yeah that was really hard for me…)

Extra credit for identifying the man in the picture…

But first, for those of us perennially mad at ourselves because, well, we screw up and aren’t perfect, read this. Short take – perfectionism…

“…makes for a thin life, lived for what it isn’t rather than what it is. If you’re forever trying to make your life what you want it to be, you’re not really living the life you have.”

Drug prices

Make for great politics…even when all the caterwauling is wrong. The issue is what we – the consumer – pay is NOT what insurers, PBMs, and other payers pay.

That’s due to the “gross-to-net bubble”, a term popularized by the estimable Adam Fein Ph.D.

When rebates and discounts were factored in, brand-name drug prices declined—or grew slowly—in 2021.

So…you getting those rebate checks?

COVID’s origins

Remember the theory that COVID came from a Chinese lab? It is looking increasingly sketchy.

comprehensive, detailed, and multi-factor analysis by scientists from four continents found

the emergence of SARS-CoV-2 occurred via the live wildlife trade in China, and show that the Huanan market was the epicenter of the COVID-19 pandemic.

The peer-reviewed research published in the journal Science covered molecular epidemiology and spatial and environmental analyses.

Investors and physician practices

Private equity investment in physician practices varies a lot by specialty and region. Quick takes…

  • about 5% of physicians were in private equity-acquired practices
  • The highest percentage was in D.C. (18.2%)
  • More than one in ten docs in AZ, CT, FL, MD, and FL were in PE-acquired practices

The researchers wrote…

“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration may be associated with reduced physician competition, which could lead to increased prices, [emphasis added]

An interactive map and the research report are here.

Gun violence

Gun makers earned over 1 Billion (with a B) dollars from sales of military-style assault weapons over the last decade. A report to Congress found:

  • gun makers marketed to young men by claiming their weapons will put them “at the top of the testosterone food chain”…
  • the weapons were described as an “apex predator”
  • some ads for these weapons “mimic first-person shooter video games popular with children.”

source here

The AR-15 is the most common of these weapons…the NRA named it “American’s Rifle” back in 2016. (and here I always thought it was Davy Crockett’s flintlock rifle…)

(disclosure – I hunt and have several rifles – none are semi-auto like the AR-15)

Workers’ comp physician fee schedules

…are all over the place…Louise Esola at Business Insurance reported on a recent WCRI analysis that found:

About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state…

The study – authored by Olesya Fomenko and Te-Chun Liu and up to date as of this spring – is here. (sorry for misspelling of Dr Fomenko’s  name in  earlier version…darn spellcheck!)

Clearly politics trumps policy…unless someone can tell us why it makes sense for Florida to pay docs below Medicare, while paying hospitals many times Medicare… I’ll stick to politics, campaign contributions, lazy legislators and hand-cuffed or ineffective regulators as the main driver of work comp fee schedules. (oops opinion inserted into post…just can’t stop myself)

Happy August!


Jul
25

A creative way to generate work comp PBM revenue.

The work comp Pharmacy Benefit Management business has become hyper-competitive; total drug spend has dropped 6 of the last 7 years, there’s been massive consolidation of PBMs, margins are declining…all signs of a very mature industry.

Sounds like a not-very-attractive-business…right?

Well, due to accounting rules, PBMs are still wildly popular among work comp service companies.

They love PBMs because the companies get to count the cost of the drugs as well as their margins as top-line revenues – which makes those service companies look bigger than they really are.

The problem is…once you buy a PBM, you get a big one-time increase in revenue. But – and it’s a BIG but, unless you figure out how to grow that PBM revenue in a business that is declining, your top line flat-lines.

If you’re looking to sell your work comp service company, or otherwise tout strong financial performance, that is not a good look. Which brings me to a creative way a PBM is generating script volume without adding new payer customers.

Occ med clinic giant Concentra’s providers are writing scripts that direct the pharmacy filling the script to send it to Mitchell Pharmacy Solutions for administration.  (I looked for a company link, but couldn’t locate any mention of Concentra’s OccuScript program on their website)

According to Concentra, the OccuScript program:

  • has been in place for quite some time;
  • is mostly – but by no means exclusively – used in states where physician dispensing is not allowed (e.g. Texas);
  • appears to primarily address initial prescription fills which are mostly generics prescribed for a limited time;
  • about one of every nine scripts written in the company’s 520 clinics and 120 onsite centers flows through the program. Mitchell is the current administrator, providing network access and the claim adjudication platform. To be clear, Mitchell does not use its own pharmacy network…they contract with Script Care.

Injured workers treated at this clinic may be – or more likely are not – covered by a payer that contracts with Mitchell. (Mitchell is one of several work comp PBMs  – and far from the largest.) If it’s a Mitchell-contracted payer this form/process is helpful indeed.

In an email conversation with Concentra, the company noted “OccuScript supports medication compliance which is fundamental to evidence-based care delivery and positive patient outcomes.”  (note Concentra stated in an email “We have national employer customers whose injured workers are never processed through the OccuScript program…(some payers instruct Concentra on how to process scripts for their injured workers.))

Medication compliance is important indeed, but there are several potential issues/concerns/problems if the injured worker is NOT covered by a Mitchell-contracted payer.

  1. The payer gets a bill from a non-contracted billing entity which adds a lot of work for claims adjusters who have to figure out what to do with it.
  2. Unlike scripts processed by the PBM contracted by the injured worker’s employer/insurer/TPA, the payer finds out about the script AFTER it is dispensed. The drug(s) actually dispensed may – or may not – be:
    1. duplicates of other scripts,
    2. contra-indicated due to other drugs prescribed for the injured worker (while prescribers are supposed to ask about other meds, many patients aren’t able to recall drugs they are taking), and/or
    3. an expensive version of the prescribed drug (there are literally dozens of companies making ibuprofen, many at different prices for the same pill; contracted PBMs control for this with MAC lists.)
  3. The injured worker’s payer/employer/insurer is usually billed at a rate that is higher than their contracted PBM price – sometimes MUCH higher…driving up the employer’s/insurer’s/taxpayer’s work comp costs.
  4. Concentra’s OccuScript contracts with Mitchell who in turn contracts with Script Care…
    1. all of whom have to get paid,
    2. and adding communication challenges as issues have to pass through several entities.

So what to do?

Concentra avers it is ready and willing to work with payers and employers to route scripts to their PBM. It is also interested in working with PBMs. Sure, most “first fills” are “one and done”…but many are not. Getting on the claim as quickly as possible is an industry-wide best practice.

Note – Concentra execs were quite responsive to my queries about the program; kudos to CEO Keith Newton and Charles Bavier – who runs Concentra’s OccuScript program – for jumping on this.

What does this mean for you?

If you aren’t a Mitchell Pharmacy Solutions customer, get with Concentra ASAP to get those scripts routed to your PBM.

For those unfamiliar with this space…Insurers and TPAs hire Pharmacy Benefit Managers (PBMs) to ensure injured workers get the medications they need to recover and return to work. PBMs contract with pharmacies, operate call centers and employ pharmacists – all in an effort to deliver the right drug at the lowest possible price.


May
17

NCCI’s take on medical cost drivers, part 2

Last week I posted on Raji Chadarevian and Sean Cooper’s excellent presentation at AIS.

Here’s my what-this-means-for-you takeaways.

Drug spend decline

While NCCI’s reporting that dollars for drugs now account for 7 percent of annual isn’t too much of a surprise, there are a couple other factors at play here. First, the older claims are, the higher the drug costs.

During the 18-24 COVID months that were generally pretty awful, a lot of high-severity, higher-frequency jobs disappeared. Along with those jobs went a significant number. of high cost and cat claims (fewer workers; fewer claims). In what could best be described as a mirror image of the snake swallowing the pig (you know, the big slug of stuff/incidents/whatever works its way through the system), we’re going to see a long-term decrease in drug spend due to a decrease of X% in long-term claims incurred during COVID.

Obviously this will eventually work its way through the system…that said, it’s just one more bite out of pharmacy spend.

Similarly, rehab care and skilled nursing dollars will also decline along with home health care.

Peak network

With around 75% of physician and other treater dollars going through networks, we are at – or darn near at – peak network penetration. Some states – NY being a good example – are just not going to get there due to regulations on direction and very strong provider lobbying plus employers and insurers just aren’t pushing changes.

To be precise, that refers to overall network penetration – almost all work comp networks/PPOs have carve outs for specialty services.

I make the distinction because specialty network penetration will increase – at the expense of declining PPO penetration in specialty areas (PM, Imaging, DME/Home Health etc.). This will happen because those service areas lend themselves to more active management, often involve proactive scheduling, and  benefit from focused clinical management.

But, again that’s just one reason PPOs aren’t a growth thing – claims counts are declining and medical costs are flat too…

Oh, and big healthcare systems have A) figured out work comp is the golden goose, and B) are increasingly stingy with their discounts.

So, the average net discount after network fees (!!) is significantly lower than it was even five years ago.