Apr
26

Drugs and workers’ comp, part 1

Download the latest Survey of Prescription Drug Management in Workers’ Comp here

Key takeaways

  1. Total drug spend in workers’ comp was likely around $2.9 billion in 2021.
  2. The multi-year decline in drug spend seems to have flattened out; across all 31 respondents spend ticked up 0.82%.
  3. Opioid spend continued to drop, with 2021 figures showing a 12.5% drop over the previous year. Opioids represented 13.4% of all respondents’ pharmacy, the lowest figure in the two-decade history of this survey.
  4. Legacy opioid patients continue to be a challenge for many payers; most have adopted a “we’ll do whatever might help” approach to these patients.
  5. Physician dispensing is once again rearing its ugly head with respondents rating it the single biggest problem in workers’ compensation pharmacy after a multi-year hiatus from that august position.
  6. Payers continue to highly value PBM customer service; myMatrixx continues to lead the industry in that key category.

Media – if you’d like a much more detailed version of the report (which respondents receive) please leave a request in the comment section.


Apr
10

 

WCRI is out with its latest inventory of state regulations re prescription drug management. This is a must-have for claims execs, managed care leaders, medical directors and risk managers…pricing, utilization review, opioid management, formularies and PBM regs are all covered.

Revenue Cycle Management – aka hoovering mounds of cash from workers’ comp payers – is the focus of a “white paper” targeting hospital and health system execs. If you want to know the hooverers’ playbook, sign up and be prepared to be amazed.

A closely-related item…

From the wonderful folks at Kaiser Family Foundation comes the shocking news that facility fees are driving ER costs to the moon. As most of you (hopefully) know, regulations allow any service delivered at a facility to uncharge a facility fee. It is not hyperbole to note hospitals are wildly abusing this, taking on facility fees to services provided at

      • remote clinics
      • physician offices
      • even telemedicine visits

oh, btw, many hospitals are STILL not complying with Federal requirements to post prices…

Finally, from HBR comes this excellent advisory on how not to anger/frustrate/alienate customers…something many worker’s comp entities seem surprisingly good at. (We are NOT looking at you, LWCC…your work on patient engagement is really good stuff)

All too common is the industry’s maniacal prioritization of efficiency over everything else. From HBR:

when focusing on efficiency, many companies overlook the emotional aspect of the customer experience — how customers feel when interacting with the business.

The piece focuses on consumers – which every injured worker is.

What does this mean for you?

Tired of being hospitals’ piggy bank?… then understand facility cost drivers and techniques.

Injured worker engagement is critical to helping them return to functionality.


Apr
7

What we found – the audit results

Our report on the audit of the Department of Labor’s federal employee (FECA) work comp pharmacy program is now public.

Key findings…during the audit period (FY 2015 – FY 2020):

    • 1330 oral fentanyl scripts were dispensed and paid for without evidence of required cancer diagnosis (remember Actiq and Fentora?)
      • that does NOT include any such scripts that were dispensed and paid for BEFORE the audit period
    • over 25,000 scripts that should not have been filled were.
    • Agencies, Departments, and taxpayers spent $300+ million more than they should have because they didn’t use competitive pricing metrics and methods
    • DOL failed to address opioids and compounds in a timely manner…in both cases DOL was years behind the private sector and state government comp programs
    • The FECA program – which is the biggest single work comp payer in the nation – didn’t have a full time medical director OR clinical pharmacist.

Before you ask…we did not assess or otherwise study the potential impact of these findings on injured workers as that was outside the scope of the project.

The audit covers Fiscal years 2015 – 2020; the analysts and pharmacists at HealthPlan Data Solutions did the analytical heavy lifting, crunching data on millions of scripts and reimbursements. HDS handled the clinical questions as well. CompPharma provided a lot of the qualitative assessment and program operational benchmarks. (Thanks to all who participate in our Annual Survey of Drug Management in WC.)

CPA firm HRK was the lead on this (they speak Federalease and have the right credentials to navigate the Federal contracting system).

Note – Haven’t been able to post for days due to server problems (I’m blaming Putin’s hackers)…and as many of you told me (thanks!) the blog site was down for a while as well. Thanks for your patience and keep those emails re service outages coming.

What does this mean for you?

Audits can be really useful. 


Mar
1

Trigger warning…

I love reading CWCI’s Bulletins – even if they make me want to tear my hair out and scream.

The latest from the brilliant analysts in Oakland is an update on 3 unnecessary-and-wildly expensive-drugs-with-no-purpose-other-than-Hoovering-millions-out-of-employers-and-taxpayers’-pockets… these three drugs account for 2% of anti-inflammatory scripts and almost half of anti-inflammatory drug costs.

I wrote about fenoprofen calcium two years ago…

these meds aren’t wonder drugs that grow hair while curing low back pain and strengthening joints and rejuvenating shoulder cartilage…they are similar to aspirin, ibuprofen, and naproxen.

OK, here’s how the scheme works.

Neither drug [Fenoprofen calcium and Ketoprofen] is on the California workers comp drug fee schedule, so employers and taxpayers have to pay 83% of the “average wholesale price”. AWP is a number made up by the drugs’ manufacturers, and can be anything they want it to be.

So, some smart schemers figured out that they could make a shipload of money by a) jacking up the price of a drug that costs pennies to make, and b) convincing a few docs to prescribe it to workers’ comp patients.

The latest from CWCI shows that things have gotten worse...
  • Profiteers increased fenoprofen calcium’s reimbursement from $192 in 2016 to $1,479 five years later.
  • in four years, ketoprofen went from $107 – $1,073 –   a 1000% increase in four years.
  • another drug – etanercept – went from $1,930 in 2012 to $7,716 in 2021.

So…what are you going to do about this?  Wait, this is the first you’ve heard about it?  Well, THIS IS NOT NEW NEWS.

CWCI first reported this two years ago.

WCRI did the same months ago.

What does this mean for you?

You have a fiduciary duty to stop this.

If you have ignored this to date, you should be embarrassed, ashamed, humiliated and

  1. Get a report from your payer/PBM about your spend on these three drugs over each of the last three  years.
  2. Find out what’s been done – or attempted – to address this.
  3. If you – the payer – haven’t done your part, do not blame anyone else.
  4. Regardless…
    1. Identify the docs prescribing this stuff.
    2. Kick them out of your MPN.
    3. Require prior auth for these meds.
    4. Work with your PBM – it probably has an on-the-shelf plan – but do NOT just dump it on the PBM and tell it to fix the problem.
  5. Put a process in place to make sure you are on top of this stuff long before it hits some blog.

Oh, and the CWCI bulletin identifies a bunch of other drugs that are – at best – questionable.


Dec
16

Friday catch-up

Lots happened this week while I was hunting, driving, and finishing up the annual survey of pharmacy management in work comp.

A quick update on pharmacy data points…

  • across the 30 respondents we have so far (a few more to come), drug spend was down one percent...however
  • there’s a ton of variation between respondents with some seeing big jumps and others steep drops in spend.
  • 91% of all scripts are generic…that’s a big increase from a few years back
  • pharmacy is viewed as being just a bit more important than other medical categories such as facilities, surgery, E&M.
  • and opioid spend is down again (YAY!!)

From HBR comes this trenchant observationIn Supplier Negotiations, Lying Is Contagious

“Lying once can be contagious. It can pave the way for lying again in other interactions or negotiations with people at other companies.”

The brief article is intended to provide guidance to buyers, but sellers would do well to internalize the researchers’ observations.

Health spending in the US is almost twice (as a percentage of GDP) as high as other developed countries’.

The graph is here if the pic above is hard to read.

Which means far fewer dollars to spend on wages, R&D, IT investment, and stock dividends – and much higher taxes to pay for civil servants’ health benefits.

Oh, and costs zoomed up in 2020 and 2021 due to COVID…due in large part to staffing shortages and concomitant labor costs.

What does this mean for you?

Next time someone starts comparing US healthcare to those with national systems, ask them if they have any idea how much more money we spend than those “socialists” do.


Nov
30

The state of work comp pharmacy

is pretty good.

Here are the very preliminary takeaways from the latest Survey of Prescription Drug Management in Workers’ Comp...so far 21 phone interviews completed and several more still to go.

[if you’re new to MCM, we’ve done an annual Survey since 2004, past public reports are here (respondents get a much more detailed version)]

  • Drug spend continues to decline, although at first blush it looks like the drop is less than we’ve seen in recent years
  • Opioid spend is also continuing its downward trend
  • Generic efficiency – the percentage of scripts that could be filled with generics that are filled with generics – is just shy of 100%
  • Payers are still struggling with legacy opioid patients with respondents identifying patient resistance (mostly fear driven), recalcitrant prescribers, attorneys and the lack of regulatory/legislative support as key obstacles
  • Physician dispensing is once again rearing its ugly/profiteering/self-serving/taxpayer-abusing head.
  • Payers want more transparency while fully understanding PBMs need to make a profit.
  • Topicals seem to be the latest in the scam-a-rama that is the physician dispensing industry.
  • Respondents are generally very open to non-pharmaceutical approaches to pain management – much more on this in a future post.

What does this mean for you?

PBMs and payers  – well done. Your work has saved countless lives while helping countless others regain control of theirs.

 


Nov
22

Work comp pharmacy…

has changed dramatically in the last 18 years.

Costs are much lower, brand drug usage has fallen off a cliff, PBMs are by far the dominant delivery channel, and there aren’t any real problems these days/

At least that’s what I’ve gleaned from doing 15 surveys of work comp execs on their perspectives and quantitative measures related to pharmacy.

Way back when:

Expect we’ll have the latest version of our annual survey in late January; in the meantime (and VERY preliminary:

  • generic fill rates are around 90%
  • generic efficiency is north of 98%
  • inflation trends appear to be negative – for about the 7th straight year.

Yet payers are still concerned about drugs, mostly because they are seen as major contributors to disability duration and recovery.

What does this mean for you?

Its not just the cost – it’s the knock-on effects. 


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.