What is the most concerning issue in workers compensation? Rising prescription costs? Claims fraud? For many insurance providers and business owners, the answer is much darker: opioid misuse and addiction. Learn more about what this problem costs and what can be done about it.
According to the NCCI Workers Compensation 2016 Issues Report, the work comp industry spends about $33 billion annually in medical expenses. The portion spent on prescriptions is difficult to nail down, but it ranges from about 13-18 percent, or $4 -$6 billion. Drug cost inflation has been decreasing for the past several years, but in terms of importance it’s still on par with other medical expense issues, according to NCCI survey respondents including: state funds, insurance carriers, self-insured employers, and third-party administrators.
An issue even more significant than cost is the opioid crisis. Respondents voiced that opioids are an “extremely significant problem,” rating it 4.75 on a five-point scale. Their biggest concern? Risk of addiction or dependency for injured workers.
A study released in early March revealed some big problems associated with opioid use among injured workers. The Workers Compensation Research Institute studied data from 2008-13 from 28 states, and discovered that long-term use of opioids triples the duration of temporary disability among people with work-related, nonsurgical, lower-back injuries, compared to those with no opioid use.
We know that returning to work sooner than later benefits employees in many ways, like retaining full earning capacity, staying on a regular schedule, and having a sense of security, stability and independence. Prolonged reliance on the disability system can negatively impact injured workers.
Missouri ranks 14th in opioid prescriptions, averaging about 80 prescriptions per 100 people (compared to the national average of about 66). According to the National Safety Council, nine out of 10 opioid users said they were unconcerned about addiction—but almost 60 percent of them reported at least one addiction factor.
Solutions reveal more concerns
Abuse-deterrent meds may be effective, but expensive
One way the pharmaceutical industry has tried to tackle the opioid epidemic is by developing abuse-deterrent opioids. These pills, which hit the market in 2010, are harder to abuse—they can be coated or infused with polymers to deter crushing, or even designed to release gooey or euphoria-blocking substances when cracked open. However, the data about their efficacy is unclear, and there’s a big barrier to widespread adoption: they cost about twice as much as conventional narcotic pills. The FDA has conveyed commitment to expanding availability of abuse-deterrent opioids, but some advocates say it’s not a fix-all, and a larger issue remains to be addressed.
Physician dispensing inflates cost and usage
Connected to increased narcotic use is a growing concern with physician dispensing, which is when the prescribing doctor dispenses drugs out of the office rather than having the patient fill them at a pharmacy. It accounts for about 12 percent* of drugs dispensed, and can quickly inflate drug costs anywhere from three to ten times the amount of a pharmacy fill. Recent studies have associated physician dispensing with more opioid prescriptions for longer periods, and poorer claim outcomes. This may be because injured workers often see multiple doctors who don’t know each other’s prescribing patterns, making it easier to have multiple narcotic prescriptions filled—especially if they’re dispensed in-office.
Case study: How MEM prevents misuse and addiction
In 2017, less than three percent of MEM’s medical expenses were spent on pharmaceuticals. Compared to the 13-18 percent industry standard.
Controlling expenses with generic efficiency and mail order reduction
For general expense control, MEM emphasizes generic use when possible. This tactic is no secret; NCCI respondents had a 97 percent generic efficiency rate—the portion of prescriptions filled as generic when the option was available. MEM’s rate is 99.3 percent. MEM also avoids promoting the use of mail order prescription services for injury-related medications, which are often temporary. Mail order services typically fill a 90-day supply even if the patient needs the medication for a fraction of that time, which can cause the insurance carrier to pay more than necessary. MEM’s significantly lower pharmacy spend indicates fewer narcotics prescribed to patients who do not crucially need them.
Addressing the opioid problem
To combat opioid addiction risk, MEM restricts narcotic prescriptions to an initial fill of 15 days. A standard prescription is 30 days. For many injuries, this is far more medication than necessary, leaving patients to either take more opioids than required, or end up with extra pills sitting around.
What really sets MEM apart is its extensive narcotic prescription review process with checks and balances. Most carriers have high-risk claimant identification and some pharmacist claim review. MEM’s internal process for a narcotic prescription incorporates these and takes the review further with the following method.
Any time a physician prescribes a narcotic for an injured worker under an MEM claim, a prospective review is done by:
- MEM adjuster
- MEM nurse case manager
- Third party: CorVel, MEM’s pharmacy benefit management partner
MEM uses CorVel’s clinical modeling program to analyze data. For this process, MEM sends bill review and prescription data through CorVel’s proprietary analysis system, where individuals and prescriptions are flagged against a few dozen criteria. For example, the system might flag individuals who’ve been on narcotics for more than 60 days, or narcotic prescriptions with multiple prescribers. The system gives each individual a score and lists the flags. MEM gets this information back and takes action.
All medications are processed through MEM’s unique workers compensation formulary to ensure that medications are appropriately dispensed. Retrospectively, the provider network manager reviews all narcotic prescriptions and works with MEM’s claims team to ensure appropriateness. Sometimes, this analysis indicates that a prescribing provider may benefit from a peer-to-peer review. In these cases, a CorVel physician reviews medical records and contacts the provider for a discussion about the appropriateness of an opioid prescription. MEM’s medical management team also works closely with physicians to discourage in-office dispensing, especially for narcotics.
What’s next: Moving the industry forward and what business owners can do
Most states have an institutional prescription drug monitoring program (PDMP). Last summer, the state of Missouri implemented a program that monitors prescriber activity. This program is helpful because it identifies the prescribers who are inappropriately distributing narcotics. However, many advocate that this level of monitoring is not enough. Programs in other states track individual patients receiving narcotics, so they can’t fill the same prescription multiple times by different doctors. Skeptics argue that Missouri’s program focuses more on law enforcement than patient care.
Many Missouri cities and counties have launched their own more extensive PDMPs, but there is limited evidence that these programs affect the number of overdose deaths. According to the Missouri Department of Mental Health, most of these deaths are related to heroin and fentanyl rather than prescription opioids. However, the connection is clear: more than 70 percent of intravenous drug users started with prescription medications. The Missouri Opioid State Targeted Response project seeks to expand the state’s prevention, treatment and recovery efforts.
These strategies involve manual oversight and dedicated resources. The industry leaders making a dent in opioid misuse are those putting in the work. The medical cost savings balance out the manual work – and helping to reduce the risk of narcotic misuse and addiction is a social responsibility. Integrity is one of MEM’s core values. Each person in the prescription review chain is accountable and knows that if they notice something that needs more attention, they are expected to speak up.
As a policyholder, your medical expenses affect your experience modification factor (e-mod). Lowering an e-mod can have the single largest impact on a business’s work comp premium.
Safety speaks volumes in controlling an e-mod. In the face of opioid over-prescription and unchecked usage, business owners must do all they can to protect employees. Employers should choose a work comp provider with pharmaceutical management programs in place that will help you keep employees off of unnecessary narcotics, and keep insurance premiums low.
*Unless otherwise noted, all data is from the NCCI Workers Compensation 2016 Issues Report