Category: Research

Oct
6

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

Posted by Joe Paduda on Thursday, October 6th, 2022 | Comments

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…

Posted by Joe Paduda on Monday, September 26th, 2022 | Comments

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
23

Friday catch-up

Posted by Joe Paduda on Friday, September 23rd, 2022 | Comments

Here’s what happened while we were all in full September mode…

Heat is much more dangerous than other environmental risks.  It’s also insidious, kills more of us than hurricanes, tornadoes, and floods. In July half of Americans lived in places that had excess heat alerts. And it is going to get worse – a lot worse…go here to find out how it will affect your home.

LWCC’s Jill Leonard, CA Joint Powers’ Jeff Rush and I will be discussing the impact of climate change on workers’ comp at National Work Comp Thursday October 20 at 12:30…see you there.

[I’ll also be on a panel focused on claim fraud mitigation with Change Healthcare’s Bill Barbato and Jennifer Gant and the Las Vegas PD’s Task Force Officer Jefferson Grace; that’s Wednesday October 19 at 1:30. ]

Merrill Goozner wrote a great piece dissecting Amazon’s repeated attempts to enter the health care insurance and delivery space.  The giant is looking to acquire One Medical.

From Merrill…

A recent analysis of One Medical’s 182 medical offices showed they are located in the top 10 percent of America’s most fortunate communities. Its clientele, which stood at 736,000 individuals at the end of 2021, is overwhelmingly urban, wealthy, non-Hispanic white, and college-educated.

My take is the bifurcation of our healthcare world is widening; for-profits continue to focus on the most profitable sector, namely fee-for-service employer plans. These plans pay much more than Medicare/Medicaid while avoiding any responsibility for expensive diagnoses.

If you’re curious as to how much your business is worth, here’s a useful piece offering guidance. Key takeaways:

  • most owners and managers of midsize, privately held companies (family-owned and otherwise) operate from day to day with no clear understanding of their value.
  • A close analysis of your firm’s most important value drivers [is key]: those characteristics of your business that make it unique. Even companies in the same industry and with similar metrics may vary widely on everything from the quality of their leadership to pricing power to brand equity.

Finally, WorkCompCentral’s annual Comp Laude celebration is just around the corner – registration is here – see you there.

Sep
7

Work Comp Pharmacy Week – #2

Posted by Joe Paduda on Wednesday, September 7th, 2022 | Comments

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!

Posted by Joe Paduda on Tuesday, September 6th, 2022 | Comments

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
31

On chronic pain and opioids, California’s State Fund is getting it done.

Posted by Joe Paduda on Wednesday, August 31st, 2022 | Comments

California’s State Fund has made impressive progress in the quest to reduce inappropriate opioid use – progress that has undoubtedly saved countless lives, helped thousands of workers regain their livelihood while protecting their families.

This has been done thoughtfully and carefully, acknowledging that patients taking opioids typically suffer from acute or chronic pain. Helping patients find alternate means of addressing and reducing pain and the impact pain has on quality of life and functionality has been central to the approach.

I’ve written about the State Fund before; I’ve been deeply impressed by its commitment to doing the right thing the right way – and to actually getting those right things done. The Fund’s early efforts were well-designed and produced solid progress.

(And I love their old marketing messaging)

That hasn’t always been easy; as a governmental entity the State Fund has multiple constituencies with sometimes differing or even conflicting priorities. Despite those challenges, the people at the State Fund – and their vendor partners – are making a real impact on workers in the Golden State.

The latest is continued success in reducing the use of opioids while addressing patients’ pain. Under the leadership of Medical Director Dinesh Govindarao MD MPH and Medical Management Director Alma Del Real, the good people in the State Fund’s medical management and claims departments implemented a three-pronged approach;

  • early prevention and intervention in new cases;
  • addressing relapse (patients returning to use opioids after a period of no opioid usage) and delayed recovery response; and
  • reduction of chronic opioid usage in existing cases.

The results make it clear that the approach is working:

  • From 2014-2021, State Fund saw a nearly 80% decrease in the number of claimants on any opioid prescription and a 4.6% decrease from 2020-2021
  • The number of patients taking high doses of opioids (80+ MEDs) for more than three months has dropped 91% from 2014-2021

The State Fund’s approach to chronic pain has been an “all of the above” strategy, supporting pretty much any type of treatment or modality that might help patients address pain, improve functionality and get back to being fully alive.

What does this mean for you?

We in the workers’ comp industry take our lumps – and often for good reason – for being too conservative, not forward-thinking or innovative, hide-bound by policies and procedures and too slow to adapt to a changing world.

Yet work comp led the nation’s efforts to address the crisis of opioid overprescribing, delivering impressive results long before our colleagues in group health and governmental programs had made any meaningful progress.

 

Aug
18

WCRI’s Primer on Behavioral Health Care in Workers’ Comp

Posted by Joe Paduda on Thursday, August 18th, 2022 | Comments

is one of the most important papers WCRI  has published in recent memory.

Authors Vennela Thumula PharmD and Sebastian Negrusa PhD have produced a comprehensive analysis of the subject, one every work comp manager, claims exec, regulator clinician and risk manager should have within easy reach.

Among the topics addressed are:

  • How do you define behavioral health in the context of workers’ compensation?
  • What are psychosocial factors and can they be a barrier to recovery following a work-related injury?
  • How important is early screening for psychosocial factors and other mental health conditions?
  • What non-medical and medical interventions exist to help those with behavioral health problems?

I’m working my way through the study; it has reinforced my belief that mental health/behavioral health issues/concerns are likely the primary barrier to recovery.

Chief among these are psychosocial factors that may impede recovery;

      • poor recovery expectations
      • fear of pain\catastrophizing
      • perceived injustice
      • pessimism
      • general fearfulness
      • job dissatisfaction
      • lack of family/social support systems

Friend and colleague Bill Zachry has long noted that Adverse Childhood Events can be a key obstacle to recovery  – in fact research indicates victims of abuse are more likely to be disabled during adulthood.

The paper also provides state-by-state details on coverage of mental stress and psychotherapy issues and the status of BH specialists as treating medical providers.

I’d be remiss if I didn’t note Carisk’s David Vittoria has been a persistent voice advocating for increased focus on BH issues. (Carisk is an HSA consulting client)

The study is free for WCRI members; there’s a nominal cost for non-members. Get yours here.

What does this mean for you?

Read this paper.

Aug
17

Climate change’s hidden impact on workers’ comp

Posted by Joe Paduda on Wednesday, August 17th, 2022 | Comments

Storms are more intense and more frequent; so are droughts. Everywhere is getting hotter. When it comes, rainfall is more intense.

The direct impacts of climate change on workers’ comp are pretty obvious:

  • higher risk for public safety workers;
  • increasing heat exposure and associated risks for agriculture, construction, forestry and other “outside” workers;
  • more infrastructure and construction work and associated payroll to rebuild and adapt

[Jeff Rush from California Joint Powers, Louisiana Work Comp Corporation’s Jill Leonard and I will be talking about climate change’s impact on workers’ comp at the National Comp Conference in Vegas) – mark your calendar for 12:30 on Thursday October 20.]

Thinking about this, there are both acute and chronic issues at hand; Fire, flood, and storm are acute events. This requires a crisis management approach; anticipate, prepare, triage, respond, recover.

Heat is different – it is chronic; unlike events it is pervasive, consistent, slowly increasing. This requires a more traditional risk management approach; assess, evaluate impacts, plan, educate, train, monitor, report, improve.

There are other hidden impacts, ones that payers would do well to think through.

For example…let’s use Hurricane Harvey which hit southeast Texas in 2017 causing $125 Billion in economic damage. As human-caused climate change increased Harvey’s severity by 30%; climate change’s added cost ran well into the tens of billions for that one storm alone. For a very detailed discussion of this see here.

photo credit CNN.com

Research published in the Harvard Business Review found:

  • 90% of businesses in the area surveyed by the researchers lost revenue due to Harvey;
  • 40% of businesses experienced property damage of which
    • over a a quarter were closed for a month, and
    • one out of eight were closed for more than three months.

Think about the – 1/8th of businesses are closed for more than a quarter, a time when payroll is likely non-existent – or close to it.

No payroll, no premiums.

Well, you may say, insurance covered that.

Nope – only 15% of surveyed firms got a payment – of any kind – from insurance.

What does this mean for you?

The more you think about human-cause climate change, the more impact you find.

Aug
12

Health insurance saves lives

Posted by Joe Paduda on Friday, August 12th, 2022 | Comments

A just-released study shows people with health insurance are a little less likely to die than those without insurance. 

That is not surprising; preventive care, access to medications to control diabetes, hypertension, depression, cancer and the like, and early diagnosis of potentially life-threatening diseases are all going to keep people alive longer.

From the study:

The study approach taken by the research team bypassed concerns raised against previous non-experimental research on this topic.

The outreach intervention was a joint project designed primarily by the Treasury Department’s Office of Tax Analysis, funded by the Department of Health and Human Services (HHS), and implemented by the IRS.

What does this mean for you?

Health insurance saves lives.

For workers’ comp, the implications are clear – workers who have health insurance are likely to be healthier than those without – and therefore more likely to recover from occupational injuries or illnesses.

Aug
5

Jobs…but…

Posted by Joe Paduda on Friday, August 5th, 2022 | Comments

Over half a million jobs were filled in July, far exceeding expectations.

We have now recovered every job lost during the pandemic – a darn impressive record given inflation, higher interest rates – the unemployment rate now matches its 50 year low. 

Things are looking pretty good, although people remain  concerned about inflation. The good news there is fuel prices have dropped appreciably over the last few weeks, with gas prices falling 50 days in a row.

The result is a very mixed economic picture, although things seem to be trending in a positive direction on the inflation front.

What does this mean for you?

More jobs -> more payroll.