States are making some progress in controlling the distribution of opioids one of the leading drivers of medical costs in workers compensation insurance premiums but still have a long way to go toward solving the problems caused by prescription drug abuse, according to insurance groups.
The National Conference of Insurance Legislators has been searching for suggestions as it looks for ways to help states deal with the costs of workers compensation opioid prescription abuse. Claims involving opioid abuse are estimated to cost employers $1.4 billion. Insurers are trying to fight the cost of prescription drug claims, which account for 19% of total medical spending and of that, opioids are one-quarter of the total. For claims more than three years old, opioid claims represent 35% of the total. The U.S. Food and Drug Administration calls opioids "powerful medications that can help manage pain" but when abused "can cause serious harm, including overdose and death."
States are attempting to tackle the issue, Bruce Wood, American Insurance Association associate general counsel, director of workers compensation programs, told BestWeek. I think were making progress, he said. The impact of opioid use also extends to a cost abuse issue where drug repackagers work with physicians to drive up prices of physician-dispensed drugs. This in turn not only drives up the overall medical costs, it also delays the employees return to work and drives up indemnity costs, he said. Drug repackaging is when a drug is bought in bulk and repackaged into smaller prescription containers, and often sold at a higher price than the bulk cost.
While states have begun moving to address the problem, no comprehensive state model has emerged. I don't think there's any one state you can point to right now [as an example], said Trey Gillespie, senior workers compensation director at the Property Casualty Insurers Association of America.
Hopeful moves are treatment guidelines passed in Washington state, the closed formulary system that prevents prescriptions of drugs for certain medical conditions in Texas and Oklahoma and prescription drug monitoring efforts in New York, he said.
The Oklahoma's workers' compensation reform bill has some provisions similar to those already in place in Texas since 2011. New agencies would be required to adopt a closed formulary system. If prescription medication exceeds recommended treatments found in official disability guidelines, he said, the prescription must have pre-authorization and the physician must provide justification about the medical need for that drug.
In New York, the new monitoring laws put in place in 2012 include creation of a "real time" prescription registry to provide information to practitioners and pharmacists; requiring all prescriptions to be electronically transmitted; and improving safeguards for the distribution of specific prescription drugs that are prone to abuse, according to Gov. Andrew Cuomo's office.
Washington state officials have blazed enough of a trail with their efforts that they are being sought to help develop opioid guidelines for use in California, Wood said.
Some states have made it harder for doctors to prescribe more powerful pain killers. Gillespie said some recent data suggests doctors are not as quick to prescribe opioids and narcotics as they have been in recent years.
I basically believe that legislation and clear standards for treatment are necessary to bring our consumption [in the U.S.] to be more consistent with what we see in terms of consumption worldwide, Gillespie said. It would be worthwhile considering the extra risk inherent in prescribing long-term opioids.
In the 2013 sessions to date, states have had mixed results in dealing with repackaging and physician distribution of opioids. In Maryland, an ongoing battle over repackaged drugs and physician dispensing will also continue, Wood said. But Indiana legislators recently passed a law putting a cap on the price of repackaged drugs, similar to what had been accomplished earlier in Illinois and Michigan.
Indiana's new laws put in place a workers compensation hospital fee schedule at 200% of federal poverty guidelines in Medicare and caps repackaged drug prices at the average wholesale price set by original manufacturers. Wood said the fee schedule change was an improvement, but not satisfactory. The repackaged drug cap there was favored by both PCI and AIA.
Attempts to change the workers compensation medical fee schedules in Virginia failed in this session, despite climbing medical costs, and Wood expects the issue to return in 2014.
Medical costs cover 60% plus of benefit dollars. While halting them is in the court of policymakers, there appears to be no easy way to control the impact of medical costs on workers compensation insurance. I think its unfortunate, Wood said. But I don't see the medical community as willing to agree to a reasonable approach to control unit prices.
With states individually grappling with these issues, it could leave insurers, medical practitioners and employers in workers compensation programs with 50 slightly different solutions. Gillespie said federal officials appear unwilling to step in and get more involved to issue guidance in areas of treatment protocols and drug monitoring. Instead, states are left to come up with ideas.
Every state needs to improve. No state we can say is the perfect state right now, Wood said. I think states are going to be at this for the foreseeable future. It's going to take quite a while to turn the ship around.