An Update on Opioids and Impact on Workers Compensation Insurance
Last month, in our blog, we discussed how prescriptions for certain opioid painkillers when included in Workers Compensation claims, were nearly four times more likely to cause a catastrophic claim. We have additional information on the topic that we’d like to also share with you here.
According to a recent report by insurance brokerage Lockton, on a national level, it’s estimated that 55-86% of all Workers Comp claimants are receiving opioids for chronic pain relief. The fact, however, is that there is “overwhelming consensus of evidence-based medicine that does not support its long-term treatment protocol outside of very specific cases, most of which involve end-stage cancer treatment.”
Furthermore, according to the Centers of Disease Control & Prevention, overdose deaths from prescribed painkillers have increased 300% since 1999, when the nation experienced approximately 15,000 fatalities, more than cocaine and heroin combined, and they originate from prescriptions, not home labs. The misuse and abuse of prescription painkillers was responsible for more than 475,000 ER visits in 2009, doubling in just five years. In the crossfire of all this is Workers Compensation insurance.
Opioids themselves account for an average of 25% of pharmacy spend, and 35% or greater for Comp claims over three years old, according to the report. The indirect costs are equally significant with claimants on long-term opioid care, greater than 90 days, not typically returning to work, as they’ve become tolerant or even dependent on the drugs, and suffer varied related illnesses and debilitating side effects secondary to the drugs’ use.
Bottom line: According to the report by Lockton, “when combining the direct and indirect costs of an undermanaged pharmacy benefit program and its impact on indemnity losses caused by longer temporary total disability, greater permanency ratings, and the treatment of comorbidities, total pharmacy expenditures represent somewhere between 20-30% of workers’ compensation ultimate developed claims costs.”
What’s even worse, is that most employers are unaware of the extent that pharmacy expenditures are affecting workers comp costs and their bottom line. They actually believe it’s a small percentage. They are not getting their hands on solid facts to see what is being spent. The report states that: “Pharmacy Benefit Management (PBM) stewardship reports are typically not quantifying the severity of the problem when they do not represent both direct and indirect savings.”
IAIABC Drafts Rule to Address Opioid Prescriptions
Looking to deal with the growing problem of opioids and workers compensation, the International Association of Industrial Accident Boards and Commissions (IAIABC) committee posted a draft model rule (for discussion only) on September 27 to amend state workers compensation laws that address opioid pain medication prescribing. (The IAIABC is a trade association representing government agencies administering workers comp systems.)
The IAIABC document suggests that when patients receive daily opioid doses with a morphine equivalent exceeding 120 milligrams and they are not experiencing “meaningful improvement in pain and function,” a workers comp claims payer may require that the prescribing doctor provide a plan for managing and tapering the claimants off of the medications as a condition of future payments. The document also suggests that when physicians engage in “long-term opioid treatment for chronic, nonmalignant pain” the treatment should be administered under an opioid management plan.
The plan, according to the IAIABC, should include a treatment agreement signed by the patient and the prescribing physician. It must describe the limitations of opioids in controlling pain, possible side effects of long-term use, risks of opioid dependency, and activities for relieving injury symptoms. It also calls for urine drug testing and specific information to be reported to claims payers.
Source: Keith Rosenblum, Senior Risk Consultant, Lockton Companies, and Business Insurance