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Workers' Compensation

Obamacare’s Impact on Workers’ Compensation Prescription Drug Costs: Experts Predict Greater Drug Utilization and Offer Solutions

By John Stahl, Esq.

The near certainty that provisions in the Affordable Care Act (ACA), a.k.a. Obamacare, will contribute to the increasing tendency to prescribe workers’ compensation claimants opioids prompted Risk & Insurance to conduct an October 23, 2012 webinar entitled “Affordable Care Act & Expanding Narcotic Threats: Implications for Worker’s Compensation Pharmacy Drug Benefits?” Dan Reynolds, a Managing Editor at Risk & Insurance, moderated the event. The speakers were Adam Seidner, MD, the National Medical Director for Travelers Insurance, and Dr. Michael Seise, the clinical services manager for Healthesystems.

Reynolds observed that the ACA passing at a time that the American population is aging will almost certainly significantly increase the already high burden of workers’ compensation pharmacy drug benefits on employers and workers’ compensation insurers. Expenses related to heavy use of opioids in the workers’ compensation system were a primary focus.

Snapshot of the Future of Managing Workers’ Compensation Drug Benefits

Seidner presented statistical evidence that the average lifespan of Americans will exceed 90, and perhaps even 100, years within the next several decades. Consequences of this longevity include:

  • Age-related mobility loss
  • Osteoarthritis of the spine, knees, and shoulders
  • Declined cardiovascular health
  • Hearing and vision changes starting at 40
  • Sarcopenia muscle loss that will affect the impact of work-related trauma and the recovery period regarding such incidents
  • Increased possibility of chronic diseases, such as addictions and high blood pressure

The better news was that the ACA’s anticipated impact included:

  • Healthier and better conditioned employees
  • Fewer medical co-morbidities
  • Shorter recovery under evidence-based medicine treatment

A potential downside regarding the underlying increased health insurance coverage was an increased delay “in medical intervention due to a significant medical provider shortage.” Seidner partially attributed this deficit in care to the large percentage of physicians who were at an age that they were either retiring or reducing the time that they devoted to their practices.

It is worth noting as an aside that providing a claimant timely and adequate medical care after a compensable incident is a basic workers’ compensation tenet and often significantly reduces the amount and cost of required medical and wage-loss benefits.

Turning to workers’ compensation prescription drug benefits, Seidner predicted that the ACA would result in increased utilization of prescription drugs in the workers’ compensation system. He speculated as well that that increased sales volume would reduce pharmacies’ gross profit margins and promote using generic versions of name-brand drugs.

One identified cost-containment element of the ACA was that pharmacy benefits managers must “confidentially disclose information on their pricing mechanisms and savings rate.” Further, the requirements of participating in the Health Insurance Exchange Programs that the ACA created for small and mid-sized employers included reporting drug rebates, discounts, and other price concessions. One objective of these standards was creating transparency regarding the actual costs of the drugs that physicians prescribed claimants and other patients.

The proposed solutions for the indirect costs of the anticipated increase in the use of opioids and other prescription medications were the same as the pre-ACA recommendations regarding the high workers’ compensation drug costs. These included:

1. Prescription Monitoring Programs. A common form of monitoring has required that physicians who prescribe drugs that fall within the program’s scope register in a manner that facilitates information sharing regarding how many physicians are treating a claimant and the total number of prescriptions that that claimant has received.

2. Early intervention that identifies actual or potential abuse of prescription drug use.

3. Setting a 50 morphine equivalent threshold.

4. Eliminating overprescribing in the form of prescribing many more pills than a claimant will take regarding the current incident. Seidner provided the example of a prescription for 30, 60, or 90 Percocets when only four are required.

Opioid Addiction

Seise expanded on Seidner’s discussion of opioid-related problems that the anticipated increase in prescriptions under the ACA were expected to affect. He stated very plainly that we have “reached a point at which there is no return” regarding fraud and abuse associated with opioid use.

In addition to the measures described above, Seise reported that the FDA was expected to fully implement an opioid risk evaluation and mitigation strategy by March 2013. He emphasized that neither that program alone nor any other single effort would effectively combat misuse of opioids.

A discussion regarding a history of claimants and other patients turning to alternative legal and illegal options when Oxycontin and other opiates became abuse deterrent illustrated the above-stated theory that “no one single intervention is sufficient.”

The three-prong approach to addressing opioid abuse that Seise recommended was:

1. Legislation;

2. Monitoring; and

3. Patient education.

Bottom Line

The liberal healthcare policies under the ACA are only going to promote the profitable and “quick fix” solution of prescribing opioids and other drugs for compensable harm. A comprehensive multi-pronged approach to managing those costs will both help keep workers’ compensation costs manageable and avoid state and federal government scrutiny of prescription and pricing practices.

© Copyright 2012 LexisNexis. All rights reserved.


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