The main driver in the cost of workers’ compensation claims remains the medical aspects of the claim. This is due in part to the use and overuse of prescription drugs—mainly opioid-based narcotics. It is important for members of the claim management team to address this issue and adopt best practices to reduce their overall exposure.
How Bad is the Problem?
From 2000 to 2013, services used to screen for substance abuse in the United States grew by over $1.2 billion. While some of this growth was the result of alcohol abuse, experts estimate a majority of it was due to the use and overuse of prescription drugs. One significant source of abuse cited by claims and medical professionals was opioid-based prescription medications in workers’ compensation claims.
This overuse is taxing on the workers’ compensation system. Insurers are spending an increasing amount of time and money to pay prescription drugs to stop this epidemic from spreading. In the state of California alone, it is estimated that over $100 million per year is spent to fund the drug component portion of claims. Workers’ compensation insurers are also spending scarce resources to pay for prescriptions for buprenorphine and naltrexone, which are two drugs used to wean an individual off these potent prescription drugs.
Prescription drug abuse is dramatically increasing the cost of workers’ compensation claims. An example of this impact is as follows:
- $13,000: Average cost of a claim without opioids;
- $39,000: Average cost of a claim with a short-acting opioid, like Percocet; and
- $117,000: Average cost of a claim with long-acting narcotic, like OxyContin
Combatting the Prescription Drug Epidemic
Members of the workers’ compensation claim management team are on the front lines fighting the prescription drug epidemic in the United States daily. Failure to be effective in this battle can lead the following consequences:
- Increased costs from prolonged disability and medical care and treatment;
- Increased case valuation and settlements, which rapidly deplete reserves;
- Increased possibility of claimant death and drug overdoses, including street-drugs.
The stakes are high. It is important for members of the claim management team to evaluate the following case characteristics:
- Age of the claimant: Is tolerance going to be an issue?
- Underlying pathology: Possible chronic pain with low pathology?
- Chemical Dependency: Denial of some claims and urine screens are necessary.
- Functional Ability: “Couch Potatoes” beware!
- Other Long Term Goals: Brief use of opioids to facilitate rehabilitation and then tapered use; and
- Other Issues: Personality disorders, psychological/psychiatric issues
Results Through Education & Communication
Effective claim management teams cannot win this battle alone. In order to be effective and remain competitive, these teams should look to outside service providers for help in educating relevant stakeholders.
Best practices dictate partnering with a Pharmacy Benefits Management company that holds the proper expertise and authority to effect change. The first step is education of relevant parties through communication. This includes the following:
- Educate and communicate directly with injured workers about the importance of safe treatment;
- Communication and letters to doctors on behalf of the claim management team explaining legitimate concerns regarding opioid based prescription drugs; and
- Bulletins regarding the dangers of physician dispensing.
Example – results of these systems of communication create staggering results:
Express Scripts saw a reduction of nearly 11% in utilization of opioids among their workers’ compensation clients in 2014. Additionally, the percentage of injured workers using opioids for a longer term (i.e., more than a 30-day supply) decreased 2.6 percentage points in 2014, to 31.5% of opioid users.
Common belief has been that it would be hard to convince an injured worker to choose a lower-cost alternative because there is no financial incentive for them to do so, as injured workers have no out-of-pocket expense for the treatment related to their injuries. However, Express Scripts’ leveraged expertise in behavioral science to pilot a program that sent injured workers a “social responsibility” letter – explaining how their prescription drug choices could help control the rising cost of healthcare. Injured workers who received the letter were 60% more likely to choose a generic equivalent.
Conclusions
The claims management team has an important role in stopping prescription drug abuse in the workers’ compensation system. This includes being proactive and collaborating with representatives from the pharmacy industry to educate everyone.
Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.
©2016 Amaxx LLC. All rights reserved under International Copyright Law.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.
