The expansion of Medicare to include a prescription drug benefit has had varied results on the workers’ compensation system and compliance with the Medicare Secondary Payer Act. While this expansion has assisted countless Medicare beneficiaries receive their necessary prescription drugs as an affordable price, it has come at a cost. This is a setback in compounding the prescription drug epidemic and increasing the “cost” of a Medicare Set-aside allocation.
Prescription Drug Expansion in Medicare
The creation of the Medicare program in July 1965 allowed disabled and older Americans to receive affordable health care coverage. While this was heralded as a step forward, the program lacked the ability of Medicare beneficiaries to receive an affordable prescription drug benefit. Congress addressed this issue in 2006, when they expanded the Medicare program to include a Part D prescription drug benefit. Under this new program, anyone who has coverage under Medicare Parts A or B (Traditional Medicare) is eligible for Part D. This includes those receiving coverage under a Medicare Advantage Plan, which typically have Part D coverage as part of the plan.
Following the passages of the Part D program, CMS was quick to provide guidance on how Medicare Set-aside allocations should address this matter. The result was a dramatic increase in the cost of such allocations given the increasing use of prescription drugs in injury treatment regimens. Significant costs can also be incurred if the injured employee is using opioid-based prescription drugs.
Medicare Part D Adding to the Drug Epidemic
Prescription drugs 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 Percocet; and
- $117,000: Average cost of a claim with long-acting OxyContin.
Under Part D guidelines, plan sponsors may in fact be fueling the prescription drug epidemic. According to industry sources, it has been recommended that sponsors of Part D plans change dispensing guidelines in their plans for beneficiaries taking a 120 mg morphine equivalent daily dose. This includes those beneficiaries who are using prescriptions for opioid-based prescriptions for more than 90 days. Other factors that are leading to deadly results include people who are receiving their prescription medications from multiple prescribers and pharmacies. The prolonged use of these prescription medications is not only expensive, but can result in addiction and negative health consequences.
In highlighting this problem, the National Alliance of Medicare Set-Aside Professionals (NAMAP) have become more engaged in educating stakeholders and advocating for change. According to a recent statement from NAMSAP asked, “why do workers’ compensation MSA approvals often include future prescription allocations with Morphine Equivalent Dosages in excess of 120, 200, or even 500 per day, over the beneficiary’s full life expectancy? And what message does a workers’ compensation MSA supporting these high opioid dosages over a patient’s entire life expectancy send to the addicted patient?”
Combatting the Epidemic: Being an Advocate for Change
No single law or rule that will end the opioid-based prescription drug problem in America and reduce workers’ compensation program costs. Action instead must come from a demand for change in how we address the use of these prescription drugs within the system—to change the hearts and minds of policymakers. It includes advocacy with the state and federal governments in how they view this matter when it comes to providing medical care and treatment to injured persons.
One important action comes in the form of allocations for opioid-based prescription medications in Medicare Set-aside allocations. Under the current CMS rationale, medical care and treatment, including pharmacy related issues, must cover the life expectancy of the claimant. This philosophy is not practical for a claimant using OxyContin or other related prescriptions. By using Evidence Based Medicine (EBM) techniques, interested stakeholders must highlight the dangers of long-term opioid-based drug use and instead, promote their use for shorter periods.
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.
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