Case Study: 61.4% Savings on MSAs with Integrated Opioid Approach

The workers’ compensation industry’s efforts to reduce unnecessary opioid use doesn’t seem to have caught on with all sectors yet. A new report shows that in California, federal government approvals of funds for opioids in Medicare Set-Aside (MSA) agreements greatly exceed the recommended levels in evidence-based medical guidelines.

It’s a sobering report that experts say places the affected injured workers at increased risk of opioid-related dependence and addiction. The authors suggest public policy changes are needed to the government’s approval process for the MSAs. In the meantime, there are actions payers can take to rein in the costs — and risks — of overuse of these medications and still obtain government approval.

Opioids and MSAs

An MSA is a financial agreement in which injured workers who are or soon will be covered by Medicare are given funds to settle their workers’ compensation claims. Included are allotments to cover estimated future medical expenses.

MSAs are not required to be submitted for approval by Medicare; however, they offer claims administrators a degree of protection against future liability if the funds run out too soon and Medicare becomes the primary payer. Having an approved MSA means the government is less likely to seek repayment.

The California Workers Compensation Institute analyzed nearly 8,000 California MSAs that had been approved by Medicare in 2015 and 2016. They focused on dollars earmarked for opioids and found “that nearly 70 percent of federally mandated and approved California workers’ compensation MSA settlements for injured workers require funding for decades of opioid use, often at dangerously high levels and in conjunction with other high-risk drugs. Such a requirement exceeds federal and state clinical guidelines and places patients at high levels of risk.”

For comparison, the authors looked at stats from a case-matched control group of 71,771 closed workers’ compensation permanent disability (PD) claims with the same types of injuries.

Here’s what they found:

69.4 percent of the MSAs included allocations for opioids, compared to 59.1 percent of the PD claims.
27.7 percent of the approved medications in the MSAs were for opioids.
The average amount set aside for opioids in the MSAs was $33,113, or 32.7 percent of the total prescription drug allocation.
The average daily morphine equivalent dose (MED) was 54.7, and more than 10 percent of the MSAs with opioids had an estimated MED level of more than 90 per day. Medical guidelines, including the official California Workers’ Compensation Medical Treatment Utilization Guidelines (MTUG), the standard of care for the state’s injured workers, recommend no more than 50 MEDs without concerted efforts to wean the patient to lower levels.
In terms of opioid strength, the cumulative morphine milligram equivalents (MMEs) in the MSAs was 45 times the cumulative MMEs in the PD claims; and opioid levels for the top 5 injury categories in the MSAs ranged from 33 to 78 times those of the PD claims.
The time period allotted for opioid use averaged 20.9 years.

“A more coordinated effort and better balance are needed between workers’ compensation programs and workers’ compensation MSAs in order to assure the long-term health and safety of injured workers as they progress through both systems,” the authors wrote.

Another Way

The exorbitant allotments for opioids in approved MSAs may be the average in California currently, but they don’t need to be the norm. There are a variety of strategies payers can use — even before they get to the settlement phase of a claim.

Physician peer review. A physician reviews the injured worker’s medical history and treatment and may uncover an opportunity to provide the same or better care using fewer, less strong and/or shorter time spans for opioids. A treating physician is likely more comfortable speaking with a peer who has looked into the records.
Early intervention. Payers can take a proactive approach to prevent injured workers from overuse of opioids by flagging at-risk claims and intervening.
Pharmacy benefit managers (PBMs). PBMs study data, medical records, lab results, etc., and manage patient care. They can also provide counsel and education to stakeholders involved in a claim, such as an adjuster, physicians, and nurse case managers.
Integrated approach. Discussions in which stakeholders review metrics can help keep claims on track. Third-party administrators, PBMs, MSA companies and others should be included.
Managing expectations. Injured workers in chronic pain, which comprises the bulk of those agreeing to settle their claims, often seek a cure to be pain-free. By educating them and their physicians these patients can understand that the pain can’t be eliminated but it can be managed.

Case Study (Provided by Tower MSA Partners) 61.4% Savings

As part of its business model, Tower uses a Triage service to identify challenging issues before an MSA is developed and provides recommendations to address them. The company’s clinical experts analyze the injured worker’s medical issues; they examine the recommended treatment plan to ensure it adheres to evidence-based medicine, and evaluate the need for the future medical care. An internal pharmacist contacts the treating physician to discuss the claim and make recommendations. Once that is completed, the company finalizes and sends the MSA for approval.

The goal is to limit pharmacy to medications appropriate for the long term and reduce the duration and strength of opioids where possible when the drugs are included in MSAs.

Using this integrated approach has led to the following results:

7 percent of MSAs approved by the government include $0.0 for pharmaceuticals.
6 percent of approved MSAs include opioids.
4 percent MSA savings.

Conclusion

The opioid epidemic has been declared a public health emergency by the administration. The workers’ compensation industry has made tremendous strides in the effort to prevent opioid-related problems and wean injured workers off the drugs. The approaches that have been shown to be successful should be also be utilized when MSAs are involved.

Author Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

Contact: mstack@reduceyourworkerscomp.com.

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