Sarasota, FL (WorkersCompensation.com) – The older the claim, the higher the costs — especially for prescription drugs. That’s one of the main sticking points when trying to bring legacy claims to settlement, say two industry veterans.
Aging claims also increase the likelihood that the injured worker will become a Medicare beneficiary, either due to age or disability. That means those higher drug costs must be included in a Medicare Set-Aside. Understanding why and how prescription drug costs often increase dramatically during the life of a claim and taking steps to reduce — or even eliminate — them can help get to claim resolution.
Why Legacy Claims
Companies that merge with or acquire another organization may unknowingly be faced with unresolved, costly workers’ compensation claims. That’s one of the many reasons these older, legacy claims exist.
Then there are claims that seem to just continue on endlessly. “They are claims on autopilot,” said Dan Anders, chief Compliance Officer for Tower MSA Partners. “The newer claims get all the attention.”
There are situations in which the injured worker won’t agree to settle, for a variety of reasons. In other cases, an estimated MSA amount seemed too high so the idea of settlement was ignored.
Then there are the ‘lurking’ claims. “It starts as a sprain,” Anders said. “Five years later the person is still in pain management and won’t return to work.”
During the webinar A Prescription for Settling Legacy Claims, Anders and Phil Walls, chief Clinical Officer for myMatrixx explained how a pharmacy benefit manager and a MSA company working in consort can get claims to settlement in a way they say is a win-win for injured workers as well as payers.
Rx Drug Cost Drivers
“Older claims are really driving up costs in many, many areas,” said Walls, “especially pharmaceuticals.”
A study by NCCI showed that costs for prescription drugs increase exponentially, eventually taking over a large percentage of the cost. For example, the data said that in year 4 of a claim, prescription drugs comprise about 17 percent of a claim’s cost; by year 16, it is 47 percent of the cost.
Brand name drugs are a major cost driver of legacy claims. “Prescription drug usage increases as claims age,” Walls said. “It can be 315 percent higher [than generics].”
Key to driving down that cost is what Walls referred to as ‘generic efficiency.’ “It measures how often a generic drug is dispensed when one is available,” he said. “That generic efficiency rate declines with older claims.”
Generic drugs these days are regulated such that the effect on the patient should be little to no difference from the brand name version. But physicians and/or injured workers may believe otherwise.
“When we talk with physicians, most say they really did not care, that the injured worker asked for it. And they are willing to make the change,” Walls said. “But with injured workers, the reasons vary … they think they are getting something inferior.”
Educating physicians and injured workers can be effective in getting the prescription changed to a generic version of the medication.
Topicals are another cost-driver of prescription medications. While some of these are effective and safe, others may be questionable – and costly. Private label topicals, for example, are marketed to and sold by physicians.
Specialty drugs for conditions such as Hepatitis C and HIV while used rarely for injured workers can nevertheless drive up costs.
One of the biggest drivers of prescription medications are ‘prescription cascade.’
“All drugs cause side effects,” Walls said. “When a physician starts treating the side effects of one drug with another drug, that drug introduces its own side effects.”
Opioids are a perfect example of prescription cascade, Walls said. An injured worker receives an opioid for pain, then needs medication to treat constipation caused by the opioid, then needs a drug to treat drowsiness, and finally needs medication to help him sleep.
“The best approach would be to decrease the amount of the opioid,” Walls said. “But all too often the approach is, ‘let’s prescribe another drug’ … it gets out of control.”
Antidepressants can be another driver of claim costs, as they are often prescribed for pain management as well as depression. Hypnotics, such as Xanax and Valium also increase significantly with older injuries.
Rx Drugs and MSAs
The problem with the increased usage and expense of prescription drugs becomes glaringly evident when trying to develop a MSA. “CMS locks in current [medication] use. Over the lifetime,” Anders said.
CMS, the Centers for Medicare and Medicaid Services, will review MSA submissions for approval. While that is not required by law, it is typically recommended as a way to prevent the agency from demanding money in future years.
To gain CMS approval for a MSA, medications that may be unnecessary, or not even used any longer by the injured worker, must still be included in the MSA. Guarding against that can be difficult.
“CMS will not follow UR, or in California IMR decisions without an alternative treatment plan,” Anders said. Also, “they are priced at the lowest average wholesale price from the Red Book database. Sometimes it’s an increase over what was being paid through the pharmacy benefit manager.”
Identifying potential cost drivers of prescription drugs and putting a plan in place to address them can make a significant impact on the cost of a claim, the speakers said. “Throughout the process we are looking at opportunities to intervene,” Anders said. “We reach out to the treating physician for last dates of service to see what’s going on. We also do drug reviews to see if there are alternatives that can be implemented.”
Digging down into the specifics of the injured worker’s treatment and drug regimen can uncover areas for significant cost savings with no impact on the injured worker, Anders and Walls said.
In a case study used as an example, an injured worker with chronic pain associated with a cervical injury was taking opioids and antidepressants. The total morphine equivalent doseage was 480 mg per day, much higher than what is typically recommended. Ultimately, a pain management physician agreed to wean the patient from the opioids and the drug regimen was stabilized at 120 mg MED per day, resulting in a cost savings of roughly $1 million.
“Our goal is never to keep the injured worker from obtaining the therapy they need, but not to expose them to unnecessary prescribing,” Walls said.