By Jeffrey D. Miller, COO, Paladin Managed Care Services
Prescription drug abuse has been all over the news in the last couple years, with prescription painkillers now outstripping cocaine as the country’s biggest drug problem.1 Much of the attention is focused on opioids, synthetic narcotics with similar effects to opium derivatives. But all types of painkillers and psychotherapeutic drugs appear on workers’ compensation claims at questionable levels and frequency rates, leaving an entire industry wondering what to do.
Few would dispute that seriously injured workers need pain medicine, especially during post-surgical periods of acute pain when narcotics are not only appropriate but humane. In my experience at Paladin, the problem is one of degree — long-term prescriptions for addictive drugs, drugs that overmedicate the injury, and multiple narcotics given to the same patient. Many times, narcotics appear to be freely dispensed without a pain management strategy in place.
The Cost to Claimants and Their Payers
Unnecessary use of narcotics more or less ensures ongoing health issues for injured workers. In one analysis, nearly 60 percent of workers’ compensation claimants who are still on opioids after 90 days of treatment will likely be using opioids a year later — at great cost to both the claimant and insurance carrier.2 In 2011, NCCI reported that Rx costs rose every year between 1999 and 2009, with costs driven more by utilization than price increases.3 Aside from the burden on insurers, the consequences of addiction can be ruinous to lives through prolonged disability, spiraling depression, brain damage, and even death. The most recent National Survey on Drug Use and Health reports that a startling 55 percent of deaths caused by drug overdose in 2008 involved prescription drugs.4
The System Today
Why is overuse of prescription narcotics so prevalent? Studies and opinion pieces cite a combination of credible reasons — stronger painkillers, multiple prescribers for a single patient, and insufficient understanding of pain medicines by physicians. Unfortunately, today’s approach to prescription utilization management isn’t doing much to solve the problem, perhaps because it focuses more on the business impact than the human repercussions of the prescription drug epidemic.
In our current system, workers’ compensation insurers favor pharmacy benefit management (PBM) programs which offer similar benefits — formularies, discounts, and so on — mostly aimed at controlling costs. PBMs may also involve data analytics and report questionable prescriptions to claims examiners; but most claims examiners have neither the time nor medical knowledge to effectively assess the prescription’s value for the patient.
Rx Utilization: A Proactive Approach
At Paladin, we favor a prospective approach to Rx Utilization Management — one that addresses both the business and human impact of prescription drug excesses through early intervention by Paladin physicians who specialize in this area. Our goal is to influence the prescription before it can damage a claimant’s health and send medical costs soaring.
Basically it works like this: A worker with a knee injury takes a 30-day prescription for Oxycodone to the pharmacy. In response to Paladin’s proprietary referral triggers for drug type, dosage, frequency, drug combinations, and other factors, the pharmacy system automatically sends the prescription to Paladin for physician review prior to its being filled. (In fact, we review all prescriptions for Class II, III, IV, and V drugs.) If, for example, our doctor doesn’t feel the injury warrants a full month of Oxycodone, the doctor calls the treating physician. On the strength of peer-to-peer credibility, the treating physician takes or returns the call, discusses a pain strategy, and possibly modifies the prescription.
Even when our doctors agree with the original prescriptions, they call treating physicians for simple verification. This degree of attention creates a Sentinel Effect, whereby physicians understand there is continuous oversight of their choices, as well as support for managing pain effectively.
The Right Prescription at the Right Cost
We know we can reduce the prescription costs of Paladin clients by 10 to 20 percent a year, which, in some cases, translates into millions of dollars. But more important — from both a business and human perspective — we can spare the patient and the family untold suffering, and the long-term claims costs associated with that.
In reviewing the claim history for one potential client, we saw that 60.4 percent of their claimants were prescribed narcotics and, of those, 67 percent received either a 90-day prescription or prescriptions for three or more types of opioids. With the right system of checks and balances, we believe Rx Utilization Management can not only reduce claims costs but save lives in the bargain. By combining cost-control measures like formularies and discounts with physician review of prescriptions before patients receive the medicine, the industry can do a lot to help solve “the country’s biggest drug problem.”
About Jeff Miller
Jeff joined Paladin in 2009 with more than 25 years’ experience delivering products and services to the insurance industry, including in the areas of finance, operations, managed care, health care, and software technology. His career includes 16 years at Intracorp, a wholly owned subsidiary of CIGNA Insurance and four years at Fair Isaac Corporation as vice president of the company’s Healthcare and Insurance Services unit. During his three years at Cerius Consulting, he served as vice president of Operations. In 2007, Miller formed Amplify Consulting, where he was also an adjunct professor at California State University at Fullerton, where he taught senior-level courses in strategic and entrepreneurial management. Miller received a B.A. in Business Administration from California State University at Fullerton and an M.B.A. from the University of St. Francis.
About Paladin Managed Care Services
Paladin Managed Care Services, a wholly-owned subsidiary of SeaBright Holdings, Inc. (NYSE: SBX), is setting the industry standard for services that reduce claims costs while improving patient care. The company’s unique approach combines physician-guided care with technology-driven efficiency to achieve better results for its clients, including insurance carriers, self-insured employers, insurance pools, municipalities, and group health organizations. As the only company that involves physicians in every service—from case management and bill review to prescription approval and telephone support—Paladin is transforming managed care and delivering extraordinary results. Located in Santa Ana, California, Paladin supplements its in-house expertise with specialists from the industry’s top performing service providers to ensure the best results for clients around the country. For more information, visit www.paladinmc.com. Follow them on twitter @paladinmcs.
1 Damien Cave and Michael S. Schmidt, “Rise In Pill Abuse Forces New Look at U.S. Drug Fight”, New York Times, July 17 2012.
2 “The Power of Vigilance: Targeting Opioid Management Head On,” Risk & Insurance, published at riskandinsurance.com, May 1, 2012.
3 Barry Lipton, Chris Laws, Linda Li, “Workers Compensation Prescription Drug Study: 2011 Update,” NCCI Research Brief, NCCI Holdings, Inc., August 2011.
4 Substance Abuse and Mental Health Services Administration, Results from the 2010 National Survey on Drug Use and Health: Summary of National Findings, NSDUH Series H-41, HHS Publication No. (SMA) 11-4658. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2011.