By Dave Torrence, Executive VP and General Manager, Pharmacy Solutions, Mitchell
As we enter 2022, the workers’ compensation market is still plagued by many of the same issues it has been facing since the start of the COVID-19 pandemic — fluctuating claim volumes, changing regulations and growing uncertainty about the future. Though it is impossible to predict exactly what will transpire, we have identified three major trends we think will have a significant effect on workers’ compensation payers in 2022.
1) Staffing Shortages and Changing Demographics
The U.S. labor market is entering 2022 in the midst of what many are calling “The Great Resignation.” In November 2021, a record 4.5 million employees quit their jobs according to the U.S. Department of Labor. This, combined with a well-documented aging working population, may pose multiple challenges to the workers’ compensation industry for years to come — according to the Bureau of Labor of Statistics, the labor force participation rate is expected to decline from 61.7% today to 60.4% in 2030.
As this trend continues, workers’ compensation professionals should consider this issue from two different angles:
- Potential for More Injuries: Staffing shortages have led to many front-line and hourly employees working overtime to meet productivity demands, which can result in burnout, high turnover rates and increased incidence of injury. To help prevent injuries due to overexertion, workers’ compensation claims organizations should implement prevention strategies, such as ergonomic programs and other health and safety measures.
- Claim Staff Turnover: Prior to the pandemic, the insurance industry was already experiencing a staffing crisis due, in part, to an aging workforce, which has only been amplified by the “Great Resignation.” As significant employee turnover and staff demographic changes continue, claims organizations should strategically implement technology to mitigate challenges should their most experienced team members walk out the door. This includes incorporating better training and decision-support technology, increasing automation of administrative tasks to help fill staffing gaps and investing in new technologies to improve claim staff workflows and user experience.
2) Rising Drug Prices
Since 2016, increases in branded prescription drug prices have significantly outpaced inflation. As these costs continue to rise, policymakers are under pressure to address and manage the issue. For example, a recent Congressional House Democrat investigation found that 12 of the most expensive drugs sold to Medicare were priced at a median of almost 500% higher than when they were brought to the market. As a result, some lawmakers are calling for legislation to allow Medicare to negotiate drug rates that, if passed, would accelerate price pressure for drug manufacturers.
As federal and state legislatures continue to address drug price management, there are a few specific ways workers’ compensation payers can manage costs within their own programs:
- Mitigate Effects of High-Impact Medications: Drugs like compounds, compound kits, topicals and combo packs are considered “high-impact” medications since they are significant cost drivers. Payers should apply additional scrutiny and oversight of these drugs in their programs, specifically reviewing the safety, appropriateness and efficacy of these medications.
- Address Physician Dispensing: Many high-impact pharmaceuticals are dispensed by physicians directly, which can lead to increased costs and potential medication errors when important clinical checks are bypassed. Payers should work with their pharmacy benefit management partner to make sure they see an end-to-end view of every claim, both prospectively at the point-of-sale and retrospectively through bill review.
- Implement a Holistic Program: To truly get a clear view of pharmaceutical care and manage it appropriately, carriers need to set up a holistic pharmacy benefit management program that includes robust formulary management, point-of-sale controls, integration with bill review and a clinical solution based on established guidelines.
3) Changing Regulatory Landscape
Since the start of the pandemic, the workers’ compensation industry has been managing an incredible volume of regulatory and legislative changes, from expansions of presumption laws to emergency rules allowing for telemedicine use in more situations than ever before.
As the pandemic goes on, we also expect continued legislation related to COVID-19. For example, some states are considering broadening their already-expanded presumption laws to further cover adverse vaccine reactions for workers. We may also see additional changes to quarantine requirements, allowing for shorter time off work for those exposed to or infected by the virus. Finally, the work-from-home trend could bring new case law that better defines how workers’ compensation insurance should cover injuries occurring in remote environments.
Outside of COVID, the federal government has been active on issues likely to have trickle-down effects on our industry. These include continued expanded access to telemedicine, new drug price legislation as mentioned above, and discussions about medical and recreational marijuana.
By implementing strategies and programs to manage ongoing staffing shortages, rising drug prices and the changing workers’ compensation regulatory landscape, claims organizations will be better poised to successfully navigate the challenges that lie ahead in 2022.
About Dave Torrence
Dave Torrence is Executive Vice President and General Manager of Mitchell Pharmacy Solutions. In this position, Dave leads the company’s pharmacy benefit management and revenue cycle management product lines for the casualty and pharmacy industries.
Enlyte is the parent brand of Mitchell | Genex | Coventry, a leader in cost-containment technology, independent medical exams (IME), provider and specialty networks, case management services, pharmacy benefit and disability management. The three businesses have recently aligned their joint industry expertise and advanced technology solutions into a combined organization of nearly 6,000 associates committed to simplifying and optimizing property, casualty and disability claims processes and services.
Enlyte is a WorkCompWire ad partner.
This is NOT a paid placement.