Expert Commentary

Workers Compensation Claims and the Opioid Impact Revisited

As a follow-up to my now 2-year-old piece on opioid abuse in the claim world, "Opioids: A Stumbling Block to Good Claim Outcomes," I thought it was a good time to take another look at the opioid impact on workers compensation (WC), especially since there's been so much activity from so many different stakeholders to shift the trend line.


Claims Management
September 2018

From the Centers for Disease Control and Prevention to the White House to every vestige of other stakeholders, from law enforcement to mental health providers, it seems like everyone is in on the problem. And, while some reduction in addiction and abuse of opioids has emerged, it remains a major health-related problem that can be vexing in the WC world as much or more than in other areas of life.

With WC insurance accounting for a large percentage of all casualty premiums, any intervening factor that affects claim outcomes is important to WC stakeholders. Four states account for 37 percent of direct premiums written for WC in the United States: California, Florida, Illinois, and New York. Although the workers compensation line has been profitable and the operating ratio below 100 percent for more than 3 years, opioid abuse threatens its longer-term performance if not successfully brought to bear by those that have the interest in and power to do so.

Prescription Abuse Crisis

Opioid abuse as a result of pain management strategies represents one of the greatest challenges facing the industry. Opioid dependence can be, and sometimes is, an unintended consequence of a workplace injury/claim, creating a hurdle for the injured worker and their family, as well as higher care costs for system payers. Finding alternatives to pain management, expanding autonomous claims processes, and controlling opioid prescriptions are among the top issues workers compensation insurers and self-insured administrators need to address to affect change in this area.

Many states already have or are adopting new regulations to help curb the opioid prescription abuse crisis. This is helping injured workers, insurers, and other WC stakeholders mitigate the effect on not only rising claim costs but also unintended opioid dependence and associated rehabilitation costs. 

In California, for example, a drug formulary was adopted that heath providers have been using since January 2018 to guide proper prescription coverages. Also, the governor of Florida recently signed legislation to help reduce opioid addiction and require health provider training and education standards. Many other states also have taken legislative and other actions intended to mitigate the effects of the opioid crisis.

Are We Making Progress?

Insurers and employers have partnered with health providers, states, and other parties to help improve WC claim outcomes and reduce the high expenses associated with claims that involve opioids. The question is: does any of this have any impact?  

To answer this question, the Sedgwick WC loss date from 2012–2016 was analyzed for the effect of opioid prescription use by injured employees. Looking at this subset of Sedgwick's total WC claims data base, prescription spending on WC claims that involved opioids and those claims that did not involve opioids, both continued to decline steadily during this period, down 5 percentage points overall. This was during and after the introduction of claim handling strategies designed to reduce the frequency and dependence on opioids in pain management strategies.

However, looking specifically at WC claims that were resolved within 2 years of being filed, spending on claims involving opioids was still much greater than claims that did not involve opioid prescriptions. In 2015, the expense differential on total prescriptions for claims including opioids versus those with no opioid prescriptions was $405. For claims with even longer durations, or those open for 5 or more years, the expense differential jumped to more than $1,000. 

Additionally, the duration of WC claims that included opioid prescriptions continued to decline during this time frame, indicating health provider education and enhanced claim management of prescriptions may have improved claimant outcomes, even when an opioid was still being prescribed as part of the treatment regime. In this same time frame, the average duration for claims with opioid prescriptions that closed in the same year as filed declined from 10.2 days to 8.3 days. Duration for long-tailed claims (those resolved within 3 years) fell from 137.6 days to 119.6 days. Additionally, the frequency of opioids prescribed in a claim with a drug prescription also declined, from 4.0 in 2012 to 2.5 in 2015.

The data also demonstrated that neck and trunk injuries that result in a WC claim are most likely to require an opioid prescription and that neck injuries also have one of the longest claim durations of any type of injury. Further, the industries with the highest incidence of opioid prescriptions during the life of a claim included rubber/plastic manufacturers and apparel/other finished product manufacturers, which both had 16 percent of claims that included opioid prescriptions, followed by heavy construction (14 percent) and primary metal manufacturers (13 percent). Industries with the lowest incidence of opioid prescriptions in a WC claim were education services and food and beverage establishments, both at 6 percent incidence. Thus, both the injury type and industry are correlated to dependency trends.

Looking at the Sedgwick-provided prescription data, the average drug expenditure for WC claims open for 5 or more years that involved opioid prescriptions was $6,217 compared to $936 for nonopioid claims of the same duration, a 660 percent differential. In addition, 2 percent of all claim types were still open after 5 or more years. With a $5,281 price differential on claims that involved opioids, the incremental expense increased exponentially, causing issues for claimants, employers, and insurers.

When a workers compensation claim involves an opioid, it is not only more expensive but is also more likely to have a longer duration. Three-fourths of claims filed in 2016 that didn't involve an opioid prescription closed within the same year, compared to just 42 percent of claims that involved an opioid prescription.

State Response

With differing state mandates and regulations, state-based performance is also a critical benchmark for stakeholders to understand. As stated, the national average of opioid prescription frequency has been on the decline since 2012. Among larger market-share states, California, which once outpaced the national average by 14 percentage points (first quarter 2012), was below the national average by 1 percentage point in first quarter 2016. Also, as of second quarter 2016, Florida, Illinois, and New York were also below or at the national average.

Prescription trends in workers compensation claims show that opioid use has decreased since 2012; however, when opioids are involved, claim durations are more likely to extend beyond the year in which they were filed and to be much costlier for both insurers and employers. Although the enormous financial expenditures of the opioid crisis (which incepted in the mid-2000s) are on the decline due in part to the work of state regulators as well as employer and health provider education and claim mitigation programs, the impact on injured workers remains a concern.

The Role of Claim Professionals

The need for claim professionals to validate each prescription drug during the life of a claim and provide targeted training and education about the proper use and administration of opioids remains critical to the best outcomes. In addition, claim professionals should seek out the latest information about the best pain treatment practices and alternative treatments for pain management that may avoid the need for opioid prescriptions.

Alternative pain treatment is a growing field in which acupuncture, chiropractic treatment, cognitive behavioral therapy, and mindfulness practices have begun to gain traction with medical professionals. In Ohio, for example, their Medicaid department has extended its coverage to include acupuncture treatments for lower back pain and migraines, and more than 13 other states have taken similar steps. Technology also offers new and different alternatives to opioids, with one major insurer recently announcing that it is testing a new virtual reality technology to treat pain and help manage the related WC expenses.

Conclusion

This problem will not be solved easily and may never be eradicated. However, to have a meaningful and lasting effect on the opioid problem, WC insurers and other claim handlers must continue to partner with employers, state regulators, healthcare providers, and claimants to leverage state-of-the-art claim practices and ensure the best outcomes for their claimants and employers. To continue to influence trends in opioid abuse, insurers and other claim professionals must invest in and leverage the latest pain management interventions, technologies, training programs, and alternative medicines and continue to push for new and different treatments and processes that not only have the most promise for eliminating the scourge of opioid abuse but also eliminate the addiction it so commonly produces.


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