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.
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.