Medication Trends Shaping Workers Compensation in Michigan Presented by Brian Allen, Vice President, Government Affairs, Progressive Medical, Inc.
Prescriptions, Policy, and Politics Trends in Prescription Drug Use in Workers Compensation Nationally and in Michigan National and Local Presented by Brian Allen Vice President, Governmental Affairs 2 2 Physician Dispensing and Repackaged Medications $8,000 $6,000 $4,000 $2,000 $- Average Paid Medical Benefits (All Claims) $7,297 $6,017 $5,524 $5,316 $5,145 $4,747 Pre-Reform Post-Reform Total Average Paid Indemnity Benefits (All Claims) $6,000 $5,039 $5,000 $4,229 $3,956 $3,930 $3,937 $4,455 $4,000 $3,000 $2,000 $1,000 $- Pre-Reform Post-Reform Total Without Phys-Dis Repacks With Phys-Dis Repacks Without Phys-Dis Repacks With Phys-Dis Repacks MEDICATION CHALLENGES NATIONALLY Source: CWCI Research Brief February 2013, Differences in Outcomes for Injured Workers Receiving Physician-Dispensed Repackaged Drugs in the California Workers Compensation System, Swedlow, et al. 4 4 1
Physician Dispensing and Repackaged Medications Illinois Study Comparing Physician Dispensed vs. Pharmacy Dispensed Medications Compounded Medications Claims with at least one physician dispensed medication Claims with a physician-dispensed opioid within 90 days 2013 0.53% of all prescription medications 2012 0.60% of all prescription medications Source: Journal of Occupational and Environmental Medicine, Volume 56, Number 5, May 2014, Effect of Physician-Dispensed Medication on Workers Compensation Claim Outcomes in the State of Illinois, White, et al. 3.81% of total drug spend 2.08% of total drug spend 5 5 6 6 Compounded Medications Opioids On average, there are four to five common topical ingredients in compounded medications. Therapeutic Classes Commonly used agents NSAIDs Ibuprofen, Diclofenac, Ketoprofen, Flurbiprofen Opioids Tramadol Local Anesthetics Lidocaine, Benzocaine, Ketamine Antidepressants Amitriptyline, Nortriptyline Anticonvulsants Gabapentin, Lyrica Skeletal Muscle Relaxants Cyclobenzaprine, Baclofen Other Topical Analgesics Capsaicin, Menthol, Methyl Salicylate, Clonidine US consumes over 80% of the world s opioids CDC declared opioid overdose deaths an epidemic in 2011 Half of all drug overdose deaths involve opioids Use is flattening out in workers compensation 7 7 8 8 2
Medical and Recreational Marijuana Still a Schedule I drug High potential for abuse No currently accepted medical uses Lack of accepted safety for use under medical supervision Impact on workers compensation claims Colorado makes $7.5M in pot revenue in July Colorado.gov Department of Revenue Obama Says Marijuana Is No More Dangerous Than Alcohol Headline from Huffington Post, January 25, 2014 Eric Holder Says DOJ Will Let Washington, Colorado Marijuana Laws Go Into Effect From Article on CNN.com on August 30, 2013 9 9 Managing Pharmacy Care for Injured Workers Resistance to direction of care Injured workers Providers Comfort level with current providers Attempts to manage costs via fee schedule Lack of understanding of the benefits Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies. - Groucho Marx POLITICAL INFLUENCES IMPACTING LEGISLATIVE CHANGE 11 11 12 3
Political Influences Impacting Legislative Change Political Influences Impacting Legislative Change Economic Development Labor Concerns Attracting businesses and jobs to the state Cost of doing business for existing business Freeing capital for creating jobs Economic Development Labor Concerns Florida Case Cortes v Velda Farms, August 2014 Political Horse Trading - Raising Indemnity Benefits Provider Concerns Provider Concerns Public Perception Public Perception Lobbying Lobbying 13 13 14 14 Political Influences Impacting Legislative Change Political Influences Impacting Legislative Change Economic Development Labor Concerns Fee Schedule Cuts Bureaucratized Practice of Medicine Economic Development Labor Concerns Election year politics Re-election concerns Public expectations of care when injured Provider Concerns Provider Concerns Public Perception Public Perception Lobbying Lobbying 15 15 16 16 4
Political Influences Impacting Legislative Change Economic Development Labor Concerns Provider Concerns Florida Example - $3 million in campaign contributions over four years Balancing Concerns Injured Workers Employers Payers Labor Unions Medical Providers Ancillary Service Providers Attorneys Public Perception Lobbying POLICY CHANGES IMPACTING WORKERS COMPENSATION PHARMACY CARE 17 17 Controls on Physician Dispensing Controls on Physician Dispensing Compromise is a way of life and occurs in nearly every interaction, both in our personal and professional lives. We do it every day. As Florida Senator Alan Hays attests, when both sides are willing to give a little bit, the result will likely be an even better solution. 20 20 5
Caps on Repackaged Medication Reimbursement Controls on Compounded Medications Pennsylvania Legislation North Carolina Amendment to Budget Bill AK WA MT OR ID WY NV UT CO CA AZ NM HI VT ME ND MN NH NY MA WI SD MI PA NJ CT RI IA NE OH DE IL IN MD WV VA DC KS MO KY NC TN OK SC AR MS AL GA TX LA FL Georgia Mississippi Oklahoma AK WA* MT OR ID* WY* NV UT CO CA* AZ NM VT ME ND MN NH NY* MA WI SD MI PA NJ CT RI IA NE OH* DE IL IN MD WV VA DC KS MO KY NC TN OK SC AR MS* AL GA* TX LA FL HI Workers' compensation statutes/regulations limit physician dispensing and/or repackaging (Restrictions on dispensing, billing and/or reimbursement) No clear legal or workers' compensation limits on physician dispensing and/or repackaging Legal restrictions (Practice Act) in addition to workers compensation controls Legal restrictions on physician dispensing (Medical/Pharmacy Practice Act restrictions) Note States such as AR, DE, FL, KY, NY, and TN have overlapping workers compensation and state Practice Act controls Data Reflects published state statutes/regulations/case law on Physician Dispensing/Repackaging Current as of July 2014 Not addressed by specific WC Regulations/Fee Schedules Unique state compound reimbursement/billing qualifiers and/or provisions Individual ingredient(s) NDC required on compound bills Language explicitly permits denial of reimbursement for individual ingredients lacking an NDC * Additional state regulatory/statutory language regarding billing and reimbursement for compounds (including doctor dispensed compounds) Data Reflects published statutes/regulations/fee schedules related to workers compensation compounded drug billing/reimbursement Current as of July 2014 21 21 22 22 Medication Rescheduling Opioid Controls DEA moves Hydrocodone Products to Schedule II Closed Formulary Ohio Washington PDMPs Efforts Are Making An Impact 300 250 200 150 100 195 Opioid Utilization Number of prescriptions written for opioids in millions 207 217 223 231 243 241 232 50 0 2006 2007 2008 2009 2010 2011 2012 2013 Source: IMS Health Journal Sentinel 23 23 24 24 6
Medical and Recreational Marijuana Choice of Pharmacy Legislation Medical Marijuana 20 states and the District of Columbia have approved the use of medical marijuana Utah and Cannabis Oil Florida Ballot Initiative Recreational Marijuana Colorado and Washington 2014 Ballot Initiatives - Oregon, DC, Alaska Michigan Cities The 2016 Horizon California, Arkansas, Ohio, Montana, New Hampshire, Missouri, Minnesota Maryland New York Alabama Arizona Iowa (general provider choice) Missouri Mississippi West Virginia 25 25 26 26 Choice vs. Directed Pharmacy Networks Benefits of Directed Networks $3.50 Allow immediate application of PBM clinical tools Ensure compliance with treatment guidelines, generic mandates, and closed formulary $3.00 $2.50 $2.00 $1.50 $1.00 $2.24 $2.06 $1.77 $1.86 $2.58 $2.27 $2.09 $1.82 $3.17 $2.79 $2.32 $1.91 Quick access to data and trending tools to prevent run-away claims Reduce paper bills, duplicate billing, and associated administrative costs Enable lower transaction costs due to PBM contract rates $0.50 $0.00 2010 2011 2012 In-Network Retail In-Network Speciality Providers Out-of-Network Bill Review Out-of-Network Non-Bill Review TRENDS IN MICHIGAN WORKERS COMPENSATION 27 27 7
Physician Dispensing Change in 2012 1,600.00 1,400.00 1,200.00 1,000.00 800.00 600.00 400.00 200.00 2012 2013 The Workers Compensation Research Institute is currently doing an analysis of Michigan data. If the data tracks like other states post reform, the WCRI study should indicate reduced costs. 0.00 Cost Per Claim - All Drugs Cost Per Claim - Opioids WARNING: Gaming the Manufacturer s NDC 29 29 30 Encourage/Require Managed Care Lower Pharmacy Costs Reduce Administrative Burden Improve Overall Claim Outcome Predictive Analysis WHAT ELSE CAN MICHIGAN DO? Predictive power of variables change over time. 32 32 8
What Else Can Michigan Do? Thank you! Compounded Medications Opioid Analgesics Implement Gate-keeping Tools Pre-Authorization Rationalize Reimbursement Demonstrated Efficacy Intelligent Use of PDMP Data Drug Monitoring Stricter Prescribing Guidelines Closed Formulary with PBM Overlay - Best of Both Worlds Brian Allen Vice President, Governmental Affairs brian.allen@helioscomp.com 33 33 9