The Effects of Physician-Dispensing in Workers' Compensation IAIABC Webinar September 2014 Prepared by Paul Kauffman and Dr. Dan Hunt 200 N. Grand Ave. of 36 1 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Disclaimer The views expressed in this presentation are our own and do not necessarily represent the position of Accident Fund Holdings Inc., or any subsidiaries. Paul Kauffman, director of Medical Program at Accident Fund Insurance Company of America Paul.Kauffman@accidentfund.com Dr. Dan Hunt, Corporate Medical Director at Accident Accident Fund headquarters in Lansing, Fund Holdings, Inc. MI. Dan.Hunt@accidentfund.com 200 N. Grand Ave. of 36 2 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Who are We? 100 years old - Established in 1912 in Michigan One of the largest monoline workers’ compensation carriers in the country We insure over 46,000 employers in 18 states Covering approximately 1 million workers Averaging over 20,000 claims per year Over $550 million in claim cost last year Having 90,000 treating providers in 120,000 locations 200 N. Grand Ave. of 36 3 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Awards & Accomplishments IASA and Ward Group Technology Innovation Award 2013 for Care Analytics – Early Detection Best’s Review Magazine Innovation Showcase Award 2013 for Care Analytics - Early Detection Guidewire Process Innovation Award 2012 for Care Analytics – Provider Direct Featured our research on cover of the Sunday Newspaper in June 2, 2012 The Effect of Opioid Use on Workers' Compensation Claim Cost in the State of Michigan published in August, 2012 The Effect of Physician Dispensing on Workers’ Compensation Claims in the State of Illinois in May, 2014 200 N. Grand Ave. of 36 4 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Objectives of Presentation 1. Understand the unique nature of workers compensation in payment for medications. 2. Know the history behind physician dispensing. 3. Identify the stakeholders of physician dispensing. 4. Understand the pathway of physician dispensing 5. Recognize impact of research results for Illinois Key Takeaways physician dispensing 6. Be aware of current and proposed solutions to physician dispensing 200 N. Grand Ave. of 36 5 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Our Medical Intelligence Challenge Industry in Constant State of Flux Medical Technology Advancing Rapidly Coding/Billing Practices Evolving Providers are Entering and Leaving WC New Healthcare Legislation Economic Landscape Changes Daily Physician Groups are Consolidating Workforce is Aging It's not the strongest of the species that Pain Medications are more Potent survives, nor the most intelligent that survives. It is the one that is most adaptable to change. Our Business is Transforming -Charles Darwin 200 N. Grand Ave. of 36 6 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Differences State by State Each State is Different Constraints on Medical Care Use of Evidence Based Guidelines Benefit Structure Unique Administrative System and Efficiency Governing Statues Compensation Rates Industry Mix How can you be expected to govern a country Population and Cost of Living Levels that has 246 varieties of cheese? -Charles de Gaulle 200 N. Grand Ave. of 36 7 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Our Business Challenge Distribution Of Paid Values By Accident Quarter Attributed to 100.0% Change in Economy 90.0% 80.0% Medical Exceeds Indemnity 70.0% Identification Driven by Utilization of Trend 60.0% and Cost Inflation 50.0% 40.0% 65% 30.0% Varies by State 20.0% 10.0% 0.8% 0.6% 20.7% 0.0% 2002 - 1 2002 - 3 2003 - 1 2003 - 3 2004 - 1 2004 - 3 2005 - 1 2005 - 3 2006 - 1 2006 - 3 2007 - 1 2007 - 3 2008 - 1 2008 - 3 2009 - 1 2009 - 3 2010 - 1 2010 - 3 2011 - 1 2011 - 3 Accident Quarter % Indemnity % Medical % Expense % Legal 77.9% 200 N. Grand Ave. of 36 8 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Medical Management Changes Exercise in Multitasking Skills. How Many Claims Can You Manage How Accurate Can You Estimate Cost When Do you Get Medical Staff Involved Is Treatment Appropriate and Necessary How Much Can You Document Are You Communicating with Provider Are You Communicating with Injured Worker One cannot manage too many affairs: like pumpkins in the water, one pops up while you Are You Communicating with Employer try to hold down the other. How Many and What Kind of Resources -Chinese Proverb 200 N. Grand Ave. of 36 9 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Injury Types Remain Constant 100% Burn Top 10 Injury Types by Spend Multiple 90% Fracture Puncture 80% Foreign Body Types of Injures Sprain 70% Consistent Over Time Other Specific 60% Contusion 50% Fluctuations +/- 2% 40% Across all ICD Groups Laceration 30% Strain 20% 16% 10% 18% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 30% Accident Year 7% Injuries that occur today occurred in the same proportions and with 7% the same frequency over a decade ago. No discernable shift in 4% 3% 5% 5% 5% injury mix. 200 N. Grand Ave. of 36 10 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Prescribing Patterns are Changing Top 5 Therapeutic Classes by Volume 100% 90% Other 10% increase in volume of 80% Opioid scripts Blood Thinners 70% Antidepressants 3% increase in volume of Anti- 60% Anticonvulsants inflammatory scripts 50% Anti-inflammatory 40% Opioids comprise 3% of our Medical Spend and 46% of our 30% scripts Opiate Agonist 20% 13.14% 10% 10.67% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 4.86% Accident Year 46.04% 1.28% 70% of our injured workers that participated in the pharmacy benefits program were prescribed at least one narcotic script. Compared to 55-85% for industry. 24.01% 200 N. Grand Ave. of 36 11 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Lead to a publication in the Study #1 – Impact of Opioids Journal of Occupational and on Claim Cost Environment Medicine in 2012 Research Collaboration between Accident Fund Holdings, Inc. and Johns Hopkins School of Medicine at beginning of 2011 200 N. Grand Ave. of 36 12 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Opioids Increase Cost and Duration of Claim Odds Ratios and 95% Confidence Intervals of Opioid Prescriptions Associated with Final Cost >= $100,000 (Multivariate Logistic Regression Controlling for Age, Sex, Lost time, Distinct ICD 9 Codes, and Legal Involvement) SA = Short Acting LA = Long Acting or Extended Release 8.00 Drugs Number Ave Magnitude 7.00 6.89 of Claims Claim Cost to No Rx 6.00 5.00 No Rx 4,794 $13,295 N/A Odds Ratio 4.00 3.94 Other Scripts 4,156 $16,918 1.3x 3.00 2.51 2.25 2.00 2.04 SA Only Scripts 3,063 $47,742 3.6x 1.76 1.36 1.23 1.00 0.91 Ever LA Script 213 $156,748 11.8x 0.00 Other Prescriptions vs. No SA Opioid Only Prescriptions Ever LA Opioid Prescriptions Prescription vs. No Prescription vs. No Prescription AFHI indemnity claims opened and closed from 1/1/2006 to 2/28/2010 in the state of Michigan. Opioid Prescription Type Data adjusted for injury complexity. 200 N. Grand Ave. of 36 13 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Drug Trends in Work Comp Treating Provider Pharmacy Injured Worker Financial Incentive Addiction/Dependence Multi-prescribers checks Limited use of EBM Pill Mills Doctor Shopping guidelines Drug Diversion Falsifying Best Price to Medicare Lack of Utilization Controls Good Manufacturing Practices (GMP) Purchase on Internet Major Dispensing Burglary and Robbery Calling in Prescriptions Challenge Repackaging Stealing Rx Pads Today Medicaid Fraud Compounding Brand Substitution with Generics Altering Prescriptions No Drug Monitoring Forged Prescriptions Relabeling or Misbranding Off Label Marketing Counterfeit Pharmaceuticals Multiple Identities = Most Prevalent in Work Comp from Our Experience 200 N. Grand Ave. of 36 14 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Utilization & Cost by Place of Service Report Period: 1/1/2008 – 1/1/2013 $0.70 Utilization Dominated Price Dominated 60% $0.60 57% Increasing Physician $0.50 Dispense $0.40 33% $0.30 27% 24% 22% 18% $0.20 16% 8% $0.10 7% 7% 6% 4% 4% 3% 3% 1% 0% 0% 0% 0% $0.00 Emergency Room - Pharmacy Other Physician Office Outpatient Hospital Ambulatory Surgical Inpatient Hospital Hospital Center % Total Medical Cost % Total Medical Services % Total Rx Services 200 N. Grand Ave. of 36 15 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Paying for Drugs in Work Comp Work Comp company Health Insurance Company responsible for any and all establishes a contract with medication payments deemed patient on what will be paid necessary or appropriate by and when. Exclusions and physician. Fee set by physician rates are agreed upon or pharmacy with within contract prior to reimbursement limited in some execution. states. 200 N. Grand Ave. of 36 16 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
Drug Sample vs Physician Dispensing Traditionally free samples provided as patient leaves office to get them started on medications for first few days for convenience and promotion to drug company. This is NOT Physician Dispensing as the provider does not profit directly from this. 200 N. Grand Ave. of 36 17 PO Box 40790 Lansing, MI 48901-7990 www.afhi.com
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