Author: WorkCompAcademy

A dozen years ago, the federal government came down hard on Purdue Pharma, fining the drugmaker and three of its executives a record $634 million for misbranding its blockbuster OxyContin pill as safer and less addictive than other painkillers.

Plaintiff attorneys argue that drug manufacturers continued the aggressive marketing even after the Purdue fine. New details about the marketing campaigns are revealed in the corporate documents and internal emails unsealed in the Cleveland case after a year-long legal fight by The Washington Post and the owner of the Gazette-Mail in Charleston, W.Va.

Drug manufacturers paid doctors and movie stars to promote more aggressive pain treatment. The companies also created campaigns for their sales forces, tying bonuses to opioid sales and holding contests to reward top earners.

As the marketing campaigns unfolded, representatives from industry-funded groups that advocate for pain patients fanned out across the country to speak on TV shows, at conferences and dinners and to doctors at continuing medical education seminars, the court documents show. The groups included the American Pain Foundation and the American Pain Society, which have since gone out of business.

Drug manufacturers have rejected the plaintiffs’ arguments. They said that their sales and marketing teams did not misrepresent the safety of opioids.

But, last August, a judge in a lawsuit in Oklahoma ruled that Johnson & Johnson and its subsidiary Janssen had engaged in “false, misleading, and dangerous marketing campaigns.” The company also provided incentives for its sales force. The company produced a PowerPoint presentation that promised prizes for those who sold the highest amounts of Nucynta, an extended-release opioid. The prizes included a Caribbean cruise, “His and Hers” Tourneau watches and a Sony home theater system.

In its statement, Johnson & Johnson said, “In the Oklahoma trial, the State did not produce a single doctor who testified that they were misled by a Janssen marketing communication.”

Oklahoma Judge Thad Balkman ultimately ordered Johnson & Johnson to pay $465 million to abate one year’s worth of damage done by opioids in the state. The company is appealing.

The first case in the Ohio lawsuit, involving Summit and Cuyahoga counties, was recently settled for more than $325 million by multiple drug companies, including McKesson Corp., Cardinal Health, AmerisourceBergen, Johnson & Johnson, Mallinckrodt and Teva Pharmaceutical Industries. The remaining 2,500 cases, as well as lawsuits filed by most of the state attorneys general, are still pending.

In the Ohio case, the newly unsealed documents delve deep into the marketing strategies of the companies.

Former FDA commissioner David A. Kessler, a paid expert for the plaintiffs, said in a recently unsealed deposition in the Cleveland case that this “highly sophisticated” and overwhelming marketing of opioids “changed American medicine.”

The efforts “range from regional advisory boards to the speaker’s bureaus, to the e-marketing to doctors, to the alternative channels, to the advocacy groups, to the unbranded publication plans,” Kessler said, referring to materials that did not disclose they were funded by drug companies.

Kessler said that the paid appearances on television and at conferences usually featured the highest-prescribing doctors and were meant to transform the public perception of opioids and encourage other doctors to prescribe them more freely.

Total national healthcare spending in 2018 grew 4.6 percent, which was slower than the 5.4 percent overall economic growth as measured by Gross Domestic Product (GDP), according to a study conducted by the Centers for Medicare & Medicaid Services (CMS).

As a result, the share of the economy devoted to health spending decreased from 17.9 percent in 2017 to 17.7 percent in 2018. Growth in overall healthcare spending has averaged 4.5 percent for 2016-2018, slower than the 5.5 percent average growth for 2014-2015. The growth in total national healthcare expenditures was approximately 0.4 percentage point higher than the rate in 2017 and reached $3.6 trillion in 2018, or $11,172 per person.

According to the report, private health insurance, Medicare, and Medicaid experienced faster growth in 2018. The faster growth for these payers was influenced by the reinstatement of the health insurance tax which was applied to private health insurance, Medicare Advantage, and Medicaid Managed care plans.

— Private health insurance spending (34 percent of total health care spending) increased 5.8 percent to $1.2 trillion in 2018, which was faster than the 4.9 percent growth in 2017. The acceleration was driven in part by an increase in the net cost of private health insurance.
— Medicare spending (21 percent of total health care spending) grew 6.4 percent to $750.2 billion in 2018, which was faster than the 4.2 percent growth in 2017.
— Medicaid spending (16 percent of total health care spending) increased 3.0 percent to $597.4 billion in 2018. This was faster than the rate of growth in 2017 of 2.6 percent.
— Out-of-pocket spending (10 percent of total health care spending) grew 2.8 percent to $375.6 billion in 2018, which was faster than the 2.2 percent growth in 2017.

Health care spending growth was mixed in 2018 for the three largest goods and service categories – hospital care, physician and clinical services, and retail prescription drugs.

— Hospital spending (33 percent of total healthcare spending) increased at about the same rate in 2018 as in 2017, growing 4.5 percent and 4.7 percent, respectively, to reach $1.2 trillion in 2018.
— Physician and clinical services spending (20 percent of total healthcare spending) increased 4.1 percent to reach $725.6 billion in 2018. This was slower than the rate of growth in 2017 of 4.7 percent.
— Retail prescription drug spending (9 percent of total healthcare spending) grew 2.5 percent in 2018 to $335.0 billion following slower growth of 1.4 percent in 2017.

The 2018 National Health Expenditures data and supporting information will appear on the CMS website.

Hospital groups on Wednesday filed a lawsuit to stop the Trump administration’s price transparency rule that requires hospitals to disclose negotiated rates with insurers.

The suit, filed by the American Hospital Association (AHA), among other hospital groups, argues that the Centers for Medicare and Medicaid Services (CMS) rule violates the First Amendment by provoking compelled speech and reaches beyond the intended meaning of “standard charges” transparency in the Affordable Care Act.

The groups filed the suit in the U.S. District Court in Washington and are asking for an expedited decision to prevent hospitals from needing to prepare for the rule if it is ultimately ruled unconstitutional.

The hospitals argue that the efforts and cost required to follow the rule are overreaching as they would be required to release massive spreadsheets with data on negotiated drugs, supplies, facility and physician care prices. The estimated cost to hospitals to follow the rule is between $38.7 million to $39.4 million.

“The burden of compliance with the rule is enormous, and way out of line with any projected benefits associated with the rule,” according to the suit.

The suit also alleges the Department of Health and Human Services (HHS) does not have the authority to enforce the rule, according to a release from the AHA.

“Instead of giving patients relevant information about costs, this rule will lead to widespread confusion and even more consolidation in the commercial health insurance industry,” Rick Pollack, president and CEO of AHA, said in the release. “We stand ready to work with CMS and other stakeholders to advance real solutions for patients.”

The rule, which was finished last month, is part of the Trump administration’s efforts to increase price transparency and to develop more competition within the health care industry, moves which they say would help lower medical costs.

White House officials have said that a lack of cooperation from hospitals on the regulation indicates they are prioritizing themselves over consumers.

“Hospitals should be ashamed that they aren’t willing to provide American patients the cost of a service before they purchase it,” HHS spokeswoman Caitlin Oakley said. “President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed health care decisions and will continue to fight for transparency in America’s health care system.”

The hospitals say the rule will have the opposite of the intended effect and cause competitors to increase prices to match their rivals to a point where consumers will decide against receiving care.

The Association of American Medical Colleges, the Children’s Hospital Association and the Federation of American Hospitals also signed onto the suit.

For most of this decade, the average medical cost per indemnity claim in California has declined. Anti-fraud measures by the Department of Industrial Relations (DIR), the California Department of Insurance (CDI), local district attorneys and insurer special investigative units also contributed to the significant reduction in medical costs. As part of this effort, the DIR has, as of August 2019, indicted and/or suspended more than 500 medical providers from participating in the California workers’ compensation system.

In 2018, the WCIRB published a study evaluating the potential impact of medical fraud enforcement.

The 2018 study showed that over 7% of total medical payments were made to Indicted Providers, who rendered more than 4% of the medical services in the second half of 2012. By the second half of 2017, the shares of both medical payments and transactions to these Indicted Providers had fallen by over two thirds.

The WCIRB has now released Treatment Patterns of Medical Providers Indicted for Fraud in California Workers’ Compensation, a follow-up analysis to its 2018 study that evaluated the potential impact of medical provider fraud enforcement.

The new research brief compares the treatment patterns and types of services rendered by indicted/suspended providers (indicted providers) to non-indicted/suspended providers (other providers) as well as the regional variations and differences in treatment levels on cumulative trauma (CT) claims. The WCIRB’s findings include:

The average total medical paid per indicted provider was 10 times higher than other providers between 2013 and 2018, largely because indicted providers treated significantly more injured workers and rendered more services per injured worker.

The shares of medical payments for medical-legal (ML) and medical liens of indicted providers were two to three times higher than other providers. Indicted providers were also paid a significantly higher share for complex office visits and ML evaluations.

Indicted providers in the Los Angeles Basin accounted for about half of indicted providers linked to WCIRB data, but they received more than 90 percent of the medical payments made to these indicted providers. The share of indemnity claims involving CT within the LA Basin was consistently higher for indicted providers between 2013 and 2015, yet the pattern did not hold in 2016.

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) released the 2019 WCIRB Geo Study, which underscores regional differences in claim characteristics across California. The web-based interactive map allows you to quickly view key measures across regions.

The study’s key findings include the following:

— Even after controlling for regional differences in wages and industrial mix, indemnity claim frequency is significantly higher in the Los Angeles Basin and significantly lower in the San Francisco Bay Area.

— Regional differences in indemnity claim frequency have been fairly consistent over time and across industries. The LA/Long Beach region has had the highest frequency, and the Peninsula/Silicon Valley region has had the lowest frequency during all available years. The difference between these regions has grown in each of the last two years. Since 2013, the largest improvement in relative indemnity claim frequency is in the Fresno/Madera region, and the greatest deterioration has been in Orange County and the Imperial/Riverside region.

— Regional differences in severity are more muted than in frequency. Even after controlling for regional differences in industrial mix, limited average incurred on indemnity claims is highest in the San Luis Obispo, Santa Barbara and Ventura regions and lowest in the San Bernardino/West Riverside region.

— Pharmaceutical costs throughout the state have dropped dramatically over the last several years, and the prevalence of opioid prescriptions for claims with pharmaceutical payments has also dropped dramatically. The largest decreases in pharmaceutical costs have occurred in Southern California regions, which had the highest pharmaceutical spending at the beginning of the study period. This has decreased the differences in pharmaceutical costs across regions over time.

— The share of cumulative trauma claims as a percent of all claims is much higher in the Los Angeles Basin than in other parts of the state, and that gap has generally widened over time.

— Both medical-legal costs and paid allocated loss adjustment expenses (ALAE) are significantly higher in the Bakersfield and Los Angeles Basin regions than in the remainder of the state.

— The share of open indemnity claims has decreased substantially in all regions since 2013. The largest decreases have been experienced in the Los Angeles Basin regions that had the highest initial open indemnity claim shares. These changes have narrowed regional differences over time.

— Incurred loss development regional differences observed were relatively modest. In general, development appeared higher than average in more urban areas, with the highest in the Los Angeles/Long Beach region and the lowest in the Fresno/Madera region.