Category: Daily News

The Wall Street Journal reports that workplace injury is one of the main reasons doctors prescribe opioids, and dependence has become an expensive problem for those paying workers’ comp claims. Workers’ compensation payers spent $1.54 billion on opioids in 2015, or 13% of total U.S. spending on opioids, according to an analysis by CompPharma LLC.

Companies that handle claims for those injuries are trying new programs that push workers toward alternative pain treatments and that make it harder to get prescriptions for potentially addictive drugs – all intended to get people back to work without getting hooked, companies say.

Workers compensation brokers, insurers and administrators, such as Lockton Companies LLC., Liberty Mutual Group Inc. and Broadspire Services Inc. are using predictive algorithms and behavioral health screens to assess an individual’s risk for dependency, and steering some injured workers to alternate treatments such as over-the-counter drugs and mental-health counseling in lieu of prescription opioids. Such programs are aimed at preventing abuse, rather than treating it after the fact.

“We were not capturing opioids early enough. We were catching them once they were already at a high dosage,” said Jacob Lazarovic, chief medical officer of Broadspire, which administers workers comp claims for self-insured employers and insurers.

When an injured worker is first prescribed a drug like Fentanyl, Broadspire mails an opioid education packet to both patient and doctor, and tracks refills. Claims are reviewed after 10 weeks to check whether the patient is still taking opioids. Broadspire then works with the physician to make plans for weaning the patient off the drugs, he says.

In a test of the program, opioid prescriptions fell by 14% compared with a control group, the company says.

Insurer Travelers Cos. has developed an algorithm that analyzes thousands of claims and identifies the likelihood that an injured employee will develop chronic pain. Certain conditions, such as a prior case history of anxiety or depression, increase the chance that a patient will experience chronic pain, said Adam Seidner, Travelers’ medical director.

Those deemed at risk for chronic pain and addiction receive recommendations for alternate therapies, such as physical therapy and mental-health counseling, Dr. Seidner said.

Travelers says it cannot prevent a physician from prescribing opioids for at-risk patients, but it does urge care providers to follow a plan for alternate therapies and can refuse to authorize payment for a painkiller prescription, depending on state law.

Travelers says its algorithm, used in 20,000 cases in the past year, has helped reduce individual claim costs by as much as 50%. The predictive model and other efforts have helped reduce opioid prescriptions by 23% in the past 12 months among covered workers, according to the company.

To some extent, the industry is trying to solve a problem it helped create. Researchers found that about 65% to 85% of injured workers received narcotic painkillers under workers comp, according to an analysis of 264,000 claims by the Workers Compensation Research Institute.

Insurance broker Lockton has piloted a program in which injured workers undergo behavioral health and other screenings to assess risk of developing long-term pain or addiction. Workers with telltale traits – such as a tendency to view situations in catastrophic terms – may be steered toward less-powerful drugs to treat pain or referred to therapists able to treat the underlying sources of pain, said Keith Rosenblum, a senior workers’ compensation strategist at Lockton.

“You are creating zombies when you give [injured workers] opioids and sedatives,” Mr. Rosenblum said. “This is preventable.”

According to estimates from the Survey of Occupational Injuries and Illnesses (SOII) conducted by the US Bureau of Labor Statistics (BLS) and the California Department of Industrial Relations (DIR), over 470,000 nonfatal workplace injuries and illnesses were reported by private-sector and public-sector employers in California in 2015.

However, California’s overall incidence rate of nonfatal occupational injuries and illnesses remains unchanged at 3.8 cases per 100 workers for full-time employees, the lowest rate in over a decade. There has been a steady decline in injury rates over the last decade. In 2002 the rate was 6 cases per 100 workers for full-time employees.

Of the nonfatal reportable job-related injuries and illnesses in 2015, 77 percent occurred in private industry and 23 percent in state and local government. Reported Days Away From Work incidence rates (injuries and illnesses per 10,000 workers) differ substantially between private-sector and government workers, whether state or local. In 2015, the reported rate of DAFW injury or illness among government workers was approximately twice that of private-sector employers. The Report does not speculate as to the reason for this discrepancy.

The Days Away From Work incidence rate for California private sector industries remained at 1.0 case per 100 workers, equaling the national rate. Nearly 83,000 DAFW injuries, or 76 percent of those in private industry, occurred in service-sector industries. The remaining 26,000 injuries, or 24 percent, occurred in goods-producing industries.

In 2015, employer reports for California show that occupational injuries are more prevalent and the rate of injuries per 100 higher among males than among females. Sixty percent of reported cases with days away from work (DAFW) were for male workers, with 40 percent for females. The incidence rate per 100 workers was also approximately 5 percent higher among males than females. Compared to 2014, the rates for both working men and women dropped in 2015 in private sector.

In 2015, 28 percent of reported Days Away From Work work injuries in private industry in California occurred among workers with less than a year of tenure. At goods-producing firms in the private sector, nearly 35 percent of DAFW injuries and illnesses occurred within a year of hire. In manufacturing, 25 percent of those injuries occurred within a year of hire; in construction and natural resources, however, 45 percent of those injuries occurred within a year of hire. Notably, in the natural resources and mining sector, nearly one-quarter of DAFW cases occurred during the first three months of work. The report does not speculate as to the reason why new hires have more injuries than long term workers.

The highest private-sector injury and illness rate in 2015 is among twenty- to twenty-four-year-olds, with the lowest injury or illness rates at the other end of the age spectrum, those above age sixty-five. Compared to 2014, the DAFW injury and illness incidence rate in 2015 for private-sector employers dropped among sixteen- to nineteen-year-olds, twenty-five- to thirty-four-year-olds and for those age forty-five to fifty-four, while it rose or stayed the same for other age groups.

Transportation and material-moving occupations, food service workers, building and ground maintenance, and office and administrative support work were the occupational groupings with the largest number of lost-time injuries and illnesses. Service occupations also showed high number of injuries and illnesses with reported days away from work in 2015.

Among private-sector workers, the highest number of lost-time injuries were caused by overexertion and bodily reaction, by contact with an object or piece of equipment, and by falls, trips, and slips. Other major causes of lost-time injuries and illness included exposure to harmful substances or environments, transportation incidents and workplace violence.

California employers have been dealing with the ramifications of legal medicinal marijuana for years. Now that voters have passed Proposition 64, legalizing so-called “recreational” marijuana use, the CWCI expects that employers face a new reality of potentially outdated workplace policies, employee accommodation, and the applicability of drug-free workplace guidelines. Workers’ compensation carriers and self-insured employers in particular must begin to consider the impact that Proposition 64 may have on claims processing.

According to the CWCI report “Working Through the Haze: Implications of Legalized Marijuana for California Workers’ Compensation System,” last August the National Conference of State Legislatures adopted a resolution asking the federal government to remove marijuana from Schedule I. But the following day, the Drug Enforcement Agency announced that it would not remove marijuana from its Schedule I classification, reaffirming its determination that the drug’s therapeutic value has not been scientifically proven. Thus it remains illegal under federal law. As a Schedule I drug under the Controlled Substances Act, marijuana may not be prescribed, administered, or dispensed, and it is illegal to possess, use, purchase, sell, or cultivate.

Thus, even in states where medical marijuana is legal, doctors can only write a “recommendation” for the remedy.

But the federal government has decided it has higher priorities than enforcement of its anti marijuana stance. The US Department of Justice has actually formalized a “hands-off’ policy, leaving enforcement of minor drug activity up to the states, while the federal government’s priorities have been restricted to eight significant issues, including the operation of drug cartels, narcotics activity leading to violence, and preventing drugs from being provided to minors. “For states … that have enacted laws to authorize the production, distribution, and possession of marijuana, the Department expects these states to establish strict regulatory schemes that protect the [priority] interests identified by the Department,” leaving the decision on whether to enforce restrictions on marijuana being sold to minors or trafficked to other states, federal authorities could step in with enforcement. Otherwise, states can decide to legalize, tax, and regulate marijuana.

Out of 25 states that allow medical marijuana, only five explicitly exempt workers’ compensation payers from liability for medical marijuana. And at least one state has no legislation or judicial case law either requiring or prohibiting workers’ compensation payers from reimbursing an injured worker for medical marijuana.

The remainder of the states that allow medical marijuana, including California, rely on analogous statutory language that precludes a private health insurer from being forced to pay for marijuana. In California, Health and Safety Code Section 11362.785(d) specifically provides that nothing in the state’s medical marijuana program shall require any other health insurance provider or health care service plan to be liable for reimbursement for the medical use of marijuana.

But there may be a developing trend toward compelled compensation, if other states follow the lead of New Mexico. Beginning with a New Mexico Supreme Court case in 2014, New Mexico has required reimbursement for medical marijuana pursuant to that state’s workers’ compensation statute requiring provision of “reasonable and necessary” medical treatment services to an injured worker.

And the trend toward finding compensability for marijuana treatment seems to be spreading. Beyond New Mexico, workers’ compensation payers have been required to reimburse payments for medical cannabis in Minnesota, Maine, Connecticut, and Massachusetts. In two cases from Maine, for example, the Appellate Division of the workers’ compensation system upheld rulings from an administrative law judge that marijuana could be a compensable form of medical treatment for injured workers.

Only two reported cases at the California WCAB have addressed a claims administrator’s liability for marijuana treatment. The first, in 2012, Cockrell v. Farmers, did not directly resolve the question of compensability for medical marijuana. Instead, the Appeals Board merely returned the matter to the trial level for consideration of the impact, if any, of the prohibition against payment for marijuana by health insurance providers under Health and Safety Code §11362.785(d). It appears the case was thereafter resolved by settlement. But in 2013, a second case, Pedro de Dios v. Carroll’s Tire Warehouse, specifically found that the workers’ compensation carrier was not liable for reimbursement of medical marijuana under the Health and Safety Code exemption.

David Miller is a stickler for safety at the Goodwill stores he runs in central California. So when Applied Underwriters offered his nonprofit a deal on insurance for workplace accidents if he could minimize injuries, he jumped at the opportunity. Even better, Applied was part of Berkshire Hathaway Inc., the firm controlled by Warren Buffett.

But according to the report in the Insurance Journal, these days, he wishes he hadn’t. The contracts Miller signed have turned into a burden for his organization. It paid $1.8 million to cover about 350 employees, many disabled or disadvantaged at 17 locations from Lodi to Visalia. When the nonprofit switched carriers last year, Applied demanded hundreds of thousands of dollars more to fund remaining claims.

“I’m trying to make money in my stores to help people,” said Miller, chief executive officer of Goodwill Industries of San Joaquin Valley. “Instead, I’m writing big checks to an insurance company that I probably don’t even owe.”

Miller’s nonprofit is one of dozens of employers – from a bike-courier service in Manhattan to a linen-supply company in Sacramento – that have sued Applied for deceptive practices. The businesses allege the insurer peddled products regulators hadn’t approved. They complain about being surprised by large bills based on formulas that stacked the deck in the insurer’s favor. California, Vermont and Wisconsin have banned some Applied plans.

The insurer says that its products save employers money and that customers were aware of the terms. Companies that are litigating account for only about one in 400 policies sold, said Jeffrey Silver, Applied’s lawyer. The plans didn’t work out in their favor because they had claims that caused costs to go up, he said. They’re now “taking advantage of a regulatory situation” to avoid paying what they owe. About 90 percent of employers renew, Silver said.

The Berkshire subsidiary agreed to orders by regulators in California, Vermont and Wisconsin to halt some of its sales. But the company continues to press its case in California, its largest market, where it has asked a state court judge to overturn the insurance commissioner’s decision that its plans were illegal.

“It’s an innovative product,” Silver said. “And sometimes when you have an innovative product, regulators take a while to catch up to it. And that’s exactly what we think is happening here.”

As courts weigh these quarrels, this much is clear: It’s a lot of hot water for one of Buffett’s companies. The billionaire, who didn’t respond to requests for comment, tells Berkshire managers that “there’s plenty of money to be made in the center of the court.” In other words, no need to get close to the line, legally or ethically, to make some extra bucks.

Yet Applied has done just that, according to court filings, public records and interviews with more than two dozen business owners, brokers, consultants, attorneys, regulators and former employees of the insurer. Together, they describe a company that profits by enticing employers to make a financial gamble, even though some say they didn’t fully understand the rules.

It’s hard to pinpoint Applied’s profit. The unit accounts for just a sliver of Berkshire’s insurance business, which also includes Geico and contributed about one-fifth of the $24 billion of net income at Buffett’s firm last year. But state regulatory filings show how lucrative Applied’s workers’ comp plans were. Net income at California Insurance, one of the company’s largest subsidiaries, rose to $65.5 million in 2014 from a loss of $4.4 million five years earlier.

Margins were fat, too. The same subsidiary made more than 35 cents on each dollar in premium revenue it collected every year from 2010 to 2014, while workers’ comp insurers in California posted, in aggregate, an underwriting loss, according to the state’s insurance regulator.

Research presented at the ANESTHESIOLOGY® 2016 annual meeting claimed that millions of people take opioids for chronic back pain, but many of them get limited relief while experiencing side effects and worrying about the stigma associated with taking them. The American Society of Anesthesiologists (ASA) is an educational, research and scientific society with more than 52,000 members organized to raise and maintain the standards of the medical practice of anesthesiology.

The presentation noted that more than 100 million people in the United States suffer from chronic pain, and those with chronic low back pain are more likely than patients with other types of pain to be prescribed opioids. Unfortunately, these medications are addictive and can cause side effects, ranging from drowsiness to breathing problems.

“Patients are increasingly aware that opioids are problematic, but don’t know there are alternative treatment options,” said Asokumar Buvanendran, M.D., lead author of the study, director of orthopedic anesthesia and vice chair for research at Rush University, Chicago, and vice chair of the American Society of Anesthesiologists (ASA) Committee on Pain Medicine. “While some patients may benefit from opioids for severe pain for a few days after an injury, physicians need to wean their patients off them and use multi-modal therapies instead.”

In the study, 2,030 people with low back pain completed a survey about treatment. Nearly half (941) were currently taking opioids. When asked how successful the opioids were at relieving their pain, only 13 percent said “very successful.” The most common answer – given by 44 percent – was “somewhat successful” and 31 percent said “moderately successful.” Twelve percent said “not successful.”

Seventy-five percent said they experienced side effects including constipation (65 percent), sleepiness (37 percent), cognitive issues (32 percent) and dependence (29 percent).

Respondents also had concerns about the stigma associated with taking opioids. Forty-one percent said they felt judged by using opioids. While 68 percent of the patients had also been treated with antidepressants, only 19 percent felt a stigma from using those.

A major pharmaceutical company recently agreed to disclose in its promotional material that narcotic painkillers carry serious risk of addiction and not to promote opioids for unapproved, “off-label” uses such as long-term back pain. Researchers also note a lack of solid studies on the effectiveness of opioids in treating back pain beyond 12 weeks.

Patients with chronic low back pain, persistent pain lasting more than three months, should see a pain medicine specialist who uses an approach that combines a variety of treatments that may be more beneficial, said Dr. Buvanendran. These treatments include physical therapy, bracing, interventional procedures such as nerve blocks, nerve ablation techniques or implantable devices, other medications such as anti-inflammatories and alternative therapies such as biofeedback and massage, he said.