For numerous years, a slightly varied version of essentially the same proposed legislation regarding Workers’ Compensation Medicare Set-Asides continues to be re-introduced in Congress. This year the MSA Bill was again introduced in the Senate. It is titled “Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2018.”  The Bill has generally failed to gain traction and support year after year.

The MSA Bill seeks to formally legislate guidelines around the WCMSA process. Currently, the MSA and CMS review process have never been formalized in statute or legislation. All CMS guidance around protection of Medicare’s interest has been issued via administrative guidance (i.e., the WCMSA Reference Guide, CMS memoranda, etc.).

While the Medicare Secondary Payer Act (MSP) does clearly indicate that Medicare should not pay where a beneficiary has received primary payment and MSAs in settlements with Medicare beneficiaries have become a de facto Best Practice in the industry, the MSP and its corresponding regulations have never explicitly addressed the MSA and CMS approval process.

Essentially, the MSA Bill would provide formal regulatory teeth to the WCMSA approval process that never previously existed. As such, the industry has been hesitant to provide CMS extra teeth into its currently voluntary MSA review program.

When the MSA Bill was initially formulated close to ten years ago, the industry was experiencing many difficulties with CMS’ current contractor regarding inconsistencies in approvals, high/unreasonable Part D allocations in the WCMSA, and long turnaround times.

However, the current and last contractor have become more consistent in their review policies, and turnaround times are reasonable. With all necessary documentation, CMS reviews WCMSAs within 3-4 weeks. As such, there is not currently a strong desire for WCMSA reform.

That’s not to say that the CMS review process is without flaw. Overallocation of prescription drugs, particularly opioids, continues to be an issue that such over-use potentially could cause long-term health issues for the beneficiary. Further, outside of a limited Re-Review/Amended Review process, no appeal process providing full due process in our court system exists; a CMS determination is final.

Changes from the last version of the MSA Bill include: Removal of the threshold for settlements under $25k where the plan wouldn’t be considered primary (the Bill now seems to indicate there is no threshold to make a plan primary) and removal of all the Qualified MSA language (this was proposed in the prior Bill to make an MSA considered final and adequate without CMS review).

The MSA Bill provides that the MSA shall include payment for “items and services” covered by the workers’ compensation law or plan. “Items and services” are technically not prescription drugs as defined under the MSP. Does this MSA Bill seek to exclude Part D prescription drugs from the MSA? That is not clear, and this point is ambiguous in the text proposed.

Overall, the MSA Bill is vague and missing out on a number of components more pressing and needed in WCMSA Reform.

Doctors who are cutting back on prescribing opioids increasingly are opting for gabapentin, believed to be a safer, non-narcotic drug. The anticonvulsant is available in generic form and sold under the brand names Neurotonin and Gralise, among others. However, recreational use and abuse of the prescription drug is on the rise, and the increase has raised concern among officials in several states.

The Food and Drug Administration has approved gabapentinoids for the treatment of postherpetic neuralgia (gabapentin and pregabalin), fibromyalgia (pregabalin), and neuropathic pain associated with diabetes or spinal cord injuries (pregabalin).

Past marketing practices also help explain the growing use of gabapentinoids for various types of pain. The manufacturer (Parke-Davis, a subsidiary of Warner-Lambert, which was later acquired by Pfizer) engaged in an extensive marketing campaign to increase off-label prescribing of Neurontin for pain.

On the street gabapentin pills, known as “johnnys” or “gabbies,” which often sell for less than a dollar each, enhance the euphoric effects of heroin and when taken alone in high doses can produce a marijuana-like high.

Gabapentin is currently not a controlled substance in the United States, so federal authorities do not consider it a drug with a high potential for abuse. But recent data indicate that the drug promoted as an alternative to opioids is one to watch as gabapentin-related complications and overdose deaths are increasing.

Gabapentin is now one of the most popular prescription drugs in the United States, according to the New England Journal of Medicine. It was the 10th-most-prescribed medication in 2016. Its more expensive cousin, pregabalin, sold as Lyrica and also made by Pfizer, was the eighth best-selling.

Some states have taken note of the increase in use and are pursuing stricter measures for access to the drug.

Gabapentin was the No. 1 drug dispensed in Ohio in December 2016, according to the Ohio Board of Pharmacy. In that same year, the medication was dispensed at a greater rate than any other controlled substance. This information promoted the Ohio Substance Abuse Monitoring Network to issue an alert about the illicit use of gabapentin across the state.

Kentucky designated gabapentin as a Schedule 5 controlled substance in July 2017. The regulation requires authorized practitioners to be properly licensed and registered with the DEA before they can dispense the medication.

West Virginia is also tracking gabapentin abuse and may introduce legislation in January 2018 that would aim to classify it as a controlled substance in the state. Gabapentin has market value on the streets and it is being abused according to the definition of a scheduled drug, Dr. Brad Henry, president of the West Virginia State Medical Association, told the newspaper.

According to the Charleston Gazette-Mail, “In a recent month, West Virginia pharmacies filled prescriptions for 5.8 million gabapentin tablets – more than the combined number of doses of two popular painkillers, hydrocodone, and oxycodone.”

Ohio also has been monitoring gabapentin prescriptions for more than a year.

People who have abused gabapentin and now find themselves addicted to the drug are advised to avoid going cold turkey. Instead, a professional addiction recovery treatment program is well advised..

Orange County prosecutors charged three defendants with defrauding a workers’ compensation insurance company by misrepresenting uninsured injured workers as employees of a different company.

They are also charged with failing to report wages, withhold payroll taxes, and pay employment taxes for wages earned to California Employment Development Department (EDD).

The three defendants are Veronica G. Lake, 47, of Mission Viejo, Luis Enrique Perez, 49, of Yorba Linda and Scott Wesley Smith, 36, who lives in Orange.

In 2013, Luis Perez owned and operated several temporary employee staffing companies including BaronHR, LLC.

Lake worked for Perez as his Controller, while Smith worked as the Director of Safety.

In September 2013, Smith formed Titan Personnel, Inc. and acted as its CEO, CFO, Secretary and sole Director.

Despite losing its workers’ compensation insurance on July 1, 2013, Perez is accused of unlawfully continuing to operate BaronHR and contract with outside companies to provide temporary employees.

Between December 2013 and September 2014, the defendants are accused of conspiring to fraudulently report 47 injured employees of BaronHR as employees of Titan to American International Group, Inc. (AIG) to avoid liability for its employees who were injured at work, and to hide BaronHR’s failure to obtain workers’ compensation insurance as mandated by law.

As a result, AIG became liable for approximately $393,000 worth of expenses for claims of individuals not covered by their insurance policy.

The defendants are further accused of conspiring to commit tax fraud by failing to report, withhold, and pay employment and personal income tax for 36 BaronHR employees, including individuals they attempted to report to AIG as Titan Personnel employees, to the EDD.

Two years ago the Court of Appeal opened the Pandora’s box of potential litigation against utilization review physicians in a published decision. The California Supreme Court agreed to review the case, and just reversed the Court of Appeal in Kirk King v Comppartners, Inc..

Kirk King suffered anxiety and depression due to chronic back pain resulting from the back injury at work in 2008. In 2011, he was prescribed an anti-anxiety medication known as Klonopin to be provided through Workers’ Compensation. The request for this medication was sent to Utilization Review.

Naresh Sharma, M.D, an anesthesiologist who conducted the utilization review determined the drug was unnecessary and decertified it. As a result, Kirk was required to immediately cease taking the Klonopin. Typically, a person withdraws from Klonopin gradually by slowly reducing the dosage. Due to the sudden cessation of Klonopin, King suffered four seizures, resulting in additional physical injuries.

In September 2013 another request for Klonopin was made by the PTP. Ali, a psychiatrist, conducted a second utilization review and also determined Klonopin was medically unnecessary. Neither Sharma nor Ali examined Kirk in-person, and neither warned Kirk of the dangers of an abrupt withdrawal from Klonopin. Sharma and Ali were employees of CompPartners a Workers’ Compensation utilization review company.

King then sued CompPartners, Inc. and Sharma for (1) professional negligence; (2) negligence; (3) intentional infliction of emotional distress; and (4) negligent infliction of emotional distress. Kirk’s wife, Sara King, sued for loss of consortium. The trial court sustained defendants’ demurrer without leave to amend. The Court of Appeal sustained the demurrer but reversed the denial of leave to amend.

The Court of Appeal decision concluded that the trial court “should have granted the Kings leave to amend because it is possible… that, when more details are provided they could support a conclusion that, under the circumstances, the scope of Sharma’s duty included some form of warning Kirk of or protecting Kirk from the risk of seizures.”

However, the California Supreme Court viewed the case differently. It concluded that the workers’ compensation law provides the exclusive remedy for the employee’s injuries and thus preempts the employee’s tort claims.

The Supreme Court said it is by now well established that the exclusivity provisions preempt not only those causes of action premised on a compensable workplace injury, but also those causes of action premised on injuries collateral to or derivative of’ such an injury. Such collateral or derivative injuries include injuries stemming from conduct occurring in the workers’ compensation claims process.

In performing their statutory functions, utilization reviewers, much like independent claims administrators, effectively stand in the shoes of employers. Thus, the Court concluded that “the exclusive remedy for the Kings’ injuries lies within the workers’ compensation system.”

The battle over high prescription drug prices, unsurprisingly, involves ample amounts of finger-pointing.

Drug manufacturers point to pharmacy benefit managers (PBMs), the powerful middlemen who administer drug coverage for insurers.

The drugmakers argue that the industry practice of providing rebates to large PBMs forces them to raise list prices, and provides PBMs with a perverse incentive to favor pricier drugs in their formularies.

They also charge that the PBMs pocket too much of the rebates to pad their profits, leaving consumers to pay higher prices.

Drugmakers say they are under pressure to provide rebates to the few PBMs that dominate the market, which include CVS, Express Scripts and UnitedHealth’s Optum, and that those payers do not pass on enough of those savings to patients – a contention the PBMs dispute.

The drugmakers say the rebates force them to raise the price of their therapies over time to preserve their business.

PBMs counter that the drug makers are responsible for their high prices, and that there’s no correlation between rebates and rising prices. They say their purpose is to drive down prices for their clients, and they can point to research that shows that most of the money spent on pharmaceuticals in the U.S. goes to the drug makers.

The Trump administration has targeted PBMs and rebates as a key part of its blueprint to lower drug costs. “We’re very much eliminating the middlemen,” President Trump said in announcing the blueprint back in May.

And the Department of Health and Human Services last month proposed regulations to crack down on rebates.

While the PBM industry has challenged that regulatory move, arguing that eliminating rebates would have to be done via congressional legislation, in an interview with Reuters on Friday, Health and Human Services Secretary Alex Azar, a former executive at drugmaker Eli Lilly, said that eliminating rebates was within his agency’s power.

“The question of rebates may very well be fundamental to the issue of how you reverse these constant incentives to higher list prices (for medicines),” Azar told Reuters. But, Yasmeen Abutaleb writes, “He did not say when such new regulations, which are being reviewed by the Office of Management and Budget, might take effect.”