Combating the Devastating Cycle of Prescription Cascades and Other WC Drug Cost Drivers

High prescription drug costs are a huge issue in workers' compensation, but there are a few ways to tackle the rising costs.
By: | October 2, 2019

For many Americans, the high cost of prescription drugs is a personal issue.

It’s a personal issue for me — my aunt is diabetic and has been deeply affected by the cost of insulin, which nearly doubled between 2012 and 2016. It’s a personal issue for the millions of Americans impacted by the opioid epidemic as pharmaceutical companies raised the price of Naloxone, the opioid overdose antidote.

Advertisement




And it’s personal for injured workers and their employers each year as they worry about whether or not they will be able to shoulder the cost of a pharmaceutical market that constantly keeps people asking which drug will be the next to see a price hike.

“First we saw Turing Pharmaceuticals do it with their drug Daraprim which is needed for patients with AIDS. Then we saw EpiPen raise its price to six times the 2004 price. We saw it with Insulin and now we’re seeing it happen with certain forms of Naloxone,” said Phil Walls, chief clinical officer at myMatrixx.

“What comes next? It has become a question of which life-saving drug is going to go through this type of price hike. That alone makes it a concern.”

Together with risk manager Will Franken, director of risk management at Seaboard Corp., Walls will be speaking about the high cost of prescription drugs and how these costs are impacting workers’ compensation at the 2019 National Workers’ Compensation and Disability Conference® & Expo in Las Vegas this November 6-8.

Specialty Drugs Carry Big Costs

One of the areas Walls identified as being a cost driver for workers’ compensation was specialty drugs.

“The specialty pharmaceutical market, which is limited, but it does have an impact on workers’ compensation, is another story. These are all very expensive drugs, but there’s a return on the investment,” Walls said.

Phil Walls, chief clinical officer, myMatrixx

Given the high cost of specialty drugs, however, it takes just one claim for workers’ comp payers to feel the weight of the expenditures. While specialty drugs can be highly effective at treating injured workers, an employee’s failure to take medication can lead to increased costs as prescriptions rack up.

“I heard a saying once and it’s very, very true: ‘The most expensive specialty drug is the one not taken,’ ” said Walls.

“If you’re treating someone for Hepatitis C, and if that patient isn’t compliant with the prescribed regimen, the doctor is going to measure the level of the virus in their system and they’re going to say ‘it didn’t work. We’re going to have to repeat this’ and repeating that course of therapy comes with a price tag of about a $100,000.”

Beware of the ‘Prescription Cascade’

Medications can cause side effects, no matter who or what is taking them. An injured worker prescribed medication with side effects cab lead their doctor to prescribe another medication to treat those side effects.

If the new medication causes other side effects, yet another drug could be prescribed, creating what Walls referred to as a “prescription cascade.”

To try and curb never-ending prescriptions, Walls recommends that workers’ comp payers work with a pharmacist to help prescribers avoid unnecessary prescriptions.

“We start working with that prescriber, developing weaning programs and making timelines and basically just trying to get the patient down to a manageable number of drugs,” he said.

“It’s sometimes felt like an uphill battle, but the physician community — and I think because of all of the media attention on opioids — is definitely much more receptive to a consult with a pharmacist today than they were maybe ten years ago.”

For myMatrixx, pharmacists interacting with prescribers has lead to positive results: “We’ve had very good outcomes. I think the stat that we’ve been quoting lately is that 71% of our interactions with the prescriber on a drug regimen results in at least one positive change,” Walls said.

Working with pharmacists to curb unnecessary prescribing can also help get injured workers off of dangerous drugs like opioids.

“I literally tell all my pharmacists, especially with all the overdoses we hear about, I tell them they are saving people’s lives by getting them off these dangerous drugs when there are safer alternatives available. You can’t put a price value on that,” Walls said.

Generics Bring Savings to Comp

Fortunately, many common drugs for workers’ compensation are either already available as generics or are on their way to becoming generics.

Advertisement




The recently-expired patent for Lyrica, which is frequently prescribed in workers’ comp for the treatment of nerve pain, has led way to generic versions of the drug entering the market in July.

As the opioid epidemic litigation wears on and Purdue Pharmaceuticals files bankruptcy, Oxycontin might lose its brand-name status as well.

“We basically have an industry that is being able to utilize almost exclusively generic drugs,” Walls said.

While generics can bring cut down on drug costs, most of those savings have already been gained, Walls noted.

“Generics — they’re great for saving money. But like I said it’s just a matter of time before well over 95% of drugs in this industry are or will be generics so there’s little extra to be gained just through generic substitution. And that’s good for everyone because then the focus will be on whether or not the drug prescribed – brand or generic – is the one most appropriate for that patient.” &

About the National Workers’ Compensation and Disability Conference® & Expo:

As the largest National Workers’ Comp and Disability Conference for more than 25 years, NWCDC offers endless opportunities that will propel your workers’ comp and disability management programs forward.  With the biggest Expo in the industry, you’ll be able to touch, compare and contrast the newest solutions from leading vendors in every category, and gain knowledge on-the-go at in-depth sponsored sessions on the show floor. Additionally, NWCDC offers valuable networking opportunities so you can make important contacts and share strategies with your peers.

You can also customize your learning experience with breakout sessions in six distinct program tracks: Claims Management, Medical Management, Program Management, Disability Management, Legal/Regulatory, and Technology. Plus, you’ll hear from Risk & Insurance’s Teddy Award winners for excellence in lowering workers’ comp risk.

Learn more about NWCDC and special savings for Risk & Insurance® subscribers here.

Courtney DuChene is a staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: CRACKS IN THE FOUNDATION

Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.

PART TWO: BETRAYAL

As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.

PART THREE: FALLING DOMINOES

Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.




Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]