Mid-Summer Summary and a Quick Look Forward

It's mid-summer, and many of our readers are off on well-deserved vacations. For those who are still in the office (and are as fascinated as we are by all things ‘workers’ comp'), we are taking this opportunity to offer some updates to one of the major subjects we've been following and to provide a heads up about what we'll be highlighting later this year.

 

Updates on Opioids

For more than two years, we've been profiling the challenges posed to the nation's workers and employers by opioids. We've tried to explain:

 

We've looked into what employers can to do (and their struggle with those activities) to reduce the likelihood that their injured workers will suffer the additional pain of a subsequent opioid addiction. And we've reported how some of America's medical professionals have contributed to (and profited dramatically by) the problem by prescribing so many of the drugs in inappropriate quantities and dosages.

 

Clearly, opioids as pain relief for workplace injuries have wreaked havoc across the country for at least two decades, and America's employers and employees have borne the economic and emotional brunt of that disaster.

 

Seeing a Turnaround?

However, increased attention to the issue has also increased responses to it, and all parties involved - employers, employees, insurers, healthcare providers, and government agencies - are now working in conjunction with each other to reduce the problem.

 

Consequently, we're now happy to report three good news stories about how those added attentions and intentions have had a positive impact on the opioid concern:

 

1) The Dollar Amount of Spending on Opioids is Falling

Recently released data reveals that in 2018, all 27 respondents to the 16th annual "Survey of Prescription Drug Management in Workers’ Comp" reduced their spending on opioids for injured workers by an aggregate of 23.2 percent in 2018. The drop signals the third year in a row that opioid spending was down, by 16% in 2017 and 13% in 2016.

 

Those reductions are the result of several changes in how medications are managed in the workers’ comp system. Insurers are now more careful about the number and dosage of opioids that they're will to cover, and ethical healthcare providers are reducing the numbers of opioid prescriptions that they write. And injured persons are also assuming more responsibility for their healthcare, by becoming more aware of the dosage and duration of prescriptions and moving off the drugs earlier in their recovery period.

 

In many cases, the shift in opioid usage reflects the growing reality that workers who remain on the drugs beyond medically accepted terms take longer to recover, are more likely to not return to work, and more likely to not regain their previous level of function even after they've recovered from the injury itself.

 

2) Adding Acupuncture to the List?

On a related note, in mid-July, the CMS (Centers for Medicare & Medicaid Services) for the first time suggested a willingness toauthorize the use of acupuncture treatments for their Medicare patients who suffer from chronic low back pain (cLBP). It's not available for everyone just yet, however; the agency issued a 'proposed' decision, indicating that they'd make a final determination on the question based on the results received by study participants who are enrolled patients in CMS-approved research or clinical trials sponsored by the NIH (National Institutes of Health).

 

Earlier in the year, CMS launched a  National Coverage Analysis (NCA) of scientific evidence that supports or negates the use of acupuncture as a pain-relieving alternative to medical interventions such as opioids. While there's no posted information as to why cLBP is the current focus, again, statistics may reveal why the CMS chose that particular ailment. A 2016 National Health Survey showed that at least 50 million American adults suffered from some form of cLBP and that 19.6 million of those experienced "high impact chronic pain." Both levels of pain are associated with increased anxiety, depression, and, in many cases, opioid dependence. Using the non-medical intervention of acupuncture instead of opioids would be a game-changer for many people if it curtailed their pain and improved their quality of life without the need for opioids.

 

The NCA is also part of a Strategic Plan developed by the National Institute of Drug Abuse (NIDA) to reduce the impact of opioids on Americans. The strategy includes four approaches to improved pain management that might assist with the alleviation of pain but not exacerbate the health situation with an unnecessary opioid addiction. The approaches include exploring for more non-opioid medical interventions; assessing the efficacy of non-pharmacological pain treatments such as acupuncture and biofeedback; finding adjunctive supports for cases where opioids remain the best pain controlling mechanism and developing strategies to improve opioid management practices so that opioid use disorders don't develop.

 

3) The National Safety Council (NSC) Agrees with CMS

In a show of national unity, the NSC agreed publicly with the CMS and asserted its support of the decision to consider alternative pain treatment methods like acupuncture instead of opioids. The NSC put the opioid crisis in context by noting that the odds of dying prematurely because of a fatal opioid overdose have surpassed the odds of being killed in a car accident for the first time ever. The agency went on to encourage all employers and their benefits providers to consider accepting alternative pain treatments as a way to not just reduce the threat of opioid dependency but to avoid it altogether.

 

A Brighter Future

Both the reduction in opioid spending and the possibility of acupuncture coverage for controlling pain are significant strides toward a definitive solution to the opioid crisis. We will continue to monitor how the country is managing this scourge and keep our readers informed about how they can be part of that solution, too.

 

 

So, What IS an MSA?

CompEx MSA also intends to explore its roots and will be providing an overview of the need for and development of Medicare Set-Aside accounts. Protections for worker safety and healthcare management have evolved over a long period that also saw the institution of mandatory work hours, minimum wages, and safe working condition standards. Through it all, employers have had to walk a fine line between profitability and maintaining attention to emerging government and industry regulations. The MSA is one tool they can use to make that process easier.

 

At CompEx MSA, we believe we can assist our clients better if we help them to better understand how the MSA process works and how it works within America's industries and communities. We will be launching that series next month.

Medical Pricing Impacts Premiums, MSA Values

Workers’ Compensation Insurance plays an integral part in America's economy by allowing employers, either privately or through their workers’ compensation insurers, to cover the medical costs stemming from on-the-job injuries. As a corporate expense, the funds used to pay those premiums and fees are taken off the top of corporate revenues, so keeping them as low as possible is essential to ensure that the company remains economically viable.

 

Additionally, the value of those fees is a critical component of Medicare Set Aside accounts (MSAs), which are used to cover injury-related expenses after the injured worker has left the job. Employers who are responsible for generating and funding those MSAs should be fully aware of the costs for professional medical services in their community to ensure the value of the MSA covers the actual future costs of needed medical services.

 

Those Costs, They are a-Changing …

A recently released reportby the Workers’ Compensation Research Institute(WCRI), however, reveals that how much a company pays for professional medical services varies greatly across the country, with some states paying almost 160% more than others for comparable medical services. Those higher fees are passed on to the workers’ compensation insurer who, in turn, passes them on to the employer. And those higher fees also jack up the overall cost to the employer/insurer when the injured worker requires the establishment of an MSA to cover future costs flowing from the on-the-job injury.

 

Understanding the rates in your community and how those are calculated may help you make better decisions for your workers and your organization if or when you have an injured worker who is or becomes eligible for Medicare benefits.

 

The 2019 WCRI Report

The newly released report notes and compares the actual fees paid to medical services providers for services delivered to injured workers across 36 states. It is the 11th such report and focuses on data gathered in 2017 and 2018 (although it also tracks trends evolving since 2008). Measuring the actual prices for the most commonly used services accessed by injured workers, the report gives policymakers, insurers, and corporations insights into how and why medical costs fluctuate year after year.

 

A notable analysis in this year's report is the comparison of prices in states that have a legislated fee schedule for medical pricesversus states that have no such schedule. Perhaps not surprisingly, entities in states without an established fee schedule also usually paid higher prices for services than those in states where a fee schedule prescribes the price. Therefore, employers in those non-scheduled fee states paid more for medical services for their injured workers than those employers in states where there were legally prescribed caps on those prices.

 

Finally, the report also shows trends regarding where prices have risen and fallen over the past 11 years, providing some insight into the possible trajectory of health care prices for those services in the future.

 

Determining Medical Services Prices

In states with fee schedules, the workers’ compensation prices for medical services are either at the statutory fee rate, or they are negotiated between the insurer and the provider using the schedule as a guide. In states without a fee schedule, the costs for services provided by an out-of-network provider are usually what that provider charges or an averaged calculation of the 'usual and customary' value charged within that community. For in-network providers, the price is negotiated between the provider and the insurer. Consequently, both fee schedules and network contracts are the main influences on setting the prices for medical services provided to injured workers.

 

How Prices Compare Across the Country

Although the report indexes data from just 36 states, that data also represents 88% of the workers’ compensation benefits paid out across the entire nation. To accurately compare state to state, the researchers established the median value and identified it as "100%," then calculated each state's derivation above or below that median:

 

The 183-point difference between Florida and Wisconsin indicates a significant disparity in the prices paid for comparable medical services to injured workers in those two states.  Ergo, employers in Wisconsin paid significantly more in health care costs for their injured workers and were compelled to provide more resources up front for MSAs when those workers became eligible for or began receiving Medicare benefits.

 

How Changing Prices Impact Employers, Too

Another relevant factor affecting overall medical care pricing is its trend for growth or contraction over time. Only 31 of the states had data regarding the fluctuations in prices over the decade spanning 2008 to 2018, and that information is also interesting:

 

Virginia Provides a New Perspective

An interesting case study developing now is Virginia, which introduced a workers’ compensation fee schedule in January 2018. The state used only statistically reliable data regarding the average/historical costs of services for workers’ compensation injuries when establishing its fee schedule prices and consequently, the prices paid for those professional services dropped 14% in 2018 from comparable services provided in 2017.

 

In terms of actual services rendered, the new fee schedule also dropped the prices paid for specific services: the price for neurological/neuromuscular testing, for example, dropped by 7% while the price for minor radiology dropped by 24%. While, overall, Virginia remained in the higher-priced group of states, its price differential over the median dropped significantly - from 43% to 21% - after the introduction of the price regulation.

 

What the Numbers Might Mean

Depending on the state(s) in which they do business, employers should carefully note the medical services pricing numbers that are relevant to those communities so they can accurately estimate their workers’ compensation and MSA values. If trends hold true, then it's likely that medical care prices for injured workers will continue to rise over the next decade, possibly even in states with fixed fee schedules. As a result, forecasting an accurate estimate of MSA funding levels at the time of case settlement will be even more critical for both employers and insurers who must calculate the potential costs of future medical pricing for injured workers who become Medicare-eligible.