Opioid crisis: Kentucky’s reforms, Illinois’ problems and overprescription in workers’ comp
October 16, 2017

Opioid crisis: Kentucky’s reforms, Illinois’ problems and overprescription in workers’ comp

As opioid abuse ravages Illinois, lawmakers must take action to root out overprescription in the state’s workers’ compensation system.

Across the U.S., the opioid crisis has increasingly captured headlines, as communities struggle to find solutions to the growing problem of drug abuse and addiction. Illinois Attorney General Lisa Madigan cited the opioid abuse crisis as she joined a coalition of 39 state attorneys general on Oct. 2 to demand that Congress change Medicaid to make residential addiction treatment more accessible and affordable.

“The number of deaths and overdoses linked to opioid drug use has skyrocketed in Illinois and across the country,” Madigan said in a press release.

Among the state attorneys general in the coalition is Kentucky Attorney General Andy Beshear, who said in a press release, “Last year more than 1,400 Kentuckians died as a result of a drug overdose. The Road to Recovery Act will help those struggling with addiction gain access to treatment, potentially saving their lives.”

But while both states have experienced the horrors of opioid abuse, Kentucky has taken a path toward reform with effects in one area the Illinois General Assembly has not tackled effectively: the workers’ compensation system. One new study shows those efforts have paid off. And another shows Illinois still has a gaping loophole that could be fueling overprescription of opioids.

Opioid prescriptions fell for Kentucky workers’ compensation patients after 2012 reform

As Beshear indicated, Kentucky faces a dire drug abuse problem, and a major component of this is the state’s opioid abuse crisis. Kentucky lawmakers started tackling prescription drug abuse years ago, and passed reforms aimed at this problem in 2012 through House Bill 1. HB 1 regulates pain clinics and requires doctors and pharmacists to check a prescription database before prescribing medication to make sure a patient has not recently been prescribed narcotics. The reform bill also led to regulations that limit doctors’ dispensing of certain controlled substances to a 48-hour supply.

While the state continues to battle prescription opioid drug abuse and the heroin crisis it fuels, Kentucky’s reforms appear to have had an impact on injured workers receiving treatment under workers’ compensation, according to a recent study from the Workers Compensation Research Institute, or WCRI. The study shows that after Kentucky’s 2012 reforms, there was a significant drop in the number of workers’ compensation patients receiving opioid prescriptions, as well as in the amount of opioids prescribed to patients.

The percentage of injured workers with pain medications who received opioid prescriptions fell to 44 percent in 2013 after the implementation of the reforms, from 54 percent in 2011, pre-reform. These numbers changed little over the same time in neighboring states without similar reforms. In Illinois, for example, 45 percent of workers’ compensation patients with pain medications received a prescription for an opioid in 2011 and in 2013.

The Kentucky reforms had an especially significant impact on workers who received opioid prescriptions for nonsurgery-related medical problems such as back sprains and strains, according to WCRI. Opioid prescriptions for nonsurgical pain decreased to 35 percent of injured workers with pain medication, compared with 48 percent prior to the reforms. Physicians prescribed more nonopioid pain medication such as ibuprofen in place of some of the opioids they previously had prescribed. The number of opioid prescriptions for surgical pain did not change significantly from the pre-reform period to 2013, post-reform.

WCRI researchers also found that among Kentucky workers who received opioids, the average amount of opioid (measured in “morphine equivalent amounts”) per claim went down, too – by 15 percent.

The study’s authors noted the “findings raise questions about whether physicians had been prescribing pain medications that pose higher risks, like opioids, instead of non-opioid analgesics to a small but sizeable fraction of some groups of Kentucky workers – such as those without major surgery, workers with back sprains and strains … and workers of ages 25 to 39 years – prior to the implementation of HB 1.”

While HB 1’s reforms centered around prescribing and dispensing potentially addictive controlled substances such as the opioids oxycodone (of which OxyContin is a well-known brand) and hydrocodone (which is included in the drug Vicodin), Kentucky, along with many states, has also reformed aspects of its workers’ compensation system to rein in the costs associated with physician dispensing of medication.

According to WCRI, Kentucky not only limits physician dispensing of certain narcotics, but it also ties reimbursement for those who dispense drugs to workers’ compensation patients to the average wholesale price, or AWP, of the drugs as they originate from the manufacturer. Dispensing fees of $5 can only be paid to licensed pharmacists in Kentucky, not to physicians.

Illinois workers’ compensation reforms took aim at markups of repackaged drugs

Like Kentucky, Illinois has an opioid abuse problem. Data from the Illinois Department of Public Health, or DPH, show 2,278 drug-related overdose deaths occurred in Illinois in 2016, up 44 percent from 2013. Of those drug overdose deaths, 80 percent were opioid-related, according to DPH data. Illinois has taken some steps to address this crisis, but its prescription monitoring requirements are not as stringent as Kentucky’s.

And unfortunately, one aspect of Illinois’ workers’ compensation system increases the risk that an injured worker will receive an unnecessary prescription for a potentially dangerous opioid painkiller. Rather than requiring injured workers to fill their prescriptions at a pharmacy, Illinois’ workers’ compensation system allows physicians to dispense drugs directly to patients – a practice that has been shown to increase workers’ compensation costs, workers’ time off the job and the amount of opioids prescribed to injured workers.

In the past, the ability to sell so-called “repackaged” drugs directly to patients at a significant markup gave some physicians in the workers’ compensation system an incentive to write more prescriptions. According to WCRI, repackaging companies buy large amounts of medications and then repackage them into single-prescription quantities. The repackager obtains a new National Drug Code number for the drug and determines an AWP for it, which is most often higher than the AWP for the drug as it originates from the manufacturer.

When dispensing repackaged drugs to workers’ compensation patients, doctors have sometimes charged markups of 60-300 percent, according to a 2014 study by Johns Hopkins researchers published in the Journal of Occupational and Environmental Medicine, or JOEM. The study examined workers’ compensation claims opened and closed between 2007 and 2012.

The JOEM study showed that physician dispensing in Illinois’ workers’ compensation system resulted in doctors writing the number of opioid prescriptions they write when a pharmacy dispenses the medication. This study showed that costs increased dramatically in cases in which physicians dispensed medication rather than having patients fill prescriptions at a pharmacy.

In 2011, Illinois lawmakers enacted workers’ compensation reforms to try to rein in costs, including those due to physician dispensing of medication. One reform linked physician reimbursement for dispensing to the drug’s AWP, which for repackaged medication equals the AWP of “the underlying drug product, as identified by its National Drug Code from the original labeler,” plus a $4.18 dispensing fee.

A July 2017 WCRI study shows these reforms did reduce the ability of Illinois doctors to dispense repackaged drugs at a big markup, and the number of workers’ compensation prescriptions filled via physician dispensing declined. But loopholes remained, and post-reform, the percentage of workers’ compensation prescription costs attributed to physician-dispensed drugs actually rose in Illinois.

Those loopholes continue to drive up costs while threatening worker safety.

New-strength drugs loophole

In July, WCRI released a study on physician dispensing costs in 26 states that enacted reforms in this area. The study reveals that physician dispensing accounted for 44 percent of prescriptions in Illinois workers’ compensation cases in 2014 (post-reform), down from of prescriptions in 2011 (pre-reform). However, the study found that the percentage of total prescription payments attributable to physician-dispensed drugs in Illinois was in 2014, up from in 2011.

Thus, in Illinois, while the frequency of physician dispensing in the workers’ compensation system declined after the enactment of price-based reforms, the percentage of workers’ compensation prescription costs attributable to physician-dispensed drugs actually increased .

The study’s authors concluded that the high percentage of prescription prices in Illinois, as well as California and Florida, attributable to physician dispensing was due to “frequent physician dispensing of higher-priced new drug products.”

Several of the “new” drug products physicians had begun dispensing were actually existing drugs formulated by manufacturers with different strengths – rather than repackaged – and the prices were not restricted by workers’ compensation fee schedules. The new-strength drugs included 7.5 milligram cyclobenzaprine (a muscle relaxant), 150 milligram tramadol extended release (an opioid painkiller), and 2.5-325 milligram hydrocodone-acetaminophen (an opioid painkiller of which Vicodin is a well-known brand).

These new-strength medications fetched much higher prices than they did in their existing strengths, according to WCRI. For example, in Illinois, the new-strength hydrocodone-acetaminophen came in at an average of $3.19 per pill, while existing strengths of the drug – which contain more hydrocodone than the new formulation – cost an average of $0.72 per pill. WCRI researchers found that by 2014, more than one-third of physician-dispensed hydrocodone-acetaminophen prescriptions for Illinois workers’ compensation patients were for the new, more expensive strength.

The WCRI study authors noted these new-strength drugs were seen in physician-dispensed prescriptions, and not in prescriptions filled in pharmacies. That suggests motives other than patient wellbeing were likely at play in prescribing the new, more expensive drugs.

The study noted that, due to Florida’s 2011 reform banning physicians from dispensing Schedule II and III opioids directly to patients, very few prescriptions for hydrocodone-acetaminophen were dispensed to workers’ compensation patients by Florida doctors. Kentucky’s restrictions on physicians dispensing certain Schedule II and Schedule III controlled substances (such as hydrocodone) had similar effects.

Illinois bill to reform physician dispensing never made it to full House vote

In February, state Rep. Barbara Wheeler, R-Crystal Lake, filed a bill to close the loophole in Illinois’ workers’ compensation system that provides incentives for some doctors to overprescribe certain medications. House Bill 2892 would deny reimbursement under the Illinois Workers’ Compensation Act for prescriptions “filled and dispensed outside of a licensed pharmacy.” The bill makes a narrow exception for direct dispensing of medication in cases where a licensed pharmacy is more than 5 miles from the doctor’s office. In those cases, a doctor will be reimbursed only for a supply of medication that lasts for the greater of “72 hours from the date of the injury or 24 hours from the date of first referral to the medical service provider.”

Reasonable reforms such as Wheeler’s ensure injured workers in need of pain medication can still have their prescriptions filled at a licensed pharmacy. Her bill simply protects injured workers by limiting doctors’ ability to sell those drugs directly within the workers’ compensation system.

Notwithstanding Illinois’ mounting opioid crisis, high workers’ compensation costs and the risk that physician dispensing can pose to injured workers – as well as the extra costs this practice imposes on taxpayers, who pay for workers’ compensation for government workers – this commonsense reform never made it to a vote on the House floor.

Illinois officials should be consistent: If opioid abuse is a serious problem that threatens Illinoisans’ well-being, lawmakers should root it out of the workers’ compensation system. Passing HB 2892 would be a good start.

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