The opioid crisis in the United States has reached epidemic proportions, with nearly 20,000 people overdosing in 2016. Many people have become addicted to these powerful drugs and have struggled to either find an alternative medication or to come off of opioids entirely. There are many factors that have gone into how this problem has reached these proportions, with a variety of influences playing their part including the pharmaceutical industry, physicians, medical associates, and drug companies. But what hasn’t been spoken about much is the impact that this crisis has had on workers compensation claims and the burden this places on employers funds. Employers are seeing their workers compensation claims rise and are looking to the data of these claims to see if there is a way to keep these costs lower.

In this article we’re going to examine how the opioid crisis got to where it is today, and the impact it is continuing to have one employer’s workers compensation premiums. It would be beneficial for employers examine the data of their workers compensation claims to find ways to keep these costs under control and prevent any excessive claims.

The Opioid Crisis

How we got here

Opioids are one of the most effective means to treat pain, and have always been an option for doctors to prescribe to their patients to keep their pain under control. However, beginning in the 1990s, there was a sharp increase in prescriptions for opioids and opioid combination drugs. This was in no small part due to the pharmaceutical companies and medical institutions who reassured physicians that opioids had a very small risk of addiction. Long prescribed to treat pain from cancer, opioids were now beginning to be prescribed to patients for non-cancer pain treatment. By 1999, 86% of patients were taking opioids for non-cancer pain treatment. This liberal prescription policy also created a black market for pills, and people to whom they were prescribed illegally started to sell them to others.

In the 2000s synthetic opioids such as fentanyl started to be illegally manufactured as well and lead to close to 20,000 deaths in 2016. The increase in deaths related to opioid abuse forced the U.S. Center for Disease Control and Prevention to issue guidelines for prescribing opioids for chronic pain. The guidelines explicitly stated that non-opioid drugs should be the first choice for physicians prescribing treatments for their patients’ chronic pain. 

The changes made to prescribing opioids has met resistance from the pharmaceutical industry, who have fought against the restrictions on prescribing the medication through lobbying and advocacy. Recently there has been more attention placed on drug manufacturers and physicians who prescribed this medication to be held accountable for the addiction crisis. 

Impact on Workers Compensation

This crisis has affected many people, and the cost to communities and families has been very high. But there is also another cost that is the result of the over-prescription of opioids, and that is to the employers of those who could become addicted to the medication prescribed to them through workers compensation. Employers are already dealing with the cost of drug addiction on their medical benefits, but it also can put a heavy impact on workers compensation premiums. Organizations have seen an increase in workers compensation claim amounts that prescribe opioids for work related injuries, which also means an increase in the cost of these premiums as well. Furthermore, employers are seeing an uptick in opioid related claims in their medical and pharmacy costs once workers compensation claims are ended. 

Workers compensation adjusters are usually able to see the potential for higher costs from work related injuries that could potentially lead to opioid abuse and try to combat it within the state’s workers' compensation statutes.  It is a good idea to periodically sit in on a review of open workers' compensation claims with the insurance adjuster, that way executives can be made aware of the status of all claims and what their potential is for resolution. Since the opioid crisis has had such an affect on insurance and workers compensation, Insurance adjusters have been trained to look for potential signs of overuse and abuse of opioids. However some insurance companies are not as adept at spotting these signs, which can mean that companies will continue to pay larger premiums. By examining workers' compensation data, and looking for signs of overuse, a company can get a better understanding of what the cost of their premiums should be.

Future prescription drug costs

In a recent report from the Workers Compensation Research Institute, they examined another way that opioid abuse claims can increase costs for employers. When a claim is close to being resolved, the insurance adjuster is required to notify the Centers for Medicare and Medicaid Services (CMS) for those claimants that are approaching retirement age or who might be eligible for social security disability. Future medical expenses from a workers compensation claim are to be expected, and this is done so that these expenses are paid by the workers compensation fund and not by Medicare. The CMS will determine how much money should be included in the claim to cover future medical expenses based on the injury, which is known as the Medicare Set Aside. This amount is included in the final claim and will be the agreed settlement.

The problem with this system is how future prescription drug costs are calculated. The Workers Compensation Research Institute examined 8,000 closed workers compensation cases that involved the Medicare set aside. They found that on average $103,393 was set aside for future prescription drugs and medical expenses. The study noted that opioids were the most commonly prescribed drug that was included in the Medicare set asides. The fact that this is still the case even as the crisis continues should raise some flags to employers. 

The study also found that for the set asides that included opioids, workers were approved for higher than average daily doses-- and most were approved for an average duration of 20.9 years after receiving their injury. Interestingly, the study also pointed out that in around 10% of these cases, the daily dose prescribed for opioids represented an elevated risk to the patient. This is indicative of how prevalent the over-prescription of opioids still is. When employers examine the medical data behind their open workers compensation claims, they should be looking for instances of possible over-prescription based upon the injury sustained to the worker.

Recommendations for Keeping Costs Low

It is never a good idea to prescribe a patient high levels of a very addictive drug, and this has been costing employers more money. There are ways for employers to fight back against these large claims that include decades of opioid prescriptions at unsafe dosages. Appeals based on Medicare set asides have a high chance of success when they are based on a thorough review and backed up with medical facts. But employers need to be aware that they should be tracking this type of data in their claims, and not assume that the insurance adjuster is doing it or even knows to look for it. Seeing where a company’s workers compensation claims stand is a good way to start this process. 

Reviews of open claims, especially those involving the prescription of opioids should be more closely examined to determine if the amounts that the CMS recommends are appropriate. To keep premiums from increasing, companies and their insurance adjusters need to better evaluate each claim. When a claim is nearing resolution and there is the possibility that a set aside will occur, take a closer look at the numbers for future prescription drugs and medicare expenses. Claimant attorneys like to get a large settlement amount for their client, but based on the review done by the Workers Compensation Research Institute, it does not help claimants to be put on large doses an addictive drug for years. 

Having access to workers compensation data can help organizations get a better handle on the costs associated with them-- especially as it relates to opioid prescriptions. When a company is more aware of what is behind the costs of their workers compensation claims, they can appeal to adjust the cost and possibly keep their premiums from increasing.