The Impact of Fraud, Waste, and Abuse on Claim Settlement

The ongoing issue of high prescription allocations in MSAs continues to be a primary barrier in the settlement of workers’ compensation claims. Concurrently, the industry is on high-alert regarding fraud, waste, and abuse of prescription medications—specifically an epidemic in opioid use and abuse. According to PMSI’s Annual Drug Trends Report, 75% of total pharmacy spend in workers’ compensation for 2011 was related to pain medications. In addition to the high costs of these drugs which affect workers’ compensation carriers, fraud, waste, and abuse can also lead to clinical dangers for the patient, such as cumulative and adverse side effects. These side effects can prolong the life of the claim by impairing the injured worker’s functional status, and thereby reducing the likelihood of the claimant returning to work. As payers struggle to contain the costs of prescription drug allocations to achieve settlement, it becomes even more critical to resolve and prevent instances of fraud, waste, and abuse that can artificially inflate the allocation and create additional health risks to the injured worker.

A difficult challenge for the workers’ compensation industry is to ensure that pain medications are being utilized properly to prevent fraud, waste, and abuse of these medications due to the nature of their high cost. Early intervention in claims with high risk indicators can be highly effective in preventing health issues for the injured worker and position the claim for settlement. A comprehensive solution for fraud, waste, and abuse will include controls at each stage in the claim lifecycle to identify, intervene, and resolve issues. For optimal outcomes, it is necessary to consider the behavior of the prescriber(s) and pharmacies in addition to that of the injured worker. Overall, the most effective approach is one that looks to work collaboratively with these three communities of interest through education and awareness.

State and Federal Regulatory Programs- Beginning of a Claim

During the first stage of treatment, when a narcotic pain medication is evaluated for appropriateness, Risk Evaluation and Mitigation Strategies (REMS) are available. REMS, which are required by the FDA to be developed by drug manufacturers, are intended to educate the prescribing physician, dispensing pharmacist, and patient on the risks involved with the use of these medications and ensure they are utilized properly. For more information on REMS, please see our prior blog.

In addition to REMS, which is promulgated at the Federal level by the FDA, many states have also established Prescription Drug Monitoring Programs (PDMPs) to encourage safer prescribing and reduce drug abuse and diversion of narcotic medications/controlled substances. Although PDMPs differ from state to state, all PDMPs are designed with the same goal in mind—to assist in detecting and preventing fraud, abuse, and misuse of narcotic medications. PDMPs achieve this goal by collecting prescription information in a central database that can be easily accessed by the physician to assist with treatment decisions and reduce the incidence of “doctor shopping” for the purpose of misuse and/or diversion.

Some examples of PDMPs include Florida’s “E-FORCSE” (Electronic-Florida Online Reporting of Controlled Substances Evaluation) and Kentucky’s “KASPER” (Kentucky All Schedule Prescription Electronic Reporting program), which require physicians to report each controlled substance prescribed for patients within seven days. New York has just recently established their PDMP, called “I-Stop,” which is the first real time PDMP that requires the physician and dispensing pharmacist to review and verify patient drug information prior to writing or dispensing each prescription for a controlled substance.

PBM Clinical Programs- Midpoint of the Claim

As treatment progresses, a claimant could be categorized as having chronic pain. Besides meaning a lifetime of battling pain, if a history of extended utilization of narcotic medications is established, a likely long-term result is increased costs as well as a heightened opportunity for duplicate drug therapy and abuse.  According to the National Council on Compensation Insurance, “Narcotics total share of medication increases as claims age from 15% the first year to as much as 35% in the 5th year of service.”

If at this point in the claim it is categorized as a chronic issue, it is vitally important to proactively monitor the claim for possible misuse or abuse. Although REMS and PDMPs aim to reduce fraud, waste, and abuse through regulating the dispensing of these narcotic pain medications, it is still very common for claimants to reach a chronic level of dependence on narcotic pain medications which would greatly benefit from intervention.

One way to accomplish intervention is by taking advantage of clinical programs offered by Prescription Benefit Managers (PBMs) such as PMSI’s “Med Assess” and “Fraud, Waste, and Abuse” programs.  Clinical programs such as these not only aid in deterring narcotic fraud and abuse, but also assist with lowering medication costs over the life of the claim while improving the overall therapeutic outcome for the claimant. These outcomes are accomplished through controlled utilization strategies, targeted intervention programs, care management, and education.

Peer Outreach- End of the Claim

During the final stage of the claim when maximum medical improvement (MMI) has been reached and settlement is being considered, there is still opportunity to take advantage of clinical programs to reduce inflated prescription allocations in MSAs.  MSAs can be inflated due to inappropriate narcotic prescribing or abuse/misuse. Prior to settling the claim and finalizing an MSA, Peer Outreach with the treating physician can be conducted to discuss the most cost effective, safe, and effective treatment for the claimant.   

Narcotics are frequently utilized to treat pain in workers’ compensation injuries and while they are considered safe and effective when properly used, they also have a high potential for abuse and addiction if not properly monitored and controlled. Because this can lead to health risks for the claimant as well as increased medical expenses, everyone benefits when fraud, waste, and abuse are controlled.

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