california orthopedic association california …• temp disability • perm disability • voc...
TRANSCRIPT
CWCI 2011. All rights reserved
California Orthopedic Association
Current Issues in the California Workers’ Compensation System
Alex Swedlow
EVP, Research
California Workers’ Compensation Institute
www.cwci.org
Exhibit 2
CWCI 2011. All rights reserved
• Established in 1964;
• Private, nonprofit organization of self-insured employers
and insurers representing over 90% of premium dollars;
• Dedicated to improving the California workers’
compensation system through four primary functions:
� Education
� Information
� Representation
� Research
CWCI: Background
Exhibit 3
CWCI 2011. All rights reserved
Agenda
• CWCI Research Primer
• Data, Benchmarks and Scorecards
• Current Industry Trends
• Examples of System Cost Drivers
- Back Injuries, Surgery and Surgical Hardware
- Schedule II Opioids
Exhibit 4
CWCI 2011. All rights reserved
Agenda
Industry Claim Information System (ICIS)
• Voluntary Data Submissions
• Collaborative Research Model
• Industry Trends and Benchmarks
Exhibit 5
CWCI 2011. All rights reserved
Industry Claim Information System (ICIS)
C. Payment Transactions• Temp Disability• Perm Disability• Voc Rehab• Litigation
D. Segment: Medical Services• Outpatient• Inpatient
A. Segment: Policy• Employer Characteristics
B. Segment: Claim• Employee Characteristics• Injury Characteristics
ICIS Database Segments
Exhibit 6
CWCI 2011. All rights reserved
•Scorecard Series
- Injury and Industry Outcomes
•Cost Drivers
- Injury Rates and Descriptors
- Litigation
- Return-to-Work
- Regional Differences- Medical Utilization and Cost
- Pharmacy
Measuring Trends and Benchmarks
Exhibit 7
CWCI 2011. All rights reserved
Trends and Benchmarks
Leading Injury Categories: Back Injuries
Exhibit 8
CWCI 2011. All rights reserved
Trends and Benchmarks
Spine Injuries: Causes of Injury
Exhibit 9
CWCI 2011. All rights reserved
Injury Trends and Benchmarks
Other System Dynamics
Exhibit 10
CWCI 2011. All rights reserved
27,847
33,16237,977
42,74145,872
50,017 49,19045,652
39,936 38,656
44,944
51,612
58,41861,664
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: WCIRB
Total Loss Development (Insured Employers)
Estimated Ultimate Total Loss Per Indemnity Claim- as of Sept 2010 -
+60%
Exhibit 11
CWCI 2011. All rights reserved
13,07015,728
18,95821,834
24,18927,223 27,580 26,108
24,453 25,346
29,584
34,511
39,47542,613
$0
$10,000
$20,000
$30,000
$40,000
$50,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: WCIRB
Medical Development (Insured Employers)
Estimated Ultimate Medical Per Indemnity Claim- as of Sept 2010 -
+74%
Exhibit 12
CWCI 2011. All rights reserved
$0
$4,000
$8,000
$12,000
12 M $5,433 $4,970 $4,439 $4,376 $4,879 $5,480 $6,038 $6,518
24 M $8,522 $8,229 $6,741 $6,939 $8,107 $8,734 $9,438
2002 2003 2004 2005 2006 2007 2008 2009
Sub-Category of Average Medical Benefits Paid
Medical Treatment, Indemnity Claims
+49%
+40%
Exhibit 13
CWCI 2011. All rights reserved
$0
$600
$1,200
$1,800
$2,400
12 M $412 $505 $639 $623 $871 $1,051 $1,290 $1,511
24 M $649 $809 $908 $971 $1,296 $1,572 $1,818
2002 2003 2004 2005 2006 2007 2008 2009
Sub-Category of Average Medical Benefits Paid
Medical Management, Indemnity Claims
+143%
+100%
Exhibit 14
CWCI 2011. All rights reserved
Medical Management
Utilization Review as a Percent of MCC @ 24M
8.9% 8.6%
18.8%
23.2%
31.6%34.2%
0%
10%
20%
30%
40%
2003 2004 2005 2006 2007 2008
Exhibit 15
CWCI 2011. All rights reserved
Managing Medical Management
Why is workers compensation medical so much harder to manage?
1. Rules, regs and institutional memory2. Benefit variation3. Lack of supply and demand side controls:
• Co-payments & deductibles• Contractual language• Dispute resolution
4. Liens
Exhibit 16
CWCI 2011. All rights reserved
Changes in Inpatient Utilization
Source: CWCI 2008
• Follow-up to 2001 study
• Utilization of Inpatient Services
• Analysis of Back Surgery
• Comparison to other health systems
- Group Health
- MediCare
- Medi-Cal
� Surgical Implants
Exhibit 17
CWCI 2011. All rights reserved
31,348 30,73629,247
27,542 26,552
0
10,000
20,000
30,000
40,000
2002 2003 2004 2005 2006
Inpatient AdmissionsCY 2002 - 2006
Source: CWCI 2008
-15%
Changes in Inpatient Utilization
Exhibit 18
CWCI 2011. All rights reserved
11,23710,640
9,9209,021
8,385
0
5,000
10,000
15,000
2002 2003 2004 2005 2006
Medical and Surgical Back AdmissionsCY 2002 - 2006
Source: CWCI 2008
-25%
Changes in Inpatient Utilization
Exhibit 19
CWCI 2011. All rights reserved
0
1
2
3
4
5
WC 3.3 3.3 2.5
All Other 3.9 3.5 2.6
LOS All Proc Surg Proc
WC vs. Non-WC Inpatient Surgical Back Profile
Source: CWCI 2008
Case-mix Adjusted Discharge Outcomes2002 - 2006
CWCI 2011. All rights reserved
Inpatient Hospital Fee Schedule pays 120% MediCare’s global FS (includes surgical implants)
Plus
Pass-through payment for surgical implants Documented paid cost plus 10%
Double Payment for Surgical Implants
• Studies suggests pass-through diminishes incentives to manage selection or cost of implants
• Formula under review for revision
CWCI 2011. All rights reserved
Cost Analysis of Surgical Implants: Preliminary Results
4,776
1341520 - Cervical Spinal Fusion w/o cc
359519 - Cervical Spinal Fusion w cc
1378498 - Spinal Fusion Except Cervical w/o cc
967497 - Spinal Fusion Except Cervical w cc
731496 - Combined Anterior/Posterior Fusion
2006
CasesBack DRGs Eligible for Pass-through
1 Kominsky & Gardner, CHSWC, 2001
• Special database with implants (2005-2007)
• Compare implant costs against 2001 Study1
• OSHPD discharge database
CWCI 2011. All rights reserved
$16,000
$63,890
$8,000 $8,821
0
10000
20000
30000
40000
50000
60000
70000
LOW HIGH2001 2007
DRG 496 - Combined Anterior/Posterior FusionRange of Surgical Implant Payments
Preliminary Results
Source: Kominsky & Gardner 2001
CWCI 2009
CWCI 2011. All rights reserved
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
LOW $8,821 $4,450 $1,431 $3,185 $2,643 $6,137
MEAN $25,478 $13,092 $16,416 $14,239 $10,870 $15,409
HIGH $63,890 $44,436 $55,716 $34,387 $42,266 $49,304
496 497 498 519 520 5 DRGs
Source: CWCI 2009
CWCI’s 45th Annual Meeting of Members
Range of Surgical Implant Payments
Preliminary Results
CWCI 2011. All rights reserved
$191
$1,782
$5,804
$0
$2,500
$5,000
$7,500
Low Mean High
Carpal Tunnel
Range of Outpatient
Surgery Facility Payments (2001)
Prior Example of Excess Cost VariationOutpatient Surgery Facility Payments
Source: CWCI 2001
CWCI 2011. All rights reserved
Average Facility PaymentPre-Fee Schedule (2001) & Fee Schedule (2005)
Source: CWCI 2005
$1,782$1,899
$983$1,120
$0
$500
$1,000
$1,500
$2,000
Carpal Tunnel All Procedures
Adj 2001 FS 2005
-41%-45%
Exhibit 26
CWCI 2011. All rights reserved
Changing Role of Rx in Workers’ Compensation
1. Growing use of pharmaceuticals
2002: 5% of medical benefits
2010: 13% of medical benefits (NCCI estimate)
2. Reforms in pricing and fee schedules
3. Growing influence of pain management practices
4. Legislative, administrative and payor responses
Areas of CWCI Rx Research
Exhibit 27
CWCI 2011. All rights reserved
1. Repackaged Drugs
2. Opioids & Schedule-II Rx
Areas of CWCI Rx Research
Exhibit 28
CWCI 2011. All rights reserved
Source: CWCI 2005
• Exempt from MediCal fee schedule
• Reimbursement level reverts to prior FS
�110% of AWP for brand
�140% of AWP for generics
• Repackagers set AWP
Repackaged Drugs (pre-reform)
CWCI 2011. All rights reserved
$255.56
$126.74
$25.64$25.90
$0
$50
$100
$150
$200
$250
$300
Ranitidine Naproxen
Pharmacy RepackagedSource: CWCI 2006
+887%
+394%
Pharmacy vs. Repackaged DrugsAverage Paid per 100 Units (2006)
Before…
Exhibit 30
CWCI 2011. All rights reserved
• DWC regulation implemented March 2007
• Eliminates the repackage “loop-hole”
• Sets price at pharmacy fee schedule
Repackaged Drugs Update
CWCI 2011. All rights reserved
$40.69
$45.43
$37.44
$28.65
$0
$10
$20
$30
$40
$50
Ranitidine Naproxen
Pharmacy Repackaged
Pharmacy vs. Repackaged DrugsAverage Paid per 100 Units (2008)
-30%
-18%
After…
Source: CWCI 2008
Exhibit 32
CWCI 2011. All rights reserved
0%
20%
40%
60%
Pcnt Scripts 57.6% 53.8% 39.5% 18.9% 15.6% 12.9% 11.3% 9.6% 8.1% 6.5% 6.1% 3.7%
Pcnt Pymts 57.5% 57.5% 43.3% 13.1% 11.5% 8.6% 7.9% 5.9% 5.0% 3.9% 3.9% 2.5%
2005 20062007-
Q1
2007-
Q2
2007-
Q3
2007-
Q4
2008-
Q1
2008-
Q2
2008-
Q3
2008-
Q4
2009-
Q1
2009-
Q2
Pharmaceutical Utilization & Cost: Repackaged Drugs1
1 Calculations are on a calendar year basis
-93%
-95%
Exhibit 33
CWCI 2011. All rights reserved
0%
5%
10%
15%
20%
25%
Pcnt Scripts 1.4% 1.8% 2.2% 3.1% 3.4% 4.1% 5.0% 5.4% 5.4% 5.7% 5.7% 7.2%
Pcnt Pymts 3.8% 4.3% 5.2% 10.1 12.1 13.7 16.8 18.1 18.5 19.3 19.3 23.6
2005 20062007-
Q1
2007-
Q2
2007-
Q3
2007-
Q4
2008-
Q1
2008-
Q2
2008-
Q3
2008-
Q4
2009-
Q1
2009-
Q2
Pharmaceutical Utilization & Cost
Schedule-II Opioid Drugs1
1 Calculations are on a calendar year basis
+414%
+521%
CWCI 2011. All rights reserved0.8%1.6%Other Schedule II
2.8%1.7%Oxymorphone
1.3%3.7%Hydromorphone
0.6%6.3%Methadone
32.2%14.6%Fentanyl
16.9%18.6%Morphine
45.4%53.1%Oxycodone
% Schedule-II Prescription $
% Schedule-II Prescriptions
Schedule II Drug Category
CWCI Research Spotlight Report (Sept 2009)
Schedule II Prescription & Payments in CA Workers’ Comp
Top Schedule-II Drugs by Active Ingredient
Exhibit 35
CWCI 2011. All rights reserved
Opiod Prescriptions on Low Back Claims
0%
25%
50%
75%
100%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Scripts per Claim
Pc
nt
of
All C
laim
s w
ith
Na
rco
tic
s
Low back injuries w/ opiods typically receive 5.2 prescriptions per injury
Background on Pain Management
Exhibit 36
CWCI 2011. All rights reserved
ACOEM Insights on Opioids
- Opioids in the management of chronic pain do not consistently and reliably relieve pain.
- It also overall demonstrates a decrease in quality of life and functional status
- The use of opioids during the sub-acute and chronic phases of an injury, especially in the absence of an objectively identifiable pain generator, cannot be recommended.
Genovese, Harris, Korevaar 2007
Exhibit 37
CWCI 2011. All rights reserved
Report to the Industry
What is the association between the use of opioids on low back pain on:
• Average Benefit Costs- Medical- Indemnity
• Return To Work
Rx & Pain Management
Exhibit 38
CWCI 2011. All rights reserved
Pain Mgt and the Use of Opioids
Study Population
• 166,336 California injured workers
• Medical back conditions without spinal cord involvement
• Dates of Injury: 2002 through 2005
• A total of 854,244 opioid prescriptions were dispensed
• Controls (morphine equivalents) for different types of opioids
• Case-mix adjusted outcomes
Source: CWCI 2008
Exhibit 39
CWCI 2011. All rights reserved
Pain Mgt and the Use of Opioids
Average Benefit Cost Outcomes
$0
$5,000
$10,000
$15,000
$20,000
$25,000
No MEs $6,733 $3,207 $3,526
Level 1 $6,499 $2,938 $3,561
Level 2 $10,550 $4,411 $6,139
Level 3 $14,950 $6,356 $8,594
Level 4 $20,389 $9,488 $10,901
Total Benefits Medical Indemnity
+203%
+196% +209%
Source: CWCI 2008
Exhibit 40
CWCI 2011. All rights reserved
Pain Mgt and the Use of Opioids
Return to Work: Paid Temp Disability Days
0
20
40
60
80
100
120
140
No MEs 21.3 62.9
Level 1 21.3 66.9
Level 2 38.8 84.2
Level 3 60.6 102.3
Level 4 99 138
All Claims Indemnity Claims
365%
119%
Source: CWCI 2008
Exhibit 41
CWCI 2011. All rights reserved
• Opioid use back injury frequently exceeded recommended guidelines
• High levels of opioids were associated with detrimental effects on injured workers with medical back conditions.
• The preponderance of evidence suggests that prolonged administration of opioids impedes, rather than facilitates, injured workers’ recovery from disabling back conditions.
Pain Mgt and the Use of Opioids
Summary of Results
Exhibit 42
CWCI 2011. All rights reserved
Analysis of Prescribing Patterns Schedule II Opioids
PBM and ICIS Data: • 16,890 Claims• 9,174 Prescribing physician DEA code• 233,276 Prescriptions• Script, dosage and days • Pharmaceutical characteristics • DOS, billed and paid amount• ER and EE characteristics
CWCI March 2011
Pain Mgt and the Use of Opioids
Analysis of: 1. Injury Characteristics2. Physician Prescribing Patterns3. Injured Worker Characteristics
Exhibit 43
CWCI 2011. All rights reserved
1.1%1.4%1.5%Other Diagnoses of Musculoskeletal Sys
1.5%1.7%1.2%Other Mental Disturb
1.6%2.7%6.3%Wound, FX of Shoulder, Arm, Knee or Lower Leg
2.8%3.2%6.8%Sprain of Shoulder, Arm, Knee or Lower Leg
2.7%3.6%6.0%Ruptured Tendon, Tendonitis, Myositis & Bursitis
6.8%5.9%5.5%Other Injuries, Poisonings & Toxic Effects
5.4%6.1%9.3%Degen, Infect & Metabol Joint Dis
6.5%6.8%5.0%Cranial & Peripheral Nerve Dis
16.1%15.1%11.3%Spine Disorders w/ Spinal Cord or Root Invlvmnt
50.2%47.1%35.7%Medical Back w/o Spinal Cord Invlvmnt
Pcnt of S-II Opioid Pymnts
Pcnt of S-II Opioid Scrips
Pcnt of S-II Opioid ClaimsDiagnostic Category
CWCI March 2011
Analysis of Prescribing Patterns Schedule II Opioids
Top Injury Categories w/ Schedule II Opioids
Exhibit 44
CWCI 2011. All rights reserved
1.1%1.4%1.5%Other Diagnoses of Musculoskeletal Sys
1.5%1.7%1.2%Other Mental Disturb
1.6%2.7%6.3%Wound, FX of Shoulder, Arm, Knee or Lower Leg
2.8%3.2%6.8%Sprain of Shoulder, Arm, Knee or Lower Leg
2.7%3.6%6.0%Ruptured Tendon, Tendonitis, Myositis & Bursitis
6.8%5.9%5.5%Other Injuries, Poisonings & Toxic Effects
5.4%6.1%9.3%Degen, Infect & Metabol Joint Dis
6.5%6.8%5.0%Cranial & Peripheral Nerve Dis
16.1%15.1%11.3%Spine Disorders w/ Spinal Cord or Root Invlvmnt
50.2%47.1%35.7%Medical Back w/o Spinal Cord Invlvmnt
Pcnt of S-II Opioid Pymnts
Pcnt of S-II Opioid Scrips
Pcnt of S-II Opioid ClaimsDiagnostic Category
CWCI March 2011
Analysis of Prescribing Patterns Schedule II Opioids
Top Injury Categories w/ Schedule II Opioids
Exhibit 45
CWCI 2011. All rights reserved
1.1%1.4%1.5%Other Diagnoses of Musculoskeletal Sys
1.5%1.7%1.2%Other Mental Disturb
1.6%2.7%6.3%
Wound, FX of Shoulder, Arm, Knee or Lower
Leg
2.8%3.2%6.8%Sprain of Shoulder, Arm, Knee or Lower Leg
2.7%3.6%6.0%
Ruptured Tendon, Tendonitis, Myositis &
Bursitis
6.8%5.9%5.5%Other Injuries, Poisonings & Toxic Effects
5.4%6.1%9.3%Degen, Infect & Metabol Joint Dis
6.5%6.8%5.0%Cranial & Peripheral Nerve Dis
16.1%15.1%11.3%
Spine Disorders w/ Spinal Cord or Root
Invlvmnt
50.2%47.1%35.7%Medical Back w/o Spinal Cord Invlvmnt
Pcnt of S-II
Opioid Pymnts
Pcnt of S-II
Opioid Scrips
Pcnt of S-II
Opioid ClaimsDiagnostic Category
CWCI March 2011
•51% of Claims
•60% of S-II Prescriptions
•62% of Payments
Analysis of Prescribing Patterns Schedule II Opioids
Top Injury Categories w/ Schedule II Opioids
Exhibit 46
CWCI 2011. All rights reserved
Cumulative Percentage of Schedule II Prescriptions(Top 10% of S-II Prescribing Physicians)
79.2%77.3%75.2%72.7%69.7%66.0%
61.3%54.9%
46.2%
33.1%
0%
20%
40%
60%
80%
100%
Top1%
Top2%
Top3%
Top4%
Top5%
Top6%
Top7%
Top8%
Top9%
Top10%
Analysis of Prescribing Patterns Schedule II Opioids
CWCI March 2011
Exhibit 47
CWCI 2011. All rights reserved
Cumulative Percentage of Schedule II Payments (Top 10% of S-II Prescribing Physicians)
88.2%86.8%85.1%83.1%80.1%
76.3%70.8%
64.7%
55.8%
42.4%
0%
20%
40%
60%
80%
100%
Top1%
Top2%
Top3%
Top4%
Top5%
Top6%
Top7%
Top8%
Top9%
Top10%
CWCI March 2011
Analysis of Prescribing Patterns Schedule II Opioids
Exhibit 48
CWCI 2011. All rights reserved
7.46.6
7.88.4
11.0
8.69.1
10.911.0
15.5
0
5
10
15
20
Top1%
Top2%
Top3%
Top4%
Top5%
Top6%
Top7%
Top8%
Top9%
Top10%
Average S-II Opioid Scripts per Claim per MD(Top 10 % Prescribers)
CWCI March 2011
Analysis of Prescribing Patterns Schedule II Opioids
Median: 1.8
Exhibit 49
CWCI 2011. All rights reserved
3.4
3.0
2.5
1.91.6
1.3 1.2 1.1 1.0
2.2
1
2
3
4
5
1st-10th
11th-20th
21st-30th
31st-40th
41st-50th
51st-60th
61st-70th
71st-80th
81st-90th
91st-100th
Average S-II Opioid Prescribing Physicians per Claim (Injured Worker)
CWCI March 2011
Analysis of Prescribing Patterns Schedule II Opioids
Median: 1.5
Exhibit 50
CWCI 2011. All rights reserved
60.3
31.5
18.712.7
7.3 3.9 2.3 1.8 1.2 1.20
20
40
60
80
1st-10th
11th-20th
21st-30th
31st-40th
41st-50th
51st-60th
61st-70th
71st-80th
81st-90th
91st-100th
Average S-II Opioid Scripts per Claim(Injured Worker)
CWCI March 2011
Analysis of Prescribing Patterns Schedule II Opioids
Median: 5.9
Exhibit 51
CWCI 2011. All rights reserved
• Rapid growth in S-II opioids use ;
• The top 3 percent S-II prescribing MDs account for: • More than half the S-II prescriptions, • 2 out of 3 morphine equivalents and payments;
• Top 10 percent of injured workers obtain scripts from 3.4 different physicians.
• Over half of S-II prescriptions are for minor back injuries that ACOEM describes as “typically not useful in the sub-acute and chronic phases.”
• Growing interest in state-wide and federal intervention.
Summary
Analysis of Prescribing Patterns Schedule II Opioids