Cumulative Trauma Injuries & The Rx Formulary A California …ccwcworkcomp.org/ccwc/assets/File/2017...

CWCI – July 2017

CWCI 2017. All Rights Reserved 1

CWCI 2017. All Rights reserved.CWCI 2017. All Rights reserved.CWCI 2017. All Rights reserved.CWCI 2017. All Rights reserved.

Cumulative Trauma Injuries & The Rx Formulary

A California Workers’ CompensationSystem Update

Alex Swedlow, President

Joe Paduda, Principal

C CVV I


Good news on reform outcomes:

Current Events on Medical Delivery

• Frequency, expenses and medical are down

• New fee schedules (RBRVS) on track

• Fewer spine surgeries

• Opioids are trending down

• Rx Formulary Jan 2018

• Fewer liens

• $1.3B in savings (WCIRB)

CWCI – July 2017


CWCI 2017. All Rights reserved.CWCI 2017. All Rights reserved.CWCI 2017. All Rights reserved.

HighestRate*

California within the National Landscape

Source: Oregon Dept. of Business & Consumer Services Study 2016

However…

Highest Perm Dis Frequency

HighestExpenses

* Using CA weights


Source: NCCI Annual Statistical Bulletin, 2016, Exhibit 11

Medical Cost per Indemnity Claim

National Comparison on Medical CostsIndemnity Claims

64% higher than median state

CWCI – July 2017



Exhibit 5

Source; NCCI 2016

Countrywide Ratios of Loss Adjustment Expense Costs to Losses

National Comparison on LAE Costs

83% higher than median state


Breakdown of California “Benefit Delivery Expense”

MCC41%

Defense Attorney

31%

Medical-Legal11%

Other17%

WCRI CompScope for CA Edition 15 (2015)

Exhibit 6

CWCI – July 2017



1% 2% 3% 4% 5% 6% 7% 8% 9% 10%11-

100%

Scripts 33% 46% 55% 61% 66% 70% 73% 75% 77% 79% 100%

Payments 42% 56% 65% 71% 76% 80% 83% 85% 87% 88% 100%

MMEs 41% 54% 62% 69% 74% 78% 81% 83% 85% 87% 100%

0%

25%

50%

75%

100%

Cumulative Percentile of Physicians

Source: CWCI 2012

Exhibit 7

The Skew: Opioid Prescribers


Exhibit 8

Percent of UR & IMR Decisions for Top Providers

The Skew: UR & IMR Physicians: 2015 & 2016 Decisions

Top10

1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

UR (27k) 9% 42% 53% 59% 64% 67% 70% 73% 75% 76% 78%

IMR (13k) 11% 44% 58% 66% 72% 75% 78% 81% 82% 84% 85%

0%

25%

50%

75%

100%

Source: CWCI

CWCI – July 2017



$8,726

$13,208

$31,971$29,237

$42,113

$38,133

$40,455

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Estimated Average Medical Cost per Indemnity Claim by Accident Year

Source: WCIRB 2017

1990 – 2012

358% increase

2012 – 2015

(863)

5% decrease2002-2005

(227/228/899)

9% decrease

1996-2003

Minnear era

250% increase

Accident Year

2015 - 2016

6% increase


Agenda

Exhibit 10

Cumulative Trauma

• Dec 2016 Study

• Collaboration with WCIRB

• Analysis of CT and Non-CT Claim Characteristics and Outcomes

• DOI 2005 - 2013

CWCI – July 2017



The peculiar problem of CT in CA

Background:

• A few states prohibit cumulative trauma claims altogether

• Some states impose a high standard of proof

• Other states require that the employee prove that the cumulative injury occurred using a standard of clear and convincing evidence

• California has a relatively low bar for cumulative trauma claims

• Preponderance of evidence standard applies

• Only 1% causation required to obtain TD, PD, and medical treatment for all body parts included in CT claim

Exhibit 11


� Classic Example: Employee spends a 30-year career performing heavy lifting, pushing, and pulling and knees or something else wears out

� Other Examples:� Physician-Assisted

� Attorney-Induced

� Created by Co-Defendant

� Post-termination

� Retirement

Where do CT claims come from?

Exhibit 12

CWCI – July 2017



Estimated Frequency ChangesAt 1st Report (18 Months)

-6.3

-4.0

-6.2

-3.2

6.4

-1.1

2.9

0.5

-0.2

-6.1-4.4

-6.3

-4.1

5.6

-0.4

2.4

-1.3 -1.5

-15

-10

-5

0

5

10

15

2006 2007 2008 2009 2010 2011 2012 2013 2014Accident Year

Statewide

Statewide Excluding Cumulative InjuryClaims

%

13

PreliminaryPartial

Source: WCIRB

Exhibit 13


Cumulative Trauma: Study Questions

1. How do claim characteristics vary for CT vs Non-CT Claims?

2. Are differences in payment flows and the existence of companion claims influencing average claim costs and masking underlying increases?

3. What are the contributing factors that cause the observed differences?

Exhibit 14

CWCI – July 2017



• Data Sources for subset of IRIS data contributors:o WCIRB Unit Stat Reportingo Integrate with CWCI IRIS claims data

• CT and Non-CT Claims w Notice Dates from 2005 –13

• Claim milestones and payments valued through 2015

Cumulative Trauma Study:Data Preparation

Exhibit 15


Percent of Claims that are CT by Region – So. California

6.1%

20.5%

4.1%

13.3%

4.8%

8.9%

0%

5%

10%

15%

20%

25%

2005 2006 2007 2008 2009 2010 2011 2012 2013

L.A. Inld Emp/Orang SD

Exhibit 16

Carrier Notice Year

CWCI – July 2017



0%

5%

10%

15%

20%

25%

2005 2006 2007 2008 2009 2010 2011 2012 2013

Central Coast Bay Area Sierras North Counties Valleys

Exhibit 17

Carrier Notice Year

Percent of Claims that are CT by Region – Rest of California


Claim Characteristics:

Notification – Average Days

Source: CWCI 2017

Exhibit 18

C CVV I

Non-CT: 27 Days

CT: 258 Days

CWCI – July 2017



0.0%

1.0%

2.0%

3.0%

4.0%

16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68

CT Non-CT


Age

Exhibit 19


24.0% 24.3%

32.7%

8.6%10.5%

43.9%

22.6% 23.0%

4.8% 5.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

<= 1yr 1-3 yrs 3-10 yrs 10-15 yrs 16+ Yrs

CT Non-CT


Tenure

Exhibit 20

CWCI – July 2017




Industry

Exhibit 21



Region

Exhibit 22

CWCI – July 2017



57.0%

32.1%

0%

10%

20%

30%

40%

50%

60%

CT Non-CT


Percent w Indemnity Payment

Exhibit 23


Years from Carrier Notice to ClosureIndemnity Claims

26%

5%

97%

83%

Exhibit 24

Carrier Notice Year

CWCI – July 2017



Attorney Involvement

80%

91%

19%

46%

0%

20%

40%

60%

80%

100%

All Claims Indemnity Claims

CT Non-CT

Exhibit 25


CT as Percent of Attorney Involved Claims

2005 2006 2007 2008 2009 2010 2011 2012 2013

LA Basin 19.0% 20.0% 24.7% 27.1% 30.7% 35.1% 36.0% 37.8% 40.4%

Rest of State 12.4% 14.7% 17.6% 16.7% 18.4% 20.0% 19.6% 18.9% 19.3%

0%

15%

30%

45%

LA Basin Rest of State

Exhibit 26

Carrier Notice Year

CWCI – July 2017



Percent of Injured Workers with One or More Related Claims

Source: CWCI

Exhibit 27


Indemnity Claims Indemnity Claims Developed to 7 Years

Adjusted for Mix – Demographics & Condition

Average Cost Per Claim

Exhibit 28

Without Region &Attorney Involvement

With Region & AttorneyInvolvement

CT $73,830

Non-CT $48,312

$0

$20,000

$40,000

$60,000

$80,000

Source: CWCI 2017

CWCI – July 2017



Average Total Cost Per Claim

Exhibit 29

Without Region &Attorney Involvement

With Region & AttorneyInvolvement

CT $73,830 $72,416

Non-CT $48,312 $73,046

$0

$20,000

$40,000

$60,000

$80,000

Indemnity Claims Indemnity Claims Developed to 7 Years

Adjusted for Mix – Demographics & Condition

Source: CWCI 2017


AB 221 (Gray) – CAAA’s CT Bill (proposed)

Requires ER liability for med treatment in CT/OD cases if any

one of five criteria is met:

1. treatment was authorized, or

2. body part was accepted, or

3. court finds industrial injury, or

4. AME/PQME finds industrial causation, or

5. case was settled by C&R >$25,000

Exhibit 30

New & Proposed Legislation

CWCI – July 2017



• Growing frequency – Driven primary by LA Basin

• Late claim notification

• Higher attorney involvement and disputes over compensability

• Significantly slower development, higher average cost per claim

Cumulative Trauma: Summary of Findings

Exhibit 31


Implementing the Rx Formularies

� November 2014 CWCI Study: Potential impact of a state formulary

� Modeled CA data using Texas and Washington State Formularies

� Estimated system-wide savings of 10 – 50%

� AB 1124 - October 2015

� Calls for creation of a State Formulary

� Target Implementation - July 2017

Jan 2018

Exhibit 32

CWCI – July 2017



Source: CWCI 2016

Formulary Considerations: Unit Pricing Variation

$0

$1

$2

$3

$4

Min P50 Max

$0.58$0.78

$3.57

AWP

Hydrocodone-Acetaminophen Tab 10-325 MG


Source: CWCI 2016

$0

$2

$4

$6

Min P50 Max

$0.04 $0.46

$5.46

AWP

Formulary Considerations:Unit Pricing Variation

Ibuprofen Tab 800 MG

CWCI – July 2017



Opioid Use at 24 Months Post InjuryPcnt of Claims with Opioid Script(s)

1 Kings 39.5%

2 Fresno 36.8%

3 Madera 34.2%

4 Monterey 34.1%

5 Imperial 33.0%

Highest

Statewide: 24.4%

1 Napa 14.7%

2 Inyo 15.6%

3 Plumas 16.0%

4 Trinity 16.6%

5 Siskiyou 17.3%

Lowest

Source: CWCI 2017


Exhibit 36

Key Draft Components Released August 26th

� DWC Draft Regulations

� MTUS Drug List

� RAND Report

Implementing AB 1124 Drug Formulary and update of MTUS

Proposed Regs Released March 20th

Public Hearing May 1st

Intent of the formulary� Improve quality of care� Lower cost� Reduce UR and IMR friction

costs

CWCI – July 2017



Friction Costs:Pharmacy Review in UR and IMR

Source: CWCI 2015

Util Review IMR

Pharmacy 45% 49%

Other 55% 51%

0%

25%

50%

75%

100%


Exhibit 38

Proposed Formulary Components Released March 20th :

� MTUS Drug List (N=242)

Implementing AB 1124 Drug Formulary and update of MTUS

Drugs are designated into categories:

� Preferred

� Non-Preferred

� Not Listed

CWCI – July 2017



Implementing AB 1124: Drug Formulary

Preferred, Non-Preferred, or Not Listed

Prescriptions and Payments

Source: CWCI 2017

% of Prescriptions % of Payments

Preferred 25.8% 19.7%

Non-Preferred 53.4% 48.1%

Not Listed 20.7% 32.2%

0%

25%

50%

75%

100%

Preliminary Results: Do Not Cite


Therapeutic Group PreferredNon

Preferred

Not Listed

in MTUS

Analgesics - Opioid 0.0% 96.6% 3.4%

Analgesics - Anti-Inflammatory 82.4% 2.2% 15.4%

Musculoskeletal Therapy Agents 0.0% 98.0% 2.0%

Anticonvulsants 0.0% 98.5% 1.5%

Antidepressants 0.0% 96.1% 3.9%

Ulcer Drugs 98.7% 0.0% 1.3%

Dermatologicals 28.7% 34.3% 37.0%

Hypnotics/Sedatives/Sleep Disorder Agents 0.0% 1.0% 99.0%

Antianxiety Agents 0.0% 44.4% 55.6%

Antihypertensives 0.0% 5.6% 94.4%

Antihyperlipidemics 0.0% 0.0% 100.0%

Laxatives 0.0% 0.0% 100.0%

Corticosteroids 0.0% 57.7% 42.3%

Beta Blockers 0.0% 0.0% 100.0%

Chemicals 1.8% 78.7% 19.4%

Cephalosporins 0.4% 68.7% 30.9%

Analgesics - Nonnarcotic 68.3% 31.4% 0.3%

Antipsychotics/Antimanic Agents 0.0% 0.0% 100.0%

Ophthalmic Agents 39.9% 15.2% 44.9%

Calcium Channel Blockers 0.0% 75.6% 24.4%

All Other 9.5% 15.1% 75.3%

Total 25.6% 53.4% 21.0%

Exhibit 40

Implementing AB 1124 Drug Formulary and update of MTUSObjectives

� Identifies drug groups that the formulary will most impact;

CWCI – July 2017



Exhibit 41

Pending Changes in the Formulary Regulations

• Recent changes in ACOEM formulary modifies the DWC Drug list: o 31 new drugs, o Brand name examples and o Additional details on dose, strength and unique product

identifier

• Preferred/Non-Preferred to Exempt/Non-Exempt

• Retrospective review language moves to UR regulation

• Ongoing use of non-exempt, unlisted or compounded drugs will require: o Progress reports o Treatment plan for safe weaning/transitiono RFA supporting material

DWC Medical Director announced:


Getting Real.

CWCI – July 2017




GET THE PATIENT THE

RIGHT MEDS

QUICKLY & EASILY

KEEP PATIENTS SAFE

CWCI – July 2017




What decisions are we talking

about?� Vast majority of drug script transactions are

seamless, smooth, frictionless

� A small percentage are stopped – most for good reason

� Aspirin

CWCI – July 2017



The Goal


The feared End Product

CWCI – July 2017



Payer

PrescriberPharmacy

PBM

Patient


Patient Safety

Access to Care

CWCI – July 2017




CWCI – July 2017



Implementing a formulary

Who pays?


CWCI – July 2017



Cumulative Trauma Injuries

& The Rx Formulary

A California Workers’ Compensation

System Update

Alex Swedlow, President

Joe Paduda, Principal

C CVV I

Thanks for listening

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