LexisNexis Workers' Comp Free eNewsletter: Prescription Drug Costs

Vol 2, Issue 38

Find Solutions & Strategies September 19, 2011

Prescription Drug Costs

NCCI says increased use of expensive drugs is one factor fueling the rise in costs

In This Issue

-PRESCRIPTION DRUGS

-LARSON'S SPOTLIGHT: 5 RECENT CASES: Occupational Disease, Dismissal of Claim, Loss of Sight, RICO, Hearing Loss

-LARSON'S eBOOK

-BLOGS @ LEXISNEXIS WORKERS' COMP COMMUNITY: Fraud, DE news, MO case, TX news

-NATIONAL NEWS

-STATE NEWS

-eNEWSLETTER ARCHIVES

A Note From The Editor

Dear WC Professionals:

I highly recommend reading NCCI's research brief analyzing what's behind the trend of workers' comp prescription drug costs.

Sincerely,
Robin E. Kobayashi, JD

LexisNexis Legal & Professional Operations

robin.e.kobayashi@lexisnexis.com

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prescription drug costs

NCCI Addresses Workers' Compensation Prescription Drugs Costs: Increased Utilization of Predominantly Expensive Drugs Fuel Cost Rise

An August 2011 research brief by the National Council on Compensation Insurance, Inc. (NCCI) analyzed the trend of prescription drugs constituting a disproportionately high percentage of workers' compensation expenses. The researchers concluded that a 12-percent increase in the per-claim portion of that expense in 2009 has resulted in prescription drugs equaling roughly 20 percent of workers' compensation costs. The brief is the latest in an ongoing series of reports that the NCCI has prepared on the cost of prescription drugs in the workers' compensation system. Some notable highlights of the report are:

>Demand and Supply. Increases in the total number of prescriptions and the demand for more costly drugs in the workers' compensation system more significantly impacts workers' compensation prescription drug prices than rising drug prices. In simpler terms, the report concluded that it was highly likely that an overall increase in utilizing expensive prescription drugs was a significant reason that the cost of that treatment has reached a noteworthy level. > Read more.

Larson's spotlight: 5 recent cases you should know about

5 spotlight Larson's Spotlight reports noteworthy workers' comp cases each week. This list was compiled by Thomas A. Robinson, a staff writer for Larson's Workers' Compensation Law, the nation's leading authority on workers' compensation law.

> Read the summaries & court decisions.

1. MO: Court Nixes Exclusive Remedy Provisions for Occupational Disease Claims

2. NE: Dismissal of Claim for Failure to Cooperate Was Erroneous

3. OH: Employee Suffers No Compensable Loss of Sight in Connection with Corneal Transplant

4. US: Fifth Circuit Sends Louisiana RICO Case Back to Federal District Court, Reverses Prior Remand to State Court

5. PA: Sale of Assets to "New" Employer Does Not Mean It is Responsible for 100 Percent of Hearing Loss Claim

who says you can't take it with you?

Ebook Ereader Device Introducing the Larson's Workers' Compensation, Desk Edition eBook from LexisNexis®. It's portable, dependable, and simple to use on your computer with e-reader software like Adobe® Digital Edition, or on dedicated e-reader devices, such as Apple® iPad®, Sony® Reader, and Amazon® Kindle™.

Attorneys, courts, employers, insurance professionals, government entities, policymakers, and others involved with workers' compensation issues depend on Larson's authoritative and incisive coverage on the exclusive remedy defense, employment status, medical and death benefits, psychological injuries, third-party claims, and more.

With Larson's you'll also get a bird's eye view of the various jurisdictions and their interpretations of complex workers' compensation issues. Now, this same trusted content is ready whenever you need it and wherever you are, 24/7.

WORKERS' COMPENSATION CENTENNIAL DISCOUNT: SAVE 20 PERCENT ON THIS eBOOK.

blogS at the lexisnexis workers' comp law community

Workers' Comp Fraud Blotter - Caterer Caught On Video Cooking and Coordinating Events While On Disability, by LexisNexis Workers' Compensation Law Community Staff. Read it.

The Song of Solomon Post...and Another Two of Your Delaware "Motion Day" Questions Answered!, by Cassandra Roberts, Esq. Read it.

More Big Doin's in Delaware: New IAB Rules Proposed, by Cassandra Roberts, Esq. Read it.

l Believe I Can Fly - A Song or a Theory of Compensability in Delaware?, by Cassandra Roberts, Esq. Read it.

MO: Western District Announces 'Open Season' on Employers, by Martin Klug, Esq. Read it.

TX: Recoupment, by Stuart Colburn, Esq. Read it.

TX: Performance Based Oversight Committee Update, by Stuart Colburn, Esq. Read it.

national news

Experts Dispute Drug, Alcohol Impact on Workers Compensation Cases.

OSHA Issues Directive for Investigation of Workplace Violence Incidents.

NICB Reports 4.5 Percent Rise in First Half 2011 Questionable Claims.

state news

AK: Labor and Commerce Committee to Review Recent Court Case on Liability for Workers Comp Claims.

AZ: Industrial Commission Says Work-Related Deaths Decreased in 2010.

CA: Governor Brown Threatens to Veto A Lot of Bills During Next 30 Days.

CA: AIA Urges Governor to Veto Bills on UR, Apportionment, TD Cap.

CA: CAAA Announces 2011-12 Leadership Team, Priorities for Coming Year.

CA: The "Soda Machine" for Prescriptions Used by Workers Comp Claimants.

CT: Labor Dept. Halts Work at Several Construction Sites for Worker Misclassification.

DE: New IAB Procedural Rules Proposed.

FL: OIR Schedule Oct. 11 Public Hearing on Proposed Workers Comp Rate Increase.

FL: DWC Post Notice of Rule Changes on Loss Data Reporting, Civil Penalties and Fines.

FL: Insurance Council's Agenda Includes Addressing Workers Comp Drug Repackaging.

IL: Judge Rules Three Chicago Bears Players Violated Contract by Seeking Workers Comp in California.

IL: 30 Workers Comp Arbitrators Remain on Payroll Until Successors Appointed.

IL: IWCC Hires New Operations Manager/Secretary.

IL: IWCC Hires Independent Contractual Arbitrators.

IL: Governor Appoints New Members to Workers Comp Medical Fee Advisory Board.

IL: 2012 Fee Schedule Rates to Increase 3.77 Percent.

IN: WCB Proposes Rule Changes for Medical Provider Fees, Attorneys Practicing Before Board, Mediation Fees, Etc.

ME: Governor Selects Eric Cioppa as Maine's Insurance Commissioner.

MD: WCC Proposes Rule Changes for Submitting MSAs to CMS.

MI: Accident Fund Launches Online Workers' Compensation Resource.

MT: Governor Reappoints James Shea as Workers Comp Judge.

NE: Supreme Court Backs Worker Whose Claim Was Dismissed for Alleged Failure to Cooperate.

NE: Governor Appoints Thomas Stine to Workers Compensation Court.

NH: Oct. 4 Hearing Scheduled for Possible Wrongdoings by LGC.

NY: 9/11 Victim's Fund Recipient Ordered to Pay $3.2M Fine Under False Claims Act.

NC: Industrial Commission Posts Maximum Weekly Benefit Rates for 2012.

OH: BWC Publishes Final Rule Setting Limitations on Filing of Fee Bills.

OH: Modern Medical to Repay BWC $400K for Improper Billing.

OH: GOP Lawmaker Says Workers Comp on Agenda for Upcoming Legislative Session.

OK: Attorney General OK's Governor's Husband in Representing CompSource.

OK: Governor Says Workers Comp Rates May Finally Decline, This After 8 Years.

OK: Governor Makes Appointments to Workers Comp Advisory Council.

OR: DCBS Schedules Hearing for 2012 Workers' Compensation Premium Assessment Rates.

OR: DCBS Posts Oregon Ombudsman for Injured Workers Annual Report, CY 2010.

OR: WCD to Discuss Possible Changes to Oregon Medical Fee and Payment Rules.

OR: WCD to Discuss Possible Changes to Managed Care Organizations Rules.

OR: WCD to Discuss Possible Changes to Rules Governing Medical Services.

SC: Grant Duffield Joins WCC as Insurance and Medical Services Director.

SC: Chairman Beck Posts Report on Proposed Changes to Payments for Medical Services.

SC: Chairman Beck Comments on Proposed Methodologies for Medical Fees.

SC: WCC Approves Policy to Consider Other Financial Models for Fee Schedule.

TX: DWC Posts Study on Return to Work Outcomes for Injured Employees.

WA: L&I Seeks to Raise Workers Comp Rates to Restore Workers Comp Reserves.

WA: Contractors Group Opposes Workers Comp Premium Increases for 2012.

WV: NCCI Reports Decreases in Indemnity, Medical Costs, Slight Increase in Claims Frequency.

prescriptions, cont.

>FDA Approval of Drugs. Widely prescribed drugs in workers' compensation cases include OxyContin, Lidoderm, and Hydrocodone-Acetaminophen. Trends in prescribing particular drugs within the workers' compensation system reflect factors that include FDA approval of those medications. Further, as mentioned above, the proportional cost of prescription drugs compared to other expenses related to workers' compensation claims will likely increase the more that expensive drugs become popular in the system.

>Life of a Claim. The trend of prescription drug costs to increase significantly during the life of a workers' compensation claim is another significant factor in that expense being relatively high. The report illustrates this by estimating that prescription drug costs are 3 percent of all medical expenses during the first few years of a workers' compensation claim and then approach 50 percent and begin slowing down after a claim is approximately a decade old.

>Prescriptions Filled at Doctor's Office. The researchers observed that a larger number of physicians having patients fill prescriptions in the physician's office, rather than a retail drug store, contributed to the increased cost of providing workers' compensation claimants prescription drugs. The impact of this factor varied significantly across the country because the percentage of physicians who engaged in this practice ranged dramatically from state to state.

>Risk of Serious Physical Injury. The researchers noted another factor that likely affected statistics regarding workers' compensation prescription drug costs in individual states, i.e., the percentage of industries in a state that place employees at an above average risk of serious physical injury that is more likely to require greater utilization of prescription drugs than a typical injury related to sedentary work. For example, a state in which a large percentage of people work in agriculture is more likely to have higher workers' compensation prescription drug costs than a state in which most people work in an office.