Highlights Of WCRI Research CANE Spring Meeting March 20, 2017

Topics Covered In Today’s Discussion Shifts in provision of workers’ compensation medical services Trends in indemnity benefits per claim: Effects of reforms in selected states Impact of physician dispensing reforms Interstate variation in opioid use © Copyright 2017 WCRI. All Rights Reserved.

About WCRI And Our Mission Independent, not-for-profit research organization Mission: “Be a catalyst for improving WC systems by providing the public with high-quality, credible information on important public policy issues.” Diverse membership support Peer-reviewed studies with a focus on benefit delivery Do not make recommendations or take positions; serve as a resource for public officials & stakeholders Content-rich website: www.wcrinet.org © Copyright 2017 WCRI. All Rights Reserved.

WCRI Provides Broad Scope Of Studies State CompScope™ Worker Outcomes Longer-Term Use Of Opioids MCC Inventory Medical Price Index Physician Dispensing In WC Prescription Benchmarks Hospital Cost Index Interstate Variation In Use Of Narcotics Hospital/ASC FS Inventory Payments To ASC © Copyright 2017 WCRI. All Rights Reserved.

Shifts In Provision Of Workers’ Compensation Medical Services Evidence From WCRI Studies

Less Use Of Hospital Care In WC: Follows Trends In General Health Care Decrease in hospital inpatient care Shift to free-standing facilities from hospital outpatient facilities, such as ambulatory surgery centers (ASCs) Decreased use of hospitals for some services that are more expensive when provided in hospitals; shift to nonhospital WC: Workers’ Compensation © Copyright 2017 WCRI. All Rights Reserved.

Factors That May Influence Shifts In Provision Of WC Medical Services Federal interventions: Changes in Medicare approach, reimbursement, and billing Affordable Care Act /replacement?? Changes in business models: such as consolidations, facility and physician practice ownership, contractual incentives Competition for access: WC reimbursement vs. other payors Local and state medical care delivery models/practice norms Legislative or administrative system features and changes focused on WC reimbursement or utilization of medical care Choice, convenience, and cost © Copyright 2017 WCRI. All Rights Reserved.

All Payors: Hospital Outpatient Use Grew Much Faster Than Inpatient Use, 2000–2014 32.9 12.1 8.0 6.7 6.9 Source: American Hospital Association, AHA Hospital Statistics from Health Care Spending and the Medicare Program: A Data Book, June 2016 . Medpac (Medicare Payment Advisory Commission). Located at http://www.medpac.gov/docs/default-source/data-book-health-care-spending-and-the-medicare-program.pdf. Source: American Hospital Association, AHA Hospital Statistics © Copyright 2017 WCRI. All Rights Reserved.

WC: Decrease In % Of Claims With Hospital Inpatient Episodes In Most Study States Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

% Point Change 2009 To 2014 In % Of Claims With Inpatient Episodes % Claims With Inpatient Episodes Decreased In Many Study States 2009–2014 % Point Change 2009 To 2014 In % Of Claims With Inpatient Episodes Key: ASC: Ambulatory surgery center. Note: Trends in percentage of claims with hospital inpatient episodes are not shown for Arkansas because the cell sizes underlying the data are too small to support a trend analysis. Claims With Hospital Inpatient Episodes As A Percentage Of Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Increase In Hospital Payments Per Inpatient Episode In Most Study States, 2009–2014 Median State: 24% (or 4% per year) .Note: Arkansas is excluded from this chart because the cell sizes underlying the data are too small to support a meaningful analysis. The trend in Illinois was related to the 30 percent decrease in fee schedule rates, effective September 1, 2011. The trend in Indiana reflected up to 9 months of experience under the hospital fee schedule, implemented July 1, 2014. The trend in North Carolina was related to the 2013 interim fee schedule changes. Kentucky is not included in this chart because data in this state in 2008/09 are not available. Cumulative % Change 2009 To 2014 In Hospital Payments Per Inpatient Episode; Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

NJ Low Back Disc Cases With Surgery: Shift From Inpatient To Outpatient % Of Low Back Disc Cases With Inpatient Surgery % Of Low Back Disc Cases With Outpatient Surgery Key: ICD-9: International Classification of Diseases, 9th Revision. 722.10: displacement of lumbar intervertabral disc w/out myelopathy 724.40: thoracic or lumbosacral neuritis or radiculites unspecified Note: Low back disc cases are defined as low back claims with at least half of the medical dollars spent on a set of seven disc-related ICD-9 codes; the most frequent codes included are 722.10 and 724.40. Low Back Cases With Disc Conditions, Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks For New Jersey, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Payments Higher, Growing Faster For Low Back Disc Cases With Inpatient Surgery Low Back Disc Cases With Outpatient Surgery 12 Mos. 24 Mos. 36 Mos. AAPC 4.0% 6.2% 2.7% 12 Mos. 24 Mos. 36 Mos. AAPC 1.0% 2.9% 2.6% Key: AAPC: Annual average percentage change. Mos.: Months. ICD-9: International Classification of Diseases, 9th Revision. It is important to note that even within this relatively homogenous group of cases, there could be differences in the mix and complexities of surgery performed at inpatient and outpatient settings. Note: Low back disc cases are defined as low back claims with at least half of the medical dollars spent on a set of seven disc-related ICD-9 codes; the most frequent codes included are 722.10 and 724.40. Average Medical Payment Per Episode, Low Back Cases With Disc Conditions With Surgery, Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix; AAPC: Annual Average Percentage Change Source: CompScope™ Medical Benchmarks For New Jersey, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Less Use Of Hospital Care In WC: Follows Trends In General Health Care Decrease in hospital inpatient care Shift to free-standing facilities from hospital outpatient facilities, such as ambulatory surgery centers (ASCs) Decreased use of hospitals for some services that are more expensive when provided in hospitals; shift to nonhospital © Copyright 2017 WCRI. All Rights Reserved.

Rapid Increase In Medicare-Certified ASCs Through 2008, Then More Modest Growth Source: Medpac (Medicare Payment Advisory Commission) Health Care Spending and the Medicare Program: A Data Book, June 2016 . Located at http://www.medpac.gov/docs/default-source/data-book-health-care-spending-and-the-medicare-program.pdf. Source: MedPAC (Medicare Payment Advisory Commission), A Data Book: Health Care Spending And The Medicare Program, June 2016 And Earlier Years © Copyright 2017 WCRI. All Rights Reserved.

% Of Claims With Facility Services Many States Had Decreases In % Claims With Hospital Outpatient Facility, Increases In ASC Hospital Outpatient Facility Services % Of Claims With Facility Services Ambulatory Surgery Center (ASC) Facility Services Key: ASC: Ambulatory surgery center. Claims With Facility Services (hospital and ASC treatment/operating/recovery room services) As A Percentage Of Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

% Point Change In % Of Claims With Facility Services, 2009 To 2014 Shift In % Of Claims From Hospital To ASC Facility In Many Study States 2009–2014 % Point Change In % Of Claims With Facility Services, 2009 To 2014 Key: ASC: Ambulatory surgery center. Note: 2014 refers to 2014/15. Other injury year/evaluation combinations are denoted similarly. Claims With Facility Services (hospital and ASC treatment/operating/recovery room services) As A Percentage Of Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Average Facility Payment Per Surgical Claim ASC Facility Payment/Surgical Claim Lower Than Hospital Outpatient In Many States More Than 15% Higher For ASC Than Hospital Outpatient Average Facility Payment Per Surgical Claim More Than 15% Lower For ASC Than Hospital Outpatient Average Facility Payment Per Surgical Claim, 2014 Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Less Use Of Hospital Care In WC: Follows Trends In General Health Care Decrease in hospital inpatient care Shift to free-standing facilities from hospital outpatient facilities, such as ambulatory surgery centers (ASCs) Decreased use of hospitals for some services that are more expensive when provided in hospitals; shift to nonhospital © Copyright 2017 WCRI. All Rights Reserved.

% Point Change In % Of Claims With Physical Medicine, 2009 To 2014 Shift From Hospital To Nonhospital Physical Medicine In Most Study States % Point Change In % Of Claims With Physical Medicine, 2009 To 2014 Key: PM: Physical medicine and chiropractic care Claims With Physical Medicine As A Percentage Of Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Average Payment/Service For Physical Medicine Hospitals Billed Higher Payments/Service For Physical Medicine Than Nonhospital Average Payment/Service For Physical Medicine More Than 50% Hospital-Nonhospital Difference In Payment Per Service Up To 50% Hospital-Nonhospital Difference In Payment Per Service Note: Nonhospital is based on price index, hospital outpatient is based on payment per service. Average Payment Per Service For Physical Medicine, 2014 Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Average Payment/Service For Major Radiology Major Radiology Payment/Service: Hospital Outpatient Mostly 2–4 Times Nonhospital Average Payment/Service For Major Radiology Average Payment Per Service For Major Radiology, 2013 Claims With > 7 Days Of Lost Time At 24 Months Of Experience, Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

% Point Change In % Of Claims With Major Radiology, 2009 To 2013 Increased Use Of Nonhospital Major Radiology Services In Some Study States % Point Change In % Of Claims With Major Radiology, 2009 To 2013 Key: PM: Physical medicine and chiropractic care. PT/OT: Physical/occupational therapist. Claims With Major Radiology As A Percentage Of Claims With > 7 Days Of Lost Time At 24 Months Of Experience, Not Adjusted For Injury/Industry Mix; Source: CompScope™ Medical Benchmarks, 17th Edition (2016) © Copyright 2017 WCRI. All Rights Reserved.

Topics Covered In Today’s Discussion Shifts in provision of workers’ compensation medical services Trends in indemnity benefits per claim: Effects of reforms in selected states Impact of physician dispensing reforms Interstate variation in opioid use © Copyright 2017 WCRI. All Rights Reserved.

Trends In Indemnity Benefits Per Claim: Effects of Reforms In Selected States

Indemnity Benefits Per Claim: NC Among Highest, IN Among Lowest Of Study States Median State: $18,424 Key: HB: House bill. Note: The reader should be aware that all lump-sum payments are reported as indemnity payments. This achieves consistency and comparability in this measure across all states because lump-sum payments to close out future obligations are rarely separated into medical and indemnity components in the data. Note: NC results reflect more than two years of experience under HB 709 (effective 6/24/11). 2013/16 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix Source: CompScope™ Benchmarks , 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Recent Indemnity-Related Reforms In Indiana and North Carolina Low maximum benefit one factor in lower indemnity benefits per claim HEA 1320 (2013) increased the maximum statutory weekly benefit and permanent partial impairment benefits North Carolina: Longer duration of temporary disability and higher lump sum settlements: drivers of higher indemnity benefits per claim HB 709 (2011) capped duration of TTD and TPD benefits © Copyright 2017 WCRI. All Rights Reserved.

2013 Legislation In Indiana Increased Indemnity Benefits

HEA 1320 Increased Income Benefits Over 3 Years, Beginning In 2014 Maximum statutory weekly benefit increased 20% overall, from $650 To $693.33 effective 7/1/2014 (6.7% increase) To $736.67 effective 7/1/2015 (6.3% increase) To $780.00 effective 7/1/2016 (5.9% increase) Permanent partial impairment benefit amount per degree of impairment increased 16%–25% overall; more for lower categories Maximum compensation payable increased from $325,000 to $390,000 Source: CompScope™ Benchmarks For Indiana, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

5% Increase In Indiana Indemnity Benefits Per Claim In 2015; Had Been Fairly Stable AAPC 2004 To 2013 12 Mos. 2.3% 24 Mos. 2.7% 36 Mos. 3.2% 48 Mos. n/a -1.8% -0.4% 4.9% Key: AAPC: Annual average percentage change. Mos.: Months. Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix Source: CompScope™ Benchmarks For Indiana, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Indemnity Benefits/Claim 2010–2015 Stable Overall; Several Factors Drove 2015 Growth 1.9%/Year 1.1%/Year 2.0%/Year Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix Source: CompScope™ Benchmarks For Indiana, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

After 2 Of 3 Increases: IN Maximum Statutory TTD Benefit Lower Than Many States Increases In Maximum Benefit 7/1/14 $694 7/1/15 $737 7/1/16 $780 Maximum Weekly TTD Benefit After 2 of 3 Increases Key: TTD: Temporary total disability. Maximum Weekly Statutory Temporary Total Disability Benefit As Of July 1, 2015 Source: CompScope™ Benchmarks For Indiana, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Mostly After First Increase: 1 In 6 IN Injured Workers Had Benefits Limited By Maximum Median State: 10.8% 2016 Estimate: 10% Key: TTD: Temporary total disability. Note: Data for Indiana reflect mostly the first of three increases in the maximum weekly statutory TTD benefit. 2015/16 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix Source: CompScope™ Benchmarks For Indiana, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

2011 Legislation In NC: Aimed At Drivers Of Higher Indemnity Costs

Factors That Contribute To Higher Indemnity Benefits Per Claim In North Carolina North Carolina has aspects of both a wage-loss and PPD benefit system An injured worker who has not returned to work at the end of the healing period either continues to receive TTD benefits (as in a wage-loss benefit system) or elects to receive PPD benefits, resulting in Longer duration of temporary disability (no limit prior to HB 709) Higher % of claims with lump-sum settlements and higher lump-sum settlements than many states Key: PPD: Permanent partial disability. Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

HB 709 Capped Duration of TTD and TPD Benefits 500 week cap on TTD benefits from date of disability (provision for extended benefits) 500 week cap on TPD benefits beginning at first TPD payment, less any TTD Specifies a more precise and narrower definition of suitable employment for pre-and post-MMI cases Worker access to VR services, including education, if no RTW or RTW at < 75% of preinjury AWW Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

NC Indemnity Benefits Per Claim Fairly Stable Since 2009, After Rapid Growth Recession/ Early Recovery AAPC 2004 To 2009 Since 2009 12 Mos. 7.7% 2.0% 24 Mos. 7.1% 0.4% 36 Mos. 6.3% -1.3% 48 Mos. 6.2% -3.8% 2.6% 5.2% Key: AAPC: Annual average percentage change. HB: House bill. Mos.: Months. Note: The reader should be aware that all lump-sum payments are reported as indemnity payments. This achieves consistency and comparability in this measure across all states because lump-sum payments to close out future obligations are rarely separated into medical and indemnity components in the data. Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Cumulative % Or PPT Change Most NC Indemnity Components Fairly Stable Except Weeks Of Temporary Disability Performance Measure 2009/12 (pre-HB 709) 2013/16 (post-HB 709) Cumulative % Or PPT Change Indemnity Costs/Claim $26,666 $25,305 -5.1% Average Weekly Wage Of Injured Workers $639 $687 +7.5% Duration Of Temporary Disability (weeks) 24.6 20.0 -4.6 weeks (-18.6%) % Lump-Sum Claims 41.4 43.0 +1.6 ppt Lump-Sum Payments/ Claim With Lump Sum $35,373 $35,045 -0.9% Key: HB: House bill. ppt: Percentage points. Claims With > 7 Days Of Lost Time At 36 Months Of Experience, Not Adjusted For Injury/Industry Mix And Wages; Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Cumulative % Change, 2009/12 To 2013/16 Weeks Of Temporary Disability Decreased More In NC Than In Other States Median State: -3% (0.6 weeks) 4.6 Weeks Cumulative % Change, 2009/12 To 2013/16 3% Weeks Of Temporary Disability, Claims With > 7 Days Of Lost Time At 36 Months Of Experience, Not Adjusted For Injury/Industry Mix; Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

NC Weeks Of TD Decreased 2009–2013 (Pre & Post-HB 709); Little Recent Change AAPC 2004 To 2009 2009 To 2013 12 Mos. 2.1% -2.3% 24 Mos. 2.4% -4.0% 36 Mos. 2.3% -5.0% 48 Mos. n/a HB 709 +0.6% Key: AAPC: Annual average percentage change. HB: House bill. Mos.: Months. n/a: Not applicable. TD: Temporary disability. Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

TD Per PPD/Lump-Sum Claim (weeks) TD Duration Decrease Since 2012 May Partly Reflect Earlier Settlements Under HB 709 TD Per TD Claim (weeks) TD Per PPD/Lump-Sum Claim (weeks) -0.8 Wk -1.0 Wk -1.6 Wk -0.5 Wk 0.5 Wk Key: Mos.: Months. n/a: Not applicable. PPD: Permanent partial disability. TD: Temporary disability. Wk: Weeks. Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix And Wages Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Recent NC Trends In % Lump-Sum Claims And Amounts May Relate To HB 709 % Of Claims With Lump Sums Lump-Sum Settlements/Claim HB 709 -5% -6% +4% HB 709 Key: HB: House bill. Mos.: Months. Claims With > 7 Days Of Lost Time With Lump-Sum Settlements, Not Adjusted For Injury/Industry Mix And Wages; Source: CompScope™ Benchmarks For North Carolina, 17th Edition (Forthcoming) © Copyright 2017 WCRI. All Rights Reserved.

Topics Covered In Today’s Discussion Shifts in provision of workers’ compensation medical services Trends in indemnity benefits per claim: Effects of reforms in selected states Impact of physician dispensing reforms Interstate variation in opioid use © Copyright 2017 WCRI. All Rights Reserved.

20 States Changed Rules Governing Reimbursement For Physician-Dispensed Drugs ID MI PA CT NV IL IN DE KS Reform States Focusing On Cost Reduction Only CA NC AZ TN OK SC AL GA Reform States Further Limiting Physician Dispensing To Short Timeframe Or Certain Drugs MS FL States Where Physician Dispensing Not Allowed In General Or Infrequent HI © Copyright 2017 WCRI. All Rights Reserved.

Illustrative: In Illinois, The Same Drugs, When Physician-Dispensed, Are Much Higher Priced Common WC Drugs Prescribed By Physicians Price Per Pill % Difference Physician Rx Pharmacy Rx Hydrocodone-acetaminophen (Vicodin®) $1.41 $0.52 172% Ibuprofen (Motrin®) $0.49 $0.27 81% Tramadol HCL (Ultram®) $1.55 $0.73 114% Cyclobenzaprine HCL (Flexeril®) $1.85 $0.99 88% Meloxicam (Mobic®) $5.86 $3.19 84% Illinois 2011/12 Claims With > 7 Days Of Lost Time With Prescriptions. Source: The Prevalence And Costs Of Physician-Dispensed Drugs (2013) © Copyright 2017 WCRI. All Rights Reserved.

Physician Dispensing Is More Expensive, Even After Recent Reforms Many physicians continued to dispense after reforms Price-focused reforms reduced prices, but still ~30% higher than pharmacy filling same Rx Frequent physician dispensing of higher-priced new strengths drove up prices paid to physicians for 3 top drugs © Copyright 2017 WCRI. All Rights Reserved.

Fewer Prescriptions Filled At Offices Post-Reform, But Physician Dispensing Is Still Common Pre-Reform Post-Reform % Of All Prescriptions That Were Physician-Dispensed Prescriptions Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Avg. Price Per Pill Paid For Physician-Dispensed Cyclobenzaprine Substantial Price Reductions After Reforms In Most States, Except IL and FL Avg. Price Per Pill Paid For Physician-Dispensed Cyclobenzaprine Key: Rx: Prescriptions. 2014Q1: First Quarter Of 2014 (Latest Quarter Of Study Period). For Each Drug Product, States Are Presented In The Order Of Dispensing Frequency. © Copyright 2017 WCRI. All Rights Reserved.

Price Paid To Physicians For Cyclobenzaprine Increased At Different Times Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed By Physicians Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Price Paid To Physicians For Cyclobenzaprine Increased At Different Times Snapshot As Of 2013Q1 Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed By Physicians Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Price Paid To Physicians For Cyclobenzaprine Increased At Different Times Snapshot As Of 2013Q2 Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed By Physicians Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Price Paid To Physicians For Cyclobenzaprine Increased At Different Times Snapshot As Of 2013Q3 Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed By Physicians Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Price Paid To Physicians For Cyclobenzaprine Increased At Different Times Snapshot As Of 2013Q4 Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed By Physicians Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Price Paid To Physicians For Cyclobenzaprine Increased At Different Times Snapshot As Of 2014Q1 Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed By Physicians Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Pharmacy Prices For Cyclobenzaprine Changed Little Or Decreased After Reforms Pre-Reform Post-Reform Avg. Price Per Pill Paid For Cyclobenzaprine Dispensed At Pharmacies Calendar Quarter Relative To Reform Data include prescriptions filled up to March 31, 2014, for all medical claims with dates of injury within 24 months of the observation quarter. © Copyright 2017 WCRI. All Rights Reserved.

Frequent Physician Dispensing Of New Strengths, Paid At Higher Prices Example of cyclobenzaprine in Florida 5 and 10 milligrams most common prior to introduction of new strength (7.5 milligrams) 7.5-milligram cyclobenzaprine dispensed by physicians in Florida before reform, large increase in frequency after reform New strength not seen in pharmacy-dispensed prescriptions for cyclobenzaprine Average wholesale price for new strength Higher than AWPs for existing strengths Assigned by manufacturer, not repackager © Copyright 2017 WCRI. All Rights Reserved.

% Of Prescriptions For Cyclobenzaprine HCL (Flexeril®) By Strength Rapid Increase In Physician Dispensing New Strength Cyclobenzaprine In Florida Physician Dispensed Pharmacy Dispensed % Of Prescriptions For Cyclobenzaprine HCL (Flexeril®) By Strength Included are prescriptions dispensed by physicians and pharmacies in Florida from first quarter of 2012 (2012Q1) to first quarter of 2014 (2014Q1). © Copyright 2017 WCRI. All Rights Reserved.

Much Higher Price Paid To Physicians Who Dispensed New Strength Cyclobenzaprine In FL Physician And Pharmacy Prices For Cyclobenzaprine HCL, By Strength Pre-Reform (2013Q2) Post-Reform (2014Q1) Physician-Dispensed Prescriptions 7.5 Milligrams – New Strength $3.43 $4.11 5 Milligrams $1.83 $1.75 10 Milligrams $1.42 $1.29 Pharmacy-Dispensed Prescriptions 7.5 Milligrams—New Strength n/a $1.37 $1.38 $0.91 $0.93 Physician And Pharmacy Prices For Cyclobenzaprine HCL, By Strength Pre-Reform (2013Q2) Post-Reform (2014Q1) Physician-Dispensed Prescriptions 7.5 Milligrams—New Strength $3.43 $4.11 5 Milligrams $1.83 $1.75 10 Milligrams $1.42 $1.29 Physician And Pharmacy Prices For Cyclobenzaprine HCL, By Strength Pre-Reform (2013Q2) Post-Reform (2014Q1) Physician-Dispensed Prescriptions 7.5 Milligrams – New Strength $3.43 $4.11 2013Q2: Second Quarter Of 2013; 2014Q1: First Quarter Of 2014 © Copyright 2017 WCRI. All Rights Reserved.

High-Priced New Strength/Formulation Frequently Dispensed By Physicians In Several States % Of Physician-Dispensed Drug That Were For New Strength, In 2014Q1 CA FL IL TN 7.5 Milligrams Cyclobenzaprine HCL 55% 49% 22% 19% 150 Milligrams ER Tramadol HCL 47% 26% 41% 21% 2.5-325 Milligrams Hydrocodone-Acetaminophen 32% n/a 11% Lidocaine-Menthol Topical Pain Patches* 14% 24% – * Prescriptions for lidocaine-menthol as % of prescriptions for topical pain patches. 2014Q1: First Quarter Of 2014 (Latest Quarter Of Study Period) © Copyright 2017 WCRI. All Rights Reserved.

Prices For All Generic Drugs Dispensed By Physicians Increased More Rapidly Included are prescriptions dispensed by physicians and pharmacies in Florida from first quarter of 2012 (2012Q1) to first quarter of 2014 (2014Q1). © Copyright 2017 WCRI. All Rights Reserved.

Topics Covered In Today’s Discussion Shifts in provision of workers’ compensation medical services Trends in indemnity benefits per claim: Effects of reforms in selected states Impact of physician dispensing reforms Interstate variation in opioid use © Copyright 2017 WCRI. All Rights Reserved.

Amount of Opioids Decreased In Several States, Large Interstate Variations Still Persist 54–86% of injured workers with pain meds received opioids across 25 states Substantial interstate variation in amount of opioids received by injured workers, higher in LA, NY, and PA Injured workers received opioids on a longer-term basis in several states, highest in LA Sizable reductions in amount of opioids over the study period in several states Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2009, To September 30, 2012, Average 24 Months Of Prescriptions Filled Up To March 31, 2014 © Copyright 2017 WCRI. All Rights Reserved.

3 In 4 Injured Workers With Pain Meds. Received Opioids In Most States 86% 54% 2012/14: Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014. Rx: Prescriptions © Copyright 2017 WCRI. All Rights Reserved.

Opioid Drugs Commonly Prescribed To Injured Workers, Paid Under Workers’ Comp. % Of Pain Medication Rx That Were For … Federal Schedule 25-State Median 25-State Range Hydrocodone-APAP (Vicodin®) III* 30% 10%–46% Tramadol (Ultram®) IV 14% 11%–24% Oxycodone Products (Percocet®, OxyContin®) II 9% 1%–29% All Other Opioids (Morphine, Fentanyl, Buprenorphine, etc.) II & III 4% 2%–8% Non-Opioid Pain Medications – 41% 30%–54% * DEA issued a final rule to reschedule hydrocodone-combination products from Schedule III to Schedule II, effective October 2014. © Copyright 2017 WCRI. All Rights Reserved.

% Pain Rx For Hydrocodone-Combination Products Dropped By 7 PPT In NY % Of Pain Medication Rx That Were For … 2010/12 2012/14 % Point Change Hydrocodone-APAP (Vicodin®), Upscheduled from III to II in 02/2013 26% 19% -7 Tramadol (Ultram®) 11% 14% 3 Oxycodone Products (Percocet®, OxyContin®) 16% 2 All Other Opioids (Morphine, Fentanyl, Buprenorphine, etc.) 10% 8% -3 Non-Opioid Pain Medications 38% 43% 5 2012/14: Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014. Similar Notation Used For 2010/12 © Copyright 2017 WCRI. All Rights Reserved.

Amount Of Opioids Per Claim Was Unusually Higher In LA, NY, And PA Average Morphine Equivalent Amount (MEA) Per Claim With Opioids Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014; Excluded Claims With Extreme Values © Copyright 2017 WCRI. All Rights Reserved.

Higher Amount Could Be Driven By Longer Duration Or Stronger Doses MEA per claim = Number of Rx * Quantity * Strength * Morphine conversion factor(CF) Stronger doses Rx Fill Date Drug Name Morphine CF Narcotic Strength Qty. MEA 01/01/2012 Vicodin® 1 5mg 40 200 01/10/2012 Percocet® 1.5 10mg 60 900 1100 © Copyright 2017 WCRI. All Rights Reserved.

Had Longer-Term Use Of Opioids % Of Claims With Opioids That In LA, 1 In 6 Injured Workers With Opioids Received Opioids On Longer-Term Basis Had Longer-Term Use Of Opioids % Of Claims With Opioids That Longer-term use: Injured worker received an opioid Rx in first 3 months after injury and had 3+ visits to fill opioid Rx between 7th and 12th month post-injury Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014 © Copyright 2017 WCRI. All Rights Reserved.

Average Opioid Dose Was 350–450 Per Rx In Most Study States, Higher In PA & NY Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014 © Copyright 2017 WCRI. All Rights Reserved.

Small Proportion Of Claims Have Large Amount Of Opioids NY LA PA Percentile Distribution of MEA Per Claim With Opioids, 2012/2014 Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014 © Copyright 2017 WCRI. All Rights Reserved.

Higher Amount Of Opioids Per Claim In LA, NY, PA Even 6 Months Post-Injury Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2011, To September 30, 2012, Prescriptions Filled Through March 31, 2014 © Copyright 2017 WCRI. All Rights Reserved.

State Policies Addressing Opioids Prescribing And Dispensing Prescription drug monitoring programs (PDMP) Drug formularies Guidelines Limits on prescribing and dispensing Insurer and pharmacy benefit manager initiatives © Copyright 2017 WCRI. All Rights Reserved.

Significant Reductions In Amount Of Opioids Per Claim Seen In Most States Nonsurgical Claims With > 7 Days Of Lost Time, Injuries Occurring From October 1, 2009, To September 30, 2012, Average 24 Months Of Prescriptions Filled Up To March 31, 2014 © Copyright 2017 WCRI. All Rights Reserved.

Several Reforms Coincided With Reductions In Opioids Filled Over The Study Period MI OK MA NC MD TX % Decrease in Mean/Median Amount of Opioids per Claim 31%/ 20% 29%/ 13% 24%/ 14% 21%/ 5% 0% 20%/ PDMP  Treatment Guidelines Formulary Others Spillover effects of group health limits Regulated pain clinics © Copyright 2017 WCRI. All Rights Reserved.

Thank You! For comments/questions about the findings: Follow WCRI on social media: Carol Telles Senior Analyst ctelles@wcrinet.org Vennela Thumula Policy Analyst vthumula@wcrinet.org © Copyright 2017 WCRI. All Rights Reserved.