1. MANAGING PHARMACEUTICAL PROJECTIONS IN THE Medicare set-aside
Jennifer Shymanski, JD, CMSP and Robert L Sagrillo, JD, LLM
P.O. Box • Longwood, FL • P • F • mynuquest.com

2. “Managing Opioids”
When we talk about managing pharmaceuticals projections in the Medicare set-aside, we are really talking about “managing opioids.”
A recent study by the California Workers’ Compensation Institute looked at the mean and median values for the number of doses per day, the potency (MEDs) and the duration of opioid projections in WCMSAs. Among the WCMSAs with opioids, injured workers were approved for an average of nearly 3 doses of opioids per day, comprising 54.7 MEDs per day, for an average of 20.9 years.
Almost 70% of all WCMSAs include opioids. Account for 28% of al prescription drugs and 33% of the allocated cost of drugs in the WCMSA.

3. Opioid Epidemic

4. Other Contributing Factors to High Rx Costs in MSAs
Physician Dispensed Drugs
Average paid medical benefits for claims with at least one physician-dispensed repackaged drug were almost 17% higher than claims without.
Drugs dispensed by physicians cost % more than those dispensed by retail pharmacy.
Between 2003 and 2013 cost of physician dispensing per claim tripled from $19 to $60.
Increased risk to workers who have more than one doctor.
Compounded Medications
Price inflation of individual ingredients, e.g. common
anti-inflammatory was $770 vs. $46 for alternative.
Cost per prescription for compounded drugs is four times higher than any other therapy class.

5. CMS and WCMSAs
Part D (Medicare covered prescription drugs) share of CMS approved MSAs is approx % of total MSA allocation.
Average prescription drug cost is more than $48,000.
For largest CMS approved MSAs (over $200,000), Part D is more than 60% of total MSA.
Opioids account for 28% of all prescription drugs and 33% of all prescription drug allocations (California Workers’ Compensation Inst.).

6. WCMSA Reference Guide - Submission
Pharmacy ledger for past two years
Prescription drug and medical treatment payment records/histories dated within 6 months of the date of submission
For pharmacy records, the WCRC prefers the following:
First, the prescription claim records directly from the WC insurer. This gives a record of exactly what drugs have been used for the work injury. This might come on such a form as the National Council for Prescription Drug Programs (NCPDP) Workers’ Compensation/Property and Casualty Claims Form. Many state WC programs use these forms to document drug payments.
Pharmacy Benefit Manager prescription claim records or third party administrator (TPA) pharmacy records provide a good sense of the totality of drug usage, especially if the claimant goes to multiple pharmacies.
Individual pharmacy claim records are beneficial, but the WCRC is aware that claimants could go to multiple pharmacies. If at any time in the process the WCRC cannot compile an accurate picture of the claimant’s drug needs, they will develop for further records.

7. WCMSA Reference Guide Prescription Drug Review
WCRC reviewer verifies that the prescription drugs included are for the direct treatment of the work injury or injuries by reviewing the submitted clinical documentation.
Validate that prescription drugs ordered and taken in the past two years were directly for treatment of the injuries.
Determine if the drug products would be covered under the Part D benefit. This includes assessment of medically-accepted indications (drug usage), drug dosage, and drug frequency.
Determine if the claimant is taking brand or generic drug products.
Price all drug products using AWP, with generic drugs being priced at the lowest non-repackaged generic AWP.
Prescription drug and medical treatment payment records/histories dated within 6 months of the date of submission
Both medical and pharmacy records are used to compile a claimant’s drug list

8. WCMSA Reference Guide - Pricing
WCRC continues to price Part D drug products based on AWP and further based on brand or generic drug pricing.
AWP pricing is pulled from a proprietary source, Truven Health Analytics’ Red Book database.
The WCRC uses a program for drug pricing that uses Red Book flat files that are updated monthly.
For generic drugs, the WCRC uses the lowest non-repackaged generic drug AWP.

9. WCMSA Reference Guide – Brand vs Generic
WCRC prices for generic drugs unless one of the following applies, in which case the WCRC uses brand-name:
A brand-name drug is in the proposal and there is an indication that the claimant is actually taking the brand-name drug.
A generic is in the proposal, but no generic exists.
A generic is in the proposal, but all the evidence indicates that the claimant is taking the brand-name drug.
The claimant or claimant’s attorney insists on a brand-name drug in writing.
No drugs are indicated in the submitted proposal, but the condition requires certain drugs, or the medical records indicate certain drugs. In this case, the WCRC will default to pricing for brand-name medications.

10. WCMSA Reference Guide – Pharmacy Guidelines
Off-label drugs
Compounded drugs
PRN or As-Needed Drugs
Physician-Dispensed Drugs
Drug Weaning/Tapering
Off-label use is when a drug is prescribed in a manner that is different from the FDA-approved product labeling. FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the carrier determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.
Only costs associated with those components that satisfy the definition of a Part D drug are allowable costs under Part D because the compounded products as a whole do not satisfy the definition of a Part D drug.

11. WCMSA Reference Guide – Reality Check
Daily Dosage X
30 days per month
12 months per year
Average Wholesale Price
Life Expectancy
_____________________________
= Total Prescription Drug Cost in WCMSA

12. So how do we manage pharmaceutical projections in MSAs?
Medical management
IMR, AME, QME, etc.
Court orders
Treating physicians
State programs
Evidence-based medicine

13. Medical Management Mail order programs Brand vs Generic
State guidelines
Utilization management/review
Treatment/therapeutic alternatives

14. Utilization Review
Binding
Implementation
Appeals

15. Court Orders
Hearing on the merits
Demonstration of implementation

16. Treating Physicians Target physician dispensed repackaged drugs
Clarification of brand vs generic
Guidance regarding PRN usage
Opioids

17. State Programs to Combat Abuse
Arizona
California
Florida
Michigan
Texas
Washington

18. CMS Acceptance of Rx Management?
State-legislated, non-compensable medical services
CMS will recognize WC state-specific statutes addressing the limits of future treatment regarding the length or nature of future treatment, provided that the submitter has demonstrated that Medicare’s interests have been adequately protected.
Submitters requesting alteration to pricing based upon state-legislated time limits must be able to show by finding from a court of competent jurisdiction or appropriate state entity as assigned by law that the specific WCMSA proposal does not meet the state’s list of exemptions to the legislative mandate.
For those states where treatment is varied by some type of state-authorized utilization review board, the submitter shall include the alternative treatment plan showing what treatment has replaced the treatment in question from the beneficiary’s treating physician for those items deemed unnecessary by the utilization review board.
Failure to include these items initially will result in pricing at the full life expectancy of the beneficiary, or the original value of treatment without regard to the state utilization review board recommendation.

19. Non Submission No Law Requires an MSA Statute Regulation Memos
Tool to Avoid Burden Shift
Mid 1990’s, multimillion dollar catastrophic claims
2001 CMS memo changed landscape
Changing climate
Increased MSA amounts
Increased time
No assurances, CMS unpredictable

20. Types of MSAs
Commutation: Fully funds future injury-related Medicare-covered treatment
Compromise: Apportions the future medical in a net settlement based on the relative value of the various damage elements asserted in the claim.
Partial Waiver: Fully funds the future injury-related Medicare-covered treatment for the accepted conditions and seeks a waiver from CMS for the denied conditions.
Zero Dollar MSA / Total Waiver
Nuisance Value
Evidence-Based Medicine, Standards of Care MSA

21. Evidence-Based Medicine and Evidence-Based Prescribing
Evidence-based medicine is the integration of research-based evidence, clinical expertise and patient values.
“The conscientious, explicit, and judicious use of current best evidence in making decisions about the care of individual patients.”
The provider needs to consider (1) efficacy, (2) safety and (3) cost.
So what is evidence based medicine and how does it apply in prescription of pharmaceuticals?

22. Evidence-Based Prescribing - MSAs
The past 2 years of documentation is reviewed to determine the future drug regimen.
If brand is being dispensed per the ledger, brand is allocated otherwise generic drugs are allocated.
Drugs are priced at AWP with generic drugs being priced at the lowest non-repackaged AWP. Repackaged drugs are not considered, however, may use other pricing.
Refill frequency, quantity dispensed, and PRN drugs are taken into consideration and allocated per documented utilization.
Non-covered Part D drugs are not included in the allocation.
Resources
The following resources are used when allocating Part D drugs using Evidence Based Medicine:
• FDA Approved Drug Products – for approved label use
• DailyMed website for drug listings; this resource provides FDA label information as well as information on the drug category (OTC or Rx only), NDC code, and DEA schedule.
• CDC website – Guidelines for Prescribing Opioids for Chronic Pain
• Pharmacy off-label drug reviews – if a drug is prescribed for a use other than the FDA approved label use; a drug review is completed by our pharmacist to determine if the off-label use is supported by the recognized drug compendia

23. Allocating Part D Drugs
Part D drugs are allocated based on the above factors taking into consideration the following which will likely decrease drug utilization over life:
Co-morbid conditions
Improvement in condition with other interventions
Drugs being discontinued or changed over time as they become less effective
Potential adverse effects due to aging and long-term use
Resources
The following resources are used when allocating Part D drugs using Evidence Based Medicine:
• FDA Approved Drug Products – for approved label use
• DailyMed website for drug listings; this resource provides FDA label information as well as information on the drug category (OTC or Rx only), NDC code, and DEA schedule.
• CDC website – Guidelines for Prescribing Opioids for Chronic Pain
• Pharmacy off-label drug reviews – if a drug is prescribed for a use other than the FDA approved label use; a drug review is completed by our pharmacist to determine if the off-label use is supported by the recognized drug compendia

24. EBM Resources
The following resources are used when allocating Part D drugs using Evidence Based Medicine:
FDA Approved Drug Products – for approved label use
DailyMed website for drug listings; this resource provides FDA label information as well as information on the drug category (OTC or Rx only), NDC code, and DEA schedule.
CDC website – Guidelines for Prescribing Opioids for Chronic Pain
Pharmacy off-label drug reviews – if a drug is prescribed for a use other than the FDA approved label use; a drug review is completed by our pharmacist to determine if the off-label use is supported by the recognized drug compendia.

25. Questions?