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Adding Insult to Injury: Financial Impact of Prescription Pills on Workers’ Compensation Payouts

Prescription pill abuse has become so widespread across the United States that the Centers for Disease Control and Prevention recently declared that it is an epidemic. Over the course of a single year (2013), over 16,000 people died from opioid-based painkillers. Opioids are a class of medication that acts on the nervous system to relieve pain by producing sedation and pain relief, but are also highly addictive. There has been a huge push among government agencies across the country to work together to bring awareness to this issue and help those who are facing addiction. Currently, the majority of the focus of prescription drug abuse is on adolescents because of the widespread use among this group.

 

While that population is important to focus on, there is another group that usually flies under the radar – injured workers. In Pennsylvania, there are on average 1,000 new workers’ compensation claims accepted in the state each year. Many of these injured workers are prescribed prescription painkillers to help treat their injuries. Although painkillers can be helpful in alleviating day-to-day pain, the negative effects of this daily use is that injured workers often turn into long-term users of opioids.

 

A recent study by the Workers’ Compensation Research Institute helped to put this epidemic in context when focused specifically on injured workers. Opioids are the most commonly prescribed pain medications amongst injured workers. In Pennsylvania 11% of workers’ compensation claims not involving any surgical procedures were identified as long-term users of opioids. Typically, 80% of injured workers are treated with prescription painkillers; and, a large number of these workers are found to still be using the painkillers six to 12 months later.

 

Breaking the Budget

To add insult to injury, not only are injured workers developing prescription pill addictions, but this is also causing a huge increase to the financial burden carried by the workers’ compensation program, an already $3.3 billion annual burden. A large part of this financial burden can be attributed to a commonly used practice of physician-dispensed medication. Physicians would typically buy medication in bulk and then repackage into smaller quantities to sell to patients. As part of the repacking process, the price of the medication would be substantially increased. For example, one pill of Carisoprodol[1] dispensed from a pharmacy cost the state $0.51, while a one pill dispensed from a physician would cost $4.31 – a 742% price increase. This practice cost Pennsylvania millions more in payouts on workers’ compensation claims.

 

At the tail end of 2014, Pennsylvania enacted a bill that that limited the amount a physician could be reimbursed for the dispensed medication to 110% of the wholesale cost, among other safeguards to ensure the physician’s markup was removed from the equation and the reimbursement amount was based on the cost from the original manufacturer. In 2017, the law requires that Pennsylvania implement an annual report of the savings reduction as a result of this bill. The intent is to be able to provide lower rates to pass on to employers for savings on their policies.

 

If you have been injured from a work-related accident, it is important to contact an attorney experienced with workers’ compensation matters for guidance on the best way to handle your claim and expenses.

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