Third-Party Payer Track:Legislative and Medication Trends

Impacting Third-Party Payers

Presenters:• Brian Allen, Vice President of Government Affairs, Helios• Tron Emptage, RPh, Chief Clinical Officer, Helios

Moderator: Michelle C. Landers, JD, Executive Vice President and General Counsel, Kentucky Employers’ Mutual Insurance, and Member, Rx Summit National Advisory Board

Disclosures

• Brian Allen, Employment: Helios• Tron Emptage, RPh, Employment/Stockholder: Helios• Michelle C. Landers, JD, has disclosed no relevant, real or

apparent personal or professional financial relationships with proprietary entities that produce health care goods and services.

Disclosures

• All planners/managers hereby state that they or their spouse/life partner do not have any financial relationships or relationships to products or devices with any commercial interest related to the content of this activity of any amount during the past 12 months.

• The following planners/managers have the following to disclose:– Kelly Clark – Employment: Publicis Touchpoint Solutions;

Consultant: Grunenthal US– Robert DuPont – Employment: Bensinger, DuPont & Associates-

Prescription Drug Research Center– Carla Saunders – Speaker’s bureau: Abbott Nutrition

Learning Objectives

1. Identify legislative and regulatory issues relevant to third-party payers.

2. Explain strategies for third-party payers to influence legislative and regulatory outcomes.

3. Outline medication cost and utilization trends relevant to third-party payers so that the injured worker receives the right medication at the right time in a cost-effective manner.

Legislative and Medication Trends Impacting Third-Party Payers

Brian Allen, CICVice President of Government Affairs

Tron Emptage, M.A., R.Ph.Chief Clinical Officer

April 7, 2015 12:30 - 1:45 P.M.

Disclosure Statement

• Brian Allen, Employment: Helios• Tron Emptage, RPh, Employment/Stockholder: Helios

Legislative and Medication Trends Impacting Third-Party Payers

• Physician Dispensing and Repackaged Medications

• Opioid Utilization

• Guidelines and Closed Formularies

• Compounded Medications

• Medical Marijuana

PHYSICIAN DISPENSING AND REPACKAGED MEDICATIONS

Source: Journal of Occupational and Environmental Medicine, Volume 56, Number 5, May 2014, Effect of Physician-Dispensed Medication on Workers’ Compensation Claim Outcomes in the State of Illinois, White, et al.

Illinois Study

Claims with at least one physician-dispensed medication

Claims with a physician-dispensed opioid within 90 days

Physician Dispensed vs. Pharmacy Dispensed

WA

OR

CA

NV

ID

MT

WY

COUT

NMAZ

TX

OK

KS

NE

SD

ND MN

WI

IL

IA

MO

AR

LA

AL

TN

MIPA

NY

VT

GA

FL

MS

KY

SC

NC

MDOH DEIN WV

NJCT

MA

ME

RI

VA

NH

AK

DC

HI

Workers' compensation statutes/regulations limit physician dispensing and/or repackaging (Restrictions on dispensing, billing and/or reimbursement)

No clear legal or workers' compensation limits on physician dispensing and/or repackaging

Legal restrictions (Practice Act) in addition to workers’ compensation controls

Legal restrictions on physician dispensing (Medical/Pharmacy Practice Act restrictions)

Note – States such as AR, DE, FL, KY, NY and TN have overlapping workers’ compensation and state Practice Act controls

Data – Reflects published state statutes/regulations/case law on Physician Dispensing/Repackaging

Current as of Jan 2015

Twenty-two States have taken Policy Action since 2011

WA*

OR*

CA

NV

ID

MT

WY

CO*UT

NM*AZ

TX

OK*

KS

NE

SD

ND MN

WI

IL*

IA

MO

AR*

LA

AL

TN*

MI*PA*

NY*

VT

GA

FL*

MS

KY*

SC

NC*

MDOH* DE*IN* WV

NJCT*

MA

ME

RI*

VA

NH

AK*

DC

HI

Mandates use of original NDC for billing and/or reimbursement

No mandate for use of original NDC for billing/reimbursement

* Additional regulatory/statutory factors and qualifications may apply

Data – Reflects published statutes/regulations/case law on usage of Underlying NDC for repackaged drugs

Current as of Jan 2015

Use of Original NDC for Repackaged Drugs

Outcomes

• Cost of repackaged medications – Generally see an immediate decrease in cost following implementation of controls

– WCRI reports in Tennessee that prices dropped 21-49% in the first quarter post-reform*

– Data indicates impact erodes over time as market adjusts

– Costs still higher than pharmacy - lack of network pricing

– Physicians are adopting new drug formulations as soon as they are available to take advantage of higher prices

• Volume of physician-dispensed medications – In price-control-only states volume remains relatively flat

– States limiting physician dispensing time frames initially see a decrease in volume, but then volume grows in time

*Early Impact of Tennessee Reforms on Physician Dispensing, December 2014

What is the right strategy for rationalizing physician dispensing and cost?

• Outright ban on physician dispensing?

– Fighting scope of practice issues

– Would solve problem

• Strict limits on time-frames physicians can dispense?

– Fighting scope of practice issues

– Would reduce problem

• Regulating reimbursement by average cost per gram of all strengths?

– Difficult to obtain data and reprogram bill review and reimbursement system

– Would rationalize cost

• Only allow physician dispensing within a pharmacy network?

– Difficult to contract with physicians

– Could contract reimbursement at levels similar to pharmacies

OPIOID UTILIZATION

Opioid Analgesics Continue to Plague the U.S.

• Centers for Disease Control reports 16,235 deaths from opioid analgesics in 2013

• This is up slightly from 2012, but still less than the high of 16,917 in 2011

• Still considered epidemic levels

• Heroin use is on a steady rise

Multiple Controls Impact Opioid Utilization

• Results suggest that multiple controls need to work in concert to have an impact in reducing use of opioid analgesics

• Pharmacy Benefit Managers are realizing success reducing the use of opioid analgesics

Network Enforcement Clinical Tools Predictive Analytics Models Drug Testing

Legislative and Regulatory Strategies for Controlling the use of Opioid Analgesics

• Medication Rescheduling

– Designed to slow/inhibit prescribing

– Effective October 6,2014, all hydrocodone combination products (HCPs) have been reclassified from CIII medications to CII medications. At a Federal level, this will

• prohibit oral prescriptions (unless reduced immediately to writing)• prohibit refills• limit the quantity (days’ supply) to 90 days (some states will restrict to 30 days), and• require new Rx for each treatment

• Prescribing guidelines/restrictions

– Targets physician behavior

– Time-based restriction

– Monthly MED limits

Legislative and Regulatory Strategies for Controlling the use of Opioid Analgesics

• Mandatory Urine Drug Monitoring

– As many as 75% of claimants with chronic pain may not be taking their medications as prescribed

– According to the American Pain Society and the American Academy of Pain Medicine, claimants receiving chronic opioid therapy should be monitored periodically for prescription compliance through routine assessment including urine drug testing

– Another important factor is the differentiation between office based immunoassay dip stick tests, and laboratory driven liquid or gas chromatography. There are thousands of web sites, blogs, and advice on “how to beat a urine drug test” for those immunoassay based tests.

Legislative and Regulatory Strategies for Controlling the use of Opioid Analgesics

• Prescription Drug Monitoring Programs (PDMPs) intended to:

– Support access to legitimate medical use of controlled substances

– Identify, deter or prevent drug abuse and diversion

– Facilitate and encourage the identification, intervention with, and treatment of, persons addicted to prescription medications

– Inform public health initiatives through outlining of use and abuse trends

– Often understaffed and underfunded in state budgets – California and Florida

– Needs better interaction across borders and include PBMs

– Delaware and New Jersey just implemented a sharing pact

Legislative and Regulatory Strategies for Controlling the use of Opioid Analgesics

Prescription Drug Monitoring Programs (PDMPs)State by State

WA

OR

CA

NV

ID

MT

WY

COUT

NMAZ

TX

OK

KS

NE

SD

ND MN

WI

IL

IA

MO

AR

LA

AL

TN

MIPA

NY

VT

GA

FL

MS

KY

SC

NC

MDOH DEIN WV

NJCT

MA

ME

RI

VA

NH

AK

DC

HI

Operational PDMP (Prescription Drug Monitoring Program)

Enacted Legislation, but PDMP not yet operational

No PDMP

Data – Reflects published state statutes/regulations on PDMP Operations

Current as of Sept 2014

PDMP: Access to Information

WA

OR

CA

NV

ID

MT

WY

COUT

NMAZ

TX

OK

KS

NE

SD

ND MN

WI

IL

IA

AR

LA

AL

TN

MI2

PA

NY

VT

GA

FL

MS

KY

SC

NC1

MDOH DEIN WV

NJCT

ME

RI

VA

NH

AK

DC

HI

MO

To prescribers, pharmacists, law enforcement and licensing entities (19)

To prescribers, pharmacists and law enforcement only (4)

To prescribers, pharmacists and licensing entities only (2) 1 North Carolina provides unsolicited reports to the

Attorney General who has the discretion to forward the information to law enforcement.

2 Michigan sends alerts to physicians when a patient surpasses the threshold but does not send the actual report.

To prescribers and pharmacists only (5)

To law enforcement and licensing entities only (3)

To prescribers only (3)

To prescribers and law enforcement only (1)

Law enforcement only (2)

Licensing entities only (2)

Practitioners and licensing entities only (1)

MA

• Closed Formularies

– Seem to be having a real impact

Legislative and Regulatory Strategies for Controlling the use of Opioid Analgesics

TREATMENT GUIDELINES AND CLOSED FORMULARIES

The Texas Experience

• Adopted Official Disability Guidelines (ODG) Appendix A as the basis of formulary

• Formulary includes all Food and Drug Administration (FDA) approved medications except “N” drugs on Appendix A

– “N” drugs require preauthorization

– All other drugs can only be reviewed retrospectively

• Latest results from Texas show a reduction of “N” drugs in cost and quantity

– 65% reduction in claims receiving an “N” drugs

– 82% reduction in cost

Positive Results: Texas Closed Formulary

0-90 91-180 181-270 271-360 $-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

0

500

1000

1500

2000

2500

3000

3500

4000

$164

$355

$409

$457

$152

$235

$318

$421

2909

442302 241

3687

479

281 250

Days Post Injury

Avera

ge S

pend p

er

Cla

imant

per

Quart

er

Count

of

Cla

imants

Receiv

ing P

rescri

pti

ons p

er

Quart

er

Lessons Learned from Texas

Lessons Learned from Texas

• A state-mandated list of drugs requiring preauthorization did change prescribing behavior

• Allowing only retrospective review on all other drugs had some unintended consequences

– Increase in medications being processed that were not related to the workplace injury

– Increase in medications being prescribed outside of treatment guidelines and not indicated for injury

– Significant increase in compounds with all “Y” ingredients

Closed Formulary

• Pharmacy benefit managers (PBMs) can play a valuable role

– Ensuring compliance with “N” drug lists,

– Encouraging the use of generics,

– Blocking high-cost compounded medications, and in

– Making sure that all of the other medications prescribed are appropriate for the injured worker based on their injury and their point of recovery

• States adopting a closed formulary approach can maximize their results by maintaining a strong role for PBMs in managing medication utilization in their workers’ compensation systems

PDL List

► “Preferred” and “non-preferred” medications

► Proof of non-preferred medication usage and written justification (state format) for all preferred medications

Prior written authorization

OxyContin®, Oxycodone ER, Actiq® and transmucosal Fentanyl

New Guidelines/Formulary Activity

Non-Acute Pain Treatment Guidelines

► Assist doctors in treating non-acute pain with both opioids and non-opioids

► Requires greater communication between provider and patient

► Includes treatment agreements and documentation

Closed Formulary

► Implemented a Closed Formulary

►Requires prior-authorization on all medications indicated as “N” by ODG

►Requires prior-authorization for all compounds

► Implemented in 2014 – Eventual data and results will be telling

Delaware New York Oklahoma

States Considering Treatment Guidelines and/or Closed Formularies

• Treatment Guidelines− Arizona Moving slowly with pain treatment guidelines

− Arkansas Rule change underway to adopt ODG; Proposed rule being reviewed by Governor’s Office

− California Opioid Treatment Guidelines

− Michigan Released proposed rule on compounded medications and opioid utilization; impose limits on prescribing opioids unless physician meets strict criteria

− New York Continuing to refine their treatment guidelines

− Tennessee Medical Advisory Committee studying options

• Closed Formularies− Arkansas Closed Formulary Rule based on ODG “N” drug list currently being reviewed by Governor’s office

− California California Workers’ Compensation Institute (CWCI) study showed savings of up to $450 million a year. DWC has been talking to stakeholders. Legislation has been introduced in the CA

Assembly

− Louisiana Legislation introduced but not passed in 2014; likely rulemaking in 2015

− Oklahoma Working to finalize and adopt permanent rules solidifying their closed formulary

− Tennessee Medical Advisory Committee discussed closed formulary during Dec 10th meeting

− Michigan Administrator has been doing fact-finding on the closed formulary concept

COMPOUNDED MEDICATIONS

Compounded Medications

• It is the art and science of preparing personalized medications for patients where individual ingredients are mixed together in the exact strength and dosage form to meet the patient’s specific needs

• A prescription is required for these medications. The active ingredients in compounded medications are usually prescription medications combined together

• The compound products themselves are not FDA approved; however, the individual ingredients typically are

• Largely experimental in use with few randomized controlled trials to determine efficacy or safety

• Not commercially available and typically much more expensive than their oral formulation counterparts

Topical Compounded Medications

• Considered second or third line treatments; primarily recommended for neuropathic pain when trials of antidepressants and anticonvulsants have failed or when an injured worker is allergic to certain inactive ingredients

• Outside of workers’ compensation, compounded medications are most often used for hormone replacement, dermatology, children’s formulations, and anti-cancer treatment

• Recommendations Prior to Approving

− Confirm medical necessity

− Consider comorbid conditions that might prevent oral therapy

− Determine if first line oral agents are unavailable

− Does the claimant have documented allergy to commercially available product

− Compare individual compound ingredients to current oral medications to prevent duplicate therapy

− Consider escalating to internal resources (field case manager)

− Consult a pharmacist

States Addressing Compounded Medications

• Delaware

– Compounded medications must be billed listing each ingredient and its corresponding NDC

– Reimbursement based on each NDC using the standard pharmacy fee schedule

– A single $10 compounding fee per prescription is allowed for physician dispensers

• Ohio

– Regulations establish reimbursement for non-sterile compounded medications to be limited to the lesser of the usual and customary price or the AWP of the commonly stocked package size minus 9% for each ingredient

– Maximum reimbursement for any one compound prescription is $600

States Addressing Compounded Medications

• Oklahoma

– New formulary excludes compounded medications

• Mississippi

– Limited maximum total reimbursement for each compounded cream medications to $300 for no more than 120 grams per month

– Any additional quantity requires further documentation and prior authorization

States Addressing Compounded Medications

• Wyoming– Amended treatment guidelines stating that there is no evidence that compounds are more

effective than individual ingredients administered separately– Provider must document medical necessity and that traditional therapy was tried but failed – Compound will be denied absent documentation

• Michigan– Must demonstrate medical necessity– No readily available commercial alternative– Ingredient reimbursement based AWP of original product used– Total reimbursement for topicals capped at $600

MEDICAL MARIJUANA

Legal in 23 states and Washington D.C.

WA

OR

CA

NV

ID

MT

WY

CO

UT

NMAZ

TX

OK

KS

NE

SD

ND MN

WI

ILIA

MO

AR

LA

AL

TN

MIPA

NY

VT

GA

FL

MS

KY

SC

NC

MDOHDE

INWV

NJCT

MA

ME

RI

VA

NH

AK

DC

HI

Legalized Medical Marijuana

Current as of January 2015 Source: ProCon.org

Considered legislation to legalize medical marijuana in 2014

Pro-medical use legislation, short of legalization

Medical use of marijuana is prohibited; no pending legislation

Medical Uses and Dosage Forms

• HIV induced cachexia

• Cancer related nausea/vomiting

• Glaucoma

• Severe chronic pain

• Epilepsy

• Multiple Sclerosis

• Inflammatory bowel disease

Medical Uses Dosage Forms

• Smoking

• Vaporization

• Sublingual

• Liquid

• Spray

Employer Considerations

• Employer challenges include

– A heightened level of concern when an injured worker returns to a safety-sensitive occupation, such as driving or construction, while subject to the potential adverse cognitive and psychological effects of marijuana

– Quantification of the amount of marijuana consumed by the injured worker is not available through urine drug testing, thereby limiting the ability to determine if he or she has consumed the prescribed dose, or is in fact acutely intoxicated

– Understanding the potential impact to Drug Free Workplace policies as well as other safety and risk management protocols and programs

• Based on the best available scientific evidence and recommendations at this time, its classification as a Class I substance and the lack of an assigned NDC, medical marijuana remains excluded from our Medication Plans/formularies

Legislative Update

• Utah heard legislation that would allow medical marijuana in pill form

• New Mexico courts have ruled that workers’ compensation carriers must pay for medical marijuana if the treating physician deems it medically necessary.

• At the federal level, the DEA has formally requested the FDA to study whether or not marijuana should be changed from a Schedule I to a Schedule II drug

– This would open the way for broader/more accepted use in medical treatment

– Comes on the heels of Congress voting to de-fund DEA marijuana enforcement

THANK YOUQuestions?

Third-Party Payer Track:Legislative and Medication Trends

Impacting Third-Party Payers

Presenters:• Brian Allen, Vice President of Government Affairs, Helios• Tron Emptage, RPh, Chief Clinical Officer, Helios

Moderator: Michelle C. Landers, JD, Executive Vice President and General Counsel, Kentucky Employers’ Mutual Insurance, and Member, Rx Summit National Advisory Board