Recent Study Links Opioid Use to Escalation in Overall Claim Cost

September 23, 2012

Opioid cause of escalation in claim cost
Opioid cause of escalation in claim cost
The over-prescribing of opioids and subsequent problems of addiction, overdose and even death is a public health crisis that has dramatically impacted workers’ compensation. A startling 55 to 85 percent of injured workers receive narcotics for chronic pain.

A recent study by Accident Fund Holdings and Johns Hopkins University examined the interrelationship between the utilization of short- and long-acting opioid medications and the likelihood of claim cost escalating to a catastrophic level (> $100,000). Analyzing 12,000 workers’ compensation claims in Michigan during a four-year period, the study focused on whether the presence of opioids alone accounted for the cost increase or whether costs increased because opioids were associated with known cost-drivers, such as legal involvement and injury severity.

Controlling for factors of sex, age, time lost from work, number of distinct ICD-9 codes per claims and legal involvement, results showed that opioid use – particularly of long-acting (LA) opioids – was an independent predictor of catastrophic claims costs.  Key findings:

  • The presence of LA opioids makes claims almost 3.9 times more likely to have a final cost of >$100,000 than a claim without any prescriptions.
  • Claims with only short acting (SA) opioids were 1.76 times more likely to have an ultimate claims cost of >$100,000.
  • Claims with non-opioid prescriptions showed no significant risk of exceeding $100,000 int total claim cost.

When assessing the price of opioid medication as it related to total medical and overall claim cost, the study found that the price of the drug itself was a minor contributor to the overall medical or total claims cost. SA opioids represented 0.3 percent of overall medical cost and 0.1 percent of overall claim cost, while LA opioids were approximately 3 percent of medical and 1.2 percent of total claim cost.

Strategies to Mitigate the Impact of Opioids

In the context of such clear and objective evidence that the use of opioid medications, particularly long-acting opioid medications, is an independent risk factor for the development of catastrophic claims, how do we now view the costs associated with proactively addressing addiction issues? Are cognitive behavioral and rehabilitation programs more reasonable strategies in light of these findings? How do we mitigate cost, facilitate settlement and provide better care?

The study’s findings reinforced Accident Fund’s decision to increase medical management on claims with opioids. “Our strategy consists of three elements: early detection, intervention and escalation,” said Jeffrey Austin White, MS, the study’s lead researcher and Accident Fund Holdings’ Director of Medical Management Practices and Strategy. “Leveraging technology solutions to identify opioid risk factors as soon as possible, establishing peer-to-peer intervention strategies based on case-specific needs and escalating internal workflows when specific triggers are met have improved patient outcomes and reduced costs.”

Applying Lessons Learned to Pre-Settlement Workflow

We at Tower MSA Partners applaud Accident Fund’s pro-active, enterprise-level approach to address opioid overutilization and applaud its success. We also recognize that the industry needs state-level pain guidelines. “Statutory support would provide a more comprehensive and general solution for managing opioid claims, until then, every opioid claim seems to require an individual approach with no guarantees,” White added.

Until states provide leadership through regulatory reform, what can payers do? While pain management is necessary, the abuse of opioids can cause hazardous, life-threatening side effects — for which payers may be held responsible.

PBM reports that identify chronic opioid use are available. Yet how do we get the appropriate information into the hands of those who can – and will – act on it? What is the appropriate action to take for each claimant? Are there jurisdictional requirements to meet when intervention is warranted? When (and by whom) should contact be made to the treating physician? How do we get treating physicians to modify drug therapy? Who follows through to verify that the drug regimen actually changes?

These are questions Tower MSA Partners addresses daily as part of its Pre-MSA Settlement Services. We work with clients to “stage” claims for settlement as early as possible. We define intervention triggers, initiate peer-to-peer contact with the treating physician when triggers are met, and obtain written agreement when treatment changes are approved. Most importantly, we stay involved to make certain positive outcomes are achieved. For information on the Accident Fund/Johns Hopkins study, “The Effects of Opioid Use on Workers’ Compensation Claim Cost in the State of Michigan,” please go to (subscription required.) For more information on Tower MSA Partners’ Pre-MSA Settlement Services, contact us at