UR Nation End of Month Regulatory News Summary

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Louisiana Appellate Court Allows Radio Frequency Ablation to Treat Nerve Injury

The Louisiana Court of Appeal, 3rd Circuit, ruled that an injured worker was entitled to authorization for radio-frequency ablation (RFA) to treat a nerve injury. In the case, Lonnie Harper suffered an on the job injury when he was struck in the face by a large pry bar while working at Boise Paper Holdings. He was knocked unconscious and flown to Lake Charles Medical Center. After doctors diagnosed Harper with occipital neuralgia (chronic pain in the upper neck), he began receiving nerve blocks to address the pain. For long-term pain relief, Harper had a nerve stimulator implanted. But he later developed a severe infection to the nerve stimulator implants, so he had them removed. Shortly thereafter, Dr. Sanjiv Jindia recommended RFA.

RFA is a procedure in which a patient lies on a procedure table and the physician numbs a small area of the skin. The physician then uses x-ray guidance (fluoroscopy) to direct special radiofrequency needles alongside the nerves. Radiofrequency is then introduced to disrupt the nerve’s ability to send pain signals.

The court said that the Louisiana medical director erred in finding that RFA was not governed by the state treatment guidelines.  Although the guidelines don’t expressly statel that RFA is an appropriate treatment for patients with occupational neuralgia, the court said RFA is an accepted procedure under the guidelines for cervical injuries. The court ruled that Harper was entitled to a penalty award of $2,000, $7,500 in attorney’s fees before the Louisiana workers’ compensation administrative law judge, and $2,500 in attorney’s fees for prosecuting the appeal.

New Crop of Generics May Reduce Drug Spending

The FDA has produced a list of 74 first time approved generics for 2017. These include generics for Truvada for preventative treatment of HIV, Lioresal for symptoms of spasticity from MS, plus Viagra, Lotrimin, Tamiflu, Nexium, Strattera and Suprax. For example, the cost of Teva’s generic version of Viagra will sell for around half the cost of Pfizer’s non-generic version. A surprising number of prescriptions are written for Viagra in workers’ comp. This is because one of the many negative side effects of opioids is erectile dysfunction. Another negative side effect is low testosterone levels, so another drug on the first time generic list is Androgel, a topical gel that helps to restore testosterone levels.

The drug that system participants most want to see go generic is Pfizer’s Lyrica. This anti-seizure drug used to treat neuropathic pain ranked first in per-user per-year drug spend in workers’ comp. Lyrica’s patent does not expire until 2018. You may recall that Pfizer received FDA approval in 2017 for an extended release version of Lyrica called Lyrica CR. Phil Walls, chief clinical officer for myMatrixx, had an interesting take. “Launching an extended release version of a drug right before the patient expires is an example of “ever-greening” by the brand company – just guarding their profits and not offering any therapeutic advantage.” Walls is referring to the concept whereby a year before patent expiration drug companies make a “new and improved” formulation. That way, when the patent expires (as will Lyrica) Pfizer can say to doctors “You are prescribing the generic “old version” of Lyrica, which we no longer recommend.”

The FDA approved 73 first time generics in 2016. So the 2017 number is on par with last year and does not represent a significant increase.

Pennsylvania Lawmakers Working to Pass New Formulary Bill SB 936

Lawmakers in Pennsylvania are working to position SB 936 for passage in January.  The formulary bill is similar to the failed HB 18, which is still mired in the House Rules Committee.  It calls for the creation of an evidence based prescription drug formulary and for all UROs to be accredited by January 1, 2020.  In terms of the accreditation, the Dept. of Labor & Industry would be required to approve the accreditation by a “nationally recognized organization” such as URAC.

Another feature is that SB 936 would require the Pennsylvania Compensation Rating Bureau to calculate any savings that result within 18 months of the effective date.  So it appears that the lawmakers believe the formulary will save them money on drug costs, in addition to cutting down on opioid prescriptions.  And Pennsylvania needs some work.  A 2016 WCRI study found that out of 25 states analyzed, Pennsylvania ranked third behind only Louisiana and New York for average number of opioids prescribed for injured workers, and ranked second in number of pills per prescription.

TDI Nearing Completion of Project to Scan 2 Million Claim Files

Texas Dept. of Insurance, Division of Workers’ Comp, is close to finishing a 14 month project to scan 19,634 boxes of records containing over 2 million claim files.  The paper files are from cases with injury dates between 1992 and 2005.  Since 2005 DWC has had an electronic management system and has been keeping digital versions of all paper files.  Files older than 1992 have previously been scanned onto microfilm.  By law, DWC must maintain records for 50 years.

DWC chose Image API as its vendor.  Image API, headquartered in Tallahassee, Florida, was paid $1.9 million for the project.  Image API gained notoriety when it helped IBM convert 1.5 million books and 150,000 manuscripts into digital format for the Vatican.  Part of the project was to enhance image quality, by adjusting contrast, thickening lines, and removing speckles.

DWC said that by scanning all the records into a digital format it has been able to stop renting a 24,000 square foot storage warehouse that costs DWC $300,000 a year to lease.  Genice Mancini, director of records management and support at DWC, said “We’re very excited.  Staff won’t have to climb on top of a tall shelf to look for a claim file.  That creates a safer work environment.  It’s one of the best projects I’ve ever worked on.”  Mancini also said that digitizing its paper claims increases document security and increases efficiencies as all records are in the same location.

TDI Lifts Bulletin Extending Deadlines Due to Hurricane Harvey

You may recall that TDI DWC issued a bulletin, signed by Commissioner Ryan Brannon, that directed insurance carriers and system participants to be more flexible in the wake of Hurricane Harvey.  Insurers and system participants were to extend deadlines for medical examinations, authorize payment for pharmacies to dispense 90-day supplies of medications and expedite change-of-address processing.  TDI DWC also directed carriers to reimburse for emergency and non-emergency health care services out of network.  Deadlines were also suspended for claims notifications and filing, medical billing, medical and income payments, electronic data reporting, and medical and income benefit disputes.  The bulletin affected injured workers in more than 50 counties where Gov. Greg Abbot has issued a disaster proclamation.

However, TDI DWC recently issued another bulletin saying that it was now practical and in the best interests of the Texas workers’ compensation system to resume normal claims processing and dispute resolution operations.  So effective January 10, 2018, the order of the original bulletin will be officially lifted.  All standard workers’ compensation deadlines and procedures will go back into effect.

At the time of the original bulletin we were so impressed by Commissioner Brannon’s clear, common sense rapid response, that we published an article on UR Nation saluting TDI for doing so. TDI’s leadership was strong and decisive, and system participants appreciated it.

New WCIRB Report Shows Generally Positive Trends for Work Comp Insurance Carriers in California

A new Workers’ Compensation Insurance Rating Bureau (WCIRB) report has generally positive news for insurance carriers writing business in California. The first is that projected 2017 written premium is expected to decline about 4%, but for a good reason. That’s because the cost of workers’ compensation insurance has declined to $2.47 per $100 of payroll, which is good news. This is down from $2.73 in 2016, and $2.97 in 2014. Ultimately this is great news for California businesses looking to hire more employees.

While allocated loss adjustment expenses (the cost to investigate and adjust a claim) continue to slightly increase, insurers continue to enjoy favorable combined ratios (the combined ratio is the measure of profitability – anything below 100% means the carrier is usually making money).  For 2016 the combined ratio was 94%, compared with 99% for 2015, and 104% for 2014.

As a long term trend we at UR Nation would not be surprised to see more insurance carriers seeking to write more business in California.

Tom Swiatek

Tom Swiatek

As Assistant Vice President of Regulatory Services, General Counsel, and Editor in Chief of UR Nation, Tom Swiatek draws on his experience as an insurance attorney on both the general liability side, as well as on workers’ compensation matters. As a California Workers’ Compensation Section Member, Tom is leading the discussion with respect to the regulatory challenges and opportunities facing the workers’ compensation system.