UR Nation End of Month Regulatory News Summary

| | Utilization Review

George Parisotto Made CA DWC Administrative Director

For many years Destie Overpeck served as Administrative Director (AD) at the California Department of Industrial Relations, Division of Workers’ Compensation (DWC). But in 2016 she abruptly resigned and went to work for the State Bar of California. Attorney George Parisotto was immediately made “acting Administrative Director.” Most system participants believe George Parisotto has done a good job. As a result, the CA Rules Committee unanimously voted to approve George Parisotto as AD. The AD position is a powerful position at CA DWC, with broad powers to affect the rule-making process and resolve complaints brought by injured workers about the system.

As part of the confirmation process, Parisotto was asked about the state of California workers’ comp. He said that SB 863 increased permanent disability benefits by 30 percent while cutting system costs by expediting treatment dispute resolution through the independent medical review (IMR) program. He also said AB 1244 allowed DWC to suspend providers convicted of crimes, including health care fraud, which removed many bad apples from the system. He also said that SB 1160, which would require utilization review organizations to obtain URAC accreditation, would ensure the same standards are being used in claims shops throughout the state.

CMS Released Guidance to States on How to Combat the Opioid Crisis

The Centers for Medicare and Medicaid Services (CMS) released guidance to individual states to help them combat the opioid crisis. The guidance focused on information related to covering services for infants born exposed to opioids, and a bulletin to state Medicaid Directors titled “Leveraging Medicaid Technology to Address the Opioid Crisis.” The bulletin encourages the use of prescription drug monitoring programs (PDMPs), advanced public health data analytics, increased access to substance abuse disorder treatment, and enhanced interoperability and linking of care coordination platforms.

Kentucky HB 2 Committee Now Working on Formulary and Other Rules for Dec. 31 2018 Deadline

Three months after the Kentucky Legislature passed HB 2 an 8-member committee headed by the commissioner of the Kentucky Department of Workers’ Compensation is working to create rules by the December 31, 2018 deadline. HB 2 requires that the rules be adopted by December 31, with an implementation date to be set by the commissioner in 2019 (most system participants think it will be in early 2019).

The committee is working on rules for a formulary, prescribing guidelines, and rules regarding permanent partial disability benefits. The committee will be working with a medical advisory committee, which is made up of doctors and pharmacists.

For those interested in diving deeper, the committee produced minutes from their June 19 meeting in Frankfort Kentucky.

Massachusetts Opioid Only Formulary Goes to House Ways and Means Committee

HB 4470 would place a limit on opioid prescriptions to injured workers (acting as an “opioid only formulary”). It has now passed a conference committee and heads to the Massachusetts House Ways and Means Committee. HB 4470 is seen as a compromise to Governor Charlie Baker’s plan to create a formulary for all medications. The measure incorporates elements of several bills that have been introduced in the last 18 months, which were all designed to combat opioid abuse. HB 4470, created by the Joint Committee on Mental Health, also expands the formulary commission from 16 to 21 members.

Keep in mind the Massachusetts Legislature is in session until July 31. So they need to move this along in an expedited manner in order to present something to Gov. Baker for signature.

Nektar Therapeutics Seeks FDA Approval for New Reduced Euphoria Opioid for Low Back Pain

Nektar Therapeutics announced that they are seeking FDA approval of a new opioid for low back pain that provides pain relief without producing the “high” normally associated with opioids. The FDA application is for a Nektar product called NKTR-181 and is designed to treat chronic low back pain in adults who are new to opioid therapy.

Steve Doberstein, Nektar’s senior vice president of research and development, said, “This innovative investigational medicine separates analgesic efficacy from the high levels of euphoria that too often lead to the abuse and addiction of traditional opioids.” Because of its molecular structure, NKTR-181 enters the brain slowly, dampening the release of dopamine, a neurotransmitter involved in the producing euphoria.

State Fund Medical Director Says Opioid Focus Cut Prescriptions by Half

Dr. Dinesh Govindarao, chief medical officer for California’s State Compensation Insurance Fund (State Fund), said that through a focused approach they have been able to cut opioid prescriptions in half. Following on the heels of his presentation last month, Dr. Govindarao said that from 2013 (when he joined State Fund) to 2017 they focused on a two-pronged approach. First, they sought to prevent new injured workers from “getting on opioids.” Second, they had to deal with the chronic cases (legacy claims) where an injured worker had been on opioids for years. In that instance they focused on a weaning program, and if they were not able to wean, at least reduce the amount of opioids the injured worker was taking.

He said that through provider education, requiring prior approval for any opioid prescription lasting longer than 14 days, and use of network pharmacies, the number of claims with at least one opioid prescription fell 50 percent, from 27,369 in 2014, to 13,693 in 2017. In addition, the number of injured workers with an opioid prescription that exceeded 120 milligrams of morphine fell 81.3 percent, from 1,458 in 2014 to just 237 in 2017. Lastly, the number of injured workers who received an opioid prescription in the first 30 days after an injury decreased 60 percent, from 3,732 in 2014 to 1,494 in 2017.

Texas Gov. Greg Abbot Appoints Cassie Brown Commissioner of Workers’ Compensation

We learned in April that Texas Division of Workers’ Compensation Commissioner Ryan Brannan announced he was resigning effective May 1. He is now working as a lobbyist. Commissioner Brannan’s term had been set to run through February 1, 2019. Most system participants were disappointed by this news. Commissioner Brannan was level-headed and reasonable, and showed good leadership while at the division. His leadership during Hurricane Harvey, for example, was outstanding. Despite disruptions and dislocations to the workers’ compensation system in the aftermath of Hurricane Harvey, system participants knew what to do, thanks to Ryan Brannan’s strong leadership and excellent communication.

Gov. Abbott appointed Cassie Brown to serve as Acting Commissioner of Workers’ Compensation. Her term is set to run through February 1, 2019. It is unclear at this juncture if she will continue as Commissioner after the end of her short term. Cassie Brown, a resident of Austin, has served as deputy commissioner for regulatory policy at the Texas Department of Insurance and has worked for the Texas Department of Insurance since 2011. Before that she was a policy adviser for Governor Rick Perry.

UR Fraud Probe Regarding Disgraced Former Physician Under Way in NY and Connecticut

In 2013, New York physician Spyros Panos pleaded guilty to perpetrating more than $35 million in fraud by billing insurance companies for thousands of surgeries he never performed. Thereafter he was stripped of his medical license. Before going to prison, Panos set up an email address in the name of a Westchester County orthopedic surgeon (whose name has not been released). At the same time a relative set up a company called Excel O. Panos was sentenced to four years in prison but only served two. In 2016, Panos was released to a halfway house, followed by home confinement. Around this time Panos began doing utilization reviews in the name of the orthopedic surgeon, via Excel O.

Over the next two and a half years, Panos did hundreds of reviews for nearly 60 insurance carriers operating in New York and Connecticut. According to court records, Panos and Excel O were able to collect more than $860,000 before the fraud was uncovered. Also, Stephen Morelli, chairman of the Connecticut Workers’ Compensation Commission, said “Apparently, a very high percentage of his reviews ended in denials, which should have raised some red flags for someone.” In a bulletin, he urged claimants in Connecticut to contact their insurance carrier to see if Panos performed peer/utilization review services on their claim.

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.