Article is published on www.law360.com

The prescription opioid epidemic ravaging the country claims almost a hundred lives daily with an annual economic cost upward of $500 billion. This epidemic is so widespread that current estimates are that almost two million Americans are dependent on or abuse prescription opioids.  

As would be expected with what has been described as a “national health emergency” that impacts so many lives and areas of society, there is no lack of finger-pointing at who is to blame. But curiously, there is not much focus on who should take responsibility for adequately addressing it.  

The usual suspects are the pharmaceutical companies who promote highly addictive opioid painkillers through aggressive marketing programs, the healthcare providers who prescribe them – at times just to placate patients –and the distribution channel of pharmacies that make them available 24/7.  

There is, however, a fourth player in the opioid epidemic drama.  And until recently, this player has not been the subject of very much attention. It now, however, finds itself under much closer scrutiny for its role in allegedly getting and keeping patients addicted to opioid painkillers while not doing enough to help fix a problem it is accused of helping create and perpetuate.  

Who is this fourth player?

It is the payors – the private and public companies and programs that pay for the health care costs for the vast majority of Americans.  These include the well-known commercial companies as well as government programs such as Medicare, Medicaid and the collection of state and local health insurance programs.

Fueling the Epidemic

Various studies, most recently one by the Johns Hopkins University Bloomberg School of Public Health, strongly suggest that payors have not done enough to combat the opioid epidemic.  The Johns Hopkins study, for example, concluded that major insurer coverage policies for drugs to treat lower back pain – one of the more common types of chronic, non-cancer pain for which prescription opioids have been overused – “missed important opportunities” to steer patients toward safer and more effective treatments than prescription opioids.

While there are a variety of payor policies and actions blamed for the ongoing increase in prescription opioid use (and abuse), they fall into three basic areas:

Prescription Opioids are Too Price Accessible

In an open market, there is usually a direct relationship between price and demand.  This is perhaps nowhere more evident than with prescription opioid painkillers. The logic is simple and unavoidable.  If opioid-based medicines cost less than safer alternatives – including non-narcotic medicines – then prescribers and consumers will opt for the addictive opioids rather than less addictive medicines.

This economic reality has been consistently borne out by researchers.  In the Johns Hopkins study, for example, it was shown that both public and commercial insurance plans tend to make covered opioids available relatively cheaply to patients.  How cheaply? The median commercial plan, for example, places 74 percent of opioid painkillers in Tier 1, the lowest cost category, and the median commercial co-pay for Tier 1 opioids was just $10 for a month’s supply.

In stark contrast, studies show that only one-third of the more than 40 million people covered by Medicare have access to an available painkiller skin patch that contains a much less risky opioid as its key active ingredient.   Other plans simply do not cover non-addictive alternatives to opioids or have co-pays that are higher than those for opioids. Many plans also require pre-authorization for the safer, alternative painkillers.

According to Elijah Cummings, ranking member of the House Committee on Oversight and Government Reform, the insurance industry has, in effect, created incentives that may steer patients to the very drugs that are fueling the opioid crisis.

The price preference for opioids also tends to make tamper-resistant and abuse-deterrent formulations more expensive than their alternatives.

Prescribers are Rewarded for Putting or Keeping Patients on Opioids

As a previous blog from SAC reported, the U.S. Government, through its Medicare program, may also be contributing to the opioid epidemic by including pain questions on patient satisfaction surveys.  The belief is that these surveys pressure doctors to prescribe unnecessary opioids in hopes of getting a better score on patient surveys. The results of patient surveys are used to determine a hospital’s reimbursement rate.

It is easy to spot the conflict here. Tying money to great reviews can easily lead to undue pressure on doctors to prescribe opioids to make a patient happy in order to get a good score. And, perhaps the biggest area affected by patient satisfaction surveys has been the emergency room setting. Several studies suggest that ER doctors have drastically changed their practice in order to avoid negative patient satisfaction reports. They may sometimes prescribe  painkillers, even when not entirely necessary, to get paid by Uncle Sam.

Two surveys of more than 800 emergency physicians by Emergency Physicians Monthly and the South Carolina Medical Association reported that more than 50 percent of the ER docs routinely ordered tests and procedures, prescribed medications, and even admitted patients to the hospital unnecessarily. Why? Because patient satisfaction affects their bottom line.

Compounding the problem are savvy patients aware of how the system now works. One physician wrote that drug seekers “are well aware of the patient satisfaction scores and how they can use these threats and complaints to obtain narcotics.”

Lax Application of Utility Management Protocols

Another factor identified by the Johns Hopkins study is that many insurers failed to apply evidence-based “utilization management” rules to discourage opioid overuse and encourage safer and more effective alternatives. What’s more, many of the utilization management rules in place were applied as often to non-opioids as opioids.

While utilization management takes various forms depending on the clinical setting and payor policies, the most common are quantity limits, step therapy and prior authorization. Here are some of the ways that not correctly applying these rules exacerbates the opioid crisis:

• Quantity Limits. While the U.S. Centers for Disease Control and Prevention Guideline for Prescribing Opioids for Chronic Pain is for a short-term supply, many insurance policies allow for 30-day supplies.  The danger here is that duration of early prescriptions is associated with a patient converting to chronic use.
• Step Therapy. This is a strategy that makes riskier opioids the “last resort” for pain management after other, non-narcotic medications have failed to provide pain relief. By permitting opioids to be a “first step,” the risk of addiction and/or chronic use increases.  Unfortunately, fewer than 10 percent of government and commercial plans require step therapy for opioids.
• Prior Authorization. The idea is that requiring a provider to get in touch with the insurer before prescribing an opioid will help reduce the number of prescriptions or encourage quantity control or step therapy.  The reality is that only a minority of plans require this.

The Way Forward

Providers have a stake in working with payors – commercial and public – as well as with distribution channels to continue to develop integrated solutions to the opioid crisis.  Aside from the human toll on their communities, they also are not immune to the economic costs. Studies have clearly shown that the epidemic is increasing hospitalizations and that it hits emergency rooms especially hard.

Some estimates put the average cost of treating an overdose patient in the intensive care unit at almost $100,000.   If a majority – or even a minority – of these patients are underinsured or uninsured, the resulting uncompensated care costs can easily cripple a provider that is already operating on a razor-thin margin.

Three things that providers can do now to contribute to a solution are to support initiatives being undertaken by such groups as America’s Health Insurance Plans that seek to combat opioid abuse.  They also can develop, implement and maximize the value of programs designed to identify potential opioid abusers and limit the prescribing of opioid painkillers. Finally, they can negotiate contracts with payors that require prompt authorization and reimbursement for non-opioid alternatives where indicated.