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AIA Testifies On Opioid And Prescription Drug Cost Abuse In Workers' Compensation Before NCOIL


Contact: Benjamin Tomchik
(202) 828-7129


WASHINGTON, D.C., July 12, 2012 – Bruce Wood, associate general counsel and director of workers’ compensation programs for the American Insurance Association (AIA), today testified before the National Conference of Insurance Legislators (NCOIL) Workers’ Compensation Committee on opioid and prescription drug cost abuse in the workers’ compensation system.  The hearing, which includes a panel discussion, is focused on potential legislative solutions to address the growing problem of opioid abuse in workers’ compensation cases.

“The abuse of opioids and prescription drugs involved in workers’ compensation is growing at a staggering rate,” said Wood.  “Action is needed by states to help combat this epidemic.  Opioid abuse goes beyond workers’ compensation and is now a health, economic and societal problem.”

Opioids are synthetic versions of opium-derived drugs which are used to provide relief from chronic pain.  Chronic non-medical use of opioid pain relievers has increased nearly 75 percent since 2003.  More than $1.4 billion has already been spent on opioid narcotics in workers’ compensation cases this year alone.  However, there remains little credible evidence that long-term opioid use is the appropriate treatment for many  injuries as it often does not lead to improved long-term health outcomes. 

A contributing factor in workers’ compensation drug costs are not only the abuse of opioids but in physician dispensing and drug repackaging.  Only in workers’ compensation and auto PIP programs is drug repackaging a problem, and only in these programs are there uncapped reimbursements.  Uncapped because drug repackagers are able to assign a National Drug Code (NDC) different from that of the original manufacturer, and workers’ compensation pharmacy fee schedules generally do not specify reimbursements at the rate assigned by the original manufacturer’s NDC.

The United States also lacks comprehensive, robust national prescription drug monitoring programs.  Most state programs are outdated, track a patient within a single state, and severely limit access by parties other than the physician and the pharmacy.  As a result, patients may file multiple prescriptions in one state, or in a multi-state area, without a monitoring program’s oversight. 

“The result has enabled the opioid abuse problem to grow at a staggering rate,” said Wood.  “Ten percent of opioid users seek care from multiple doctors, and account for 40 percent of drug overdoses in the U.S.” 

The White House Office of National Drug Control Policy has already declared prescription drug abuse a “national epidemic.”  In the United States, opioid abuse has resulted in one death every 19 minutes and 27,000 unintentional deaths.  AIA firmly believes that prescription monitoring reforms are needed on the state-level to address this problem.  New York, Oklahoma, and Kentucky recently strengthened their prescription monitoring programs and are to be commended.  Missouri is the only state without any prescription monitoring programs.

“Opioid dosing guidelines, a strong prescription monitoring system and pain management consultations for patients are all sensible and reasonable solutions that can be applied in the states,” said Wood.  “Washington State instituted similar guidelines in 2007 to great effect and is a model for states struggling to address this growing problem.”

A copy of Mr. Wood’s NCOIL presentation is attached, please click here.

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The American Insurance Association (AIA) is the leading property-casualty insurance trade organization, representing approximately 300 insurers that write more than $100 billion in premiums each year. AIA member companies offer all types of property - casualty insurance, including personal and commercial auto insurance, commercial property and liability coverage for small businesses, workers' compensation, homeowners' insurance, medical malpractice coverage, and product liability insurance.