CWCI’s Report on Opioids in the WCMSA; where do we go from here?

The California Workers’ Compensation Institute (CWCI) is a private organization of insurers and self-insured employers that use claims data to identify problem areas in the workers’ compensation system and seek solutions for them within the industry. The CWCI recently put out a report entitled “Opioids in Workers’ Compensation Medicare Set-Asides” (WCMSA) based on the results of a study that examined the pharmaceutical component of approximately 8,000 CMS-approved WCMSA arrangements. The arrangements had been approved by CMS between January of 2015 and December of 2016.  NuQuest was one of the four national WCMSA vendors that provided data for this study.

Objectives of the Study

The study objectives included the identification of categories of the most frequent medications in the WCMSA study sample. Data from the CMS reviewed WCMSA arrangements was compared with data from a control group of 71,771 closed permanent disability claims from accident years 2006 through 2009  involving similar injuries without an associated WCMSA. Given the current opioid abuse epidemic, and CMS’ pharmacy projection model, it comes as no surprise that opioids were the most common drug group found in the WCMSAs that were examined. In addition, it is significant to note that the cumulative morphine milligram equivalents (MMEs) in the CMS reviewed WCMSAs were 45 times the amounts used in the control group.   Furthermore, pharmaceuticals accounted for only 17% of total medical dollars paid in the control group, while the pharmaceuticals in the CMS-approved WCMSA arrangements accounted for 47% of the total projected medical allocation.

The study also sought to determine whether CMS’ projection model for opioids aligned with evidence-based medicine guidelines for opioids. The American Pain Society, the American College of Physicians, and the American Academy of Neurology all recommend against the use of opioids for chronic pain since there is no evidence of improved function with the use of opioids for chronic low back pain (which accounted for 39% of the CMS-approved WCMSAs). Medical literature also indicates that individuals who are using benzodiazepines along with opioids are at an even greater risk of death. The CMS-approved WCMSAs, however, showed that 1 in 7 WCMSAs with opioids also included prescription allocations for benzodiazepines, while approximately 5 % of the WCMSAs with opioids had benzodiazepines and muscle relaxants. Although the authors of the study acknowledged that CMS reviewed WCMSAs estimate future injury-related care based on current treatment regimens, they cautioned that CMS’ presumption of the long-term use of opioids at these high levels places claimants at an increased risk of harm. The authors also called for modifications to the WCMSA projection methodology that would treat opioids differently than other medications as a matter of public policy.

So where do we go from here?

As one of the four national vendors that provided data for the CWCI report, NuQuest has been closely monitoring  CMS’ overfunding of determinations over the years. The need to address this resulted in our development of the non-submitted NuShield certified MSA. The certified MSA projects opioids and other care, in accordance with evidence-based medicine guidelines and the claimant’s current treatment regimen. The projections are both medically and legally defensible. In addition to our hold harmless and indemnification agreement that accompanies the NuShield certified MSA, our assistance in the administration of the certified MSA funds prevents premature exhaustion of the funds.

The use of the NuShield certified MSA in California cases and nationwide has resulted in significant pharmaceutical and medical savings. The table below illustrates the difference between the use of our evidence-based medicine pharmaceutical approach in California when compared with the use of CMS’ projection methodology for the same pharmaceuticals.

Rated Age Diagnosis NuShield RX using EBM CMS RX methodology
69 CRPS, pain LE, depression $38,822.00 $77,645.00
70 Status post fracture repair wrist, depression, insomnia, carpal tunnel repair $70,041.00 $181,728
55 Postlaminectomy syndrome, lumbar, cervicalgia, plantar fascitis $173,559.60 $253,303

The CWCI study’s comparison of pharmacy expenditures in its control group with the CMS pharmaceutical projections for a similar class underscores the disconnect between actual usage and CMS’ projection methodology. More information regarding the NuShield certified MSA program is available upon request by contacting Kip Daniels or Barbara Fairchild at or


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