Legislature(2015 - 2016)BARNES 124
02/27/2015 03:15 PM LABOR & COMMERCE
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HB 32-WORKERS COMP: CONTROLLED SUBSTANCES TESTS 3:18:32 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 32, "An Act relating to employer-required drug testing; requiring the Alaska Workers' Compensation Board to adopt regulations relating to the prescription of controlled substances to employees; and relating to the prescription of controlled substances to employees." 3:19:03 PM KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State Legislature, on behalf of the prime sponsor, Representative Kurt Olson, stated that HB 32 is intended to address opioid use, which is one of the factors leading to the high cost of workers' compensation insurance in Alaska. The sponsor introduced a similar bill last legislature on the same topic. This bill would allow for drug testing for workers' compensation patient opioid use under very specific circumstances by limiting prescriptions for opioids to a 30-day supply. He said the bill's focus is aimed to help reduce the high cost of workers' compensation in Alaska by addressing the epidemic use of opioid use and abuse of prescription drugs by workers' compensation patients. MR. JACKSON gave a brief section-by-section analysis of HB 32, relating that Section 1 would authorize drug testing of injured workers if the employees have been prescribed a controlled substance for over 90 days. He said a negative test could result in denial of future payments for the controlled substance by the employer, although negative or positive test results may not result in any adverse employment action. He directed attention to the "may" language, which is permissive since it does not mandate a test after 90 days. MR. JACKSON stated that Section 2 requires the Workers' Compensation Board to adopt regulations pertaining to the provisions in Section 3 of HB 32. 3:20:53 PM MR. JACKSON stated Section 3 will limit prescriptions of controlled substances listed in schedule IA, IIIA, or VA in AS 11.71 to a 30-day supply; however, an employer or insurer may use an employee's negative test result under AS 23.10 to claim that the employee may not be eligible for future payments for schedule IA controlled substance prescription. Again, this bill is designed to limit and discourage use of long-term opioids by restricting prescriptions to controlled substances to 30 days, he said. He reported statistics that show one in four prescriptions is being used by someone who has not been prescribed the medication that employers are paying for, either directly or through insurer premiums. 3:22:06 PM MR. JACKSON emphasized that the drugs in question are not mild drugs, but are opioids, which are a synthetic version of opium- derived drugs as defined in AS 11. Higher usage and dosage of opioids over long periods of time can lead to addiction, increased disability or work loss, and potentially even death. He reported that deaths from overdoses have grown dramatically and in many states have now exceeded deaths from automobile crashes. He concluded by stating that prescription drug abuse has been declared an epidemic by the Centers for Disease Control (CDC). 3:23:45 PM CHAIR OLSON asked whether patients can obtain a new prescription so long as they see their doctor. MR. JACKSON answered yes. The bill proposes reducing a 90-day prescription of controlled substances to 30 days. Patients can obtain refills by visiting their physicians, who can prescribe an additional 30-day refill, if deemed necessary. The overall goal is to reduce workers' compensation costs, but also to get workers healthy and back to work as quickly as possible, and proper pain management is a key component. 3:24:42 PM REPRESENTATIVE HUGHES asked for further clarification if the drug test is negative and the opioids are not in the patient's system, whether it is possible that these drugs might be diverted and are being illegally sold. She further asked whether the statistics for overdoses are for patients being prescribed the drugs or by people illegally buying diverted prescription drugs. MR. JACKSON replied that a negative test may result in denial of a prescription refill for controlled substances, noting these costs are being passed on to the insurer or the employer. Thus if the patients do not need the medication, their employers need to stop paying for it. He clarified that this bill does not accuse workers' compensation patients of selling their prescription drugs, in fact, patients may simply be putting their prescriptions in the medicine cabinet. This bill allows the drug testing to occur to ensure that patients are taking their medications. If patients have been consciously attempting to wean themselves off their pain medication, and some have done so, they must do so in conjunction with their doctors. He reiterated that this bill does not intend to harm the injured worker. He directed attention to some of the reports in members' packets that provide information on drug overdoses, although he did not specifically recall the figures. 3:27:48 PM CHAIR OLSON said that he has heard that one-third of Alaskan workers are subject to random UAs (urine analysis) with more stringent actions allowed for positive tests. For example, North Slope workers will lose their jobs if they have a negative test. Employees of many industries, including ones related to transportation, maritime, and the military currently subject to drug testing, he reported. 3:28:28 PM REPRESENTATIVE HUGHES said it is a good bill and she supports it. She emphasized the importance of reducing workers' compensation costs in Alaska. She asked whether any employers are subject to rules regarding administering random UAs, for example, whether employees are forewarned. MR. JACKSON answered that this bill specifically addresses Title 23, which relates to workers' compensation and does not apply to other workers. He clarified that this bill applies to injured workers who have been taking prescriptions opioids for more than 90 days. However, this bill would not apply to patients taking prescription drugs for opioids for less than 90 days; instead, the trigger for drug testing of workers' compensation patients is for patients have been taking prescription opioids for 90 days or longer. He stated that the details for testing will be laid out in regulation upon passage of HB 32. 3:30:44 PM REPRESENTATIVE COLVER asked who can order the tests, whether it is the employer or the workers' compensation carrier. MR. JACKSON answered that it is not spelled out in the bill, but it will be established in regulation. He directed attention to Section 1, which allows the employer, or essentially the claims manager to order the testing. He deferred to Mr. Monagle to further address this during his testimony. 3:31:49 PM REPRESENTATIVE KITO said this is the first time he has seen the bill. He expressed concern that the state would establish different classes of care for people. He offered if the state believes that it needs to assure that there isn't abuse of scheduled drugs, the statutes should apply to everyone, not just those receiving workers' compensation. However, if there is further concern about keep people from illegally selling narcotics, it is already illegal to do so. He suggested that there should be other ways to investigating whether that activity is taking place. He did not think that doctors could provide evidence to an investigator as to whether a patient is potentially selling narcotics. 3:33:09 PM REPRESENTATIVE KITO asked how long it takes for prescription drugs listed in schedule IA to clear a patient's bloodstream. He wondered when workers' compensation patients will have clear urine analysis tests. He further asked for the percentage of cases that this would apply to in Alaska, for example, if the state has 100 workers' compensation cases, how many cases would involve prescriptions for narcotics beyond 30 days. He asked whether the doctor will need to refill the prescriptions after 30 days for patients who have prescriptions for narcotics. MR. JACKSON answered he is absolutely correct that it is illegal for anyone to resell prescriptions that are not prescribed to them. Thus only pharmacies can sell prescription drugs. In terms of the length of time for opioids to leave a person's system, he surmised that it would depend on the body mass and the drug; however, he was not certain. He deferred to Mr. Monagle, but also offered to research the matter. 3:35:42 PM REPRESENTATIVE KITO felt it was important to know what workers' compensation patients were being testing for and if a prescription drug clears in one day or seven days would mean different things. MR. JACKSON provided some statistics for Alaska, noting that in 2011, prescription drugs comprised almost 20 percent of the medical costs of workers' compensation claims. Over 90 percent of the time, injured workers missing one or more weeks had prescriptions covered by workers' compensation, of which, 60 to 90 percent received opioids or narcotics. 3:36:42 PM REPRESENTATIVE KITO asked for further clarification if he was indicating 60 percent of 90 percent of the 20 percent of medical costs were for workers' compensation claims. MR. JACKSON answered yes. 3:37:09 PM CHAIR OLSON asked whether that amounted to 11 percent of injured workers. MR. JACKSON deferred to Chair Olson on the math. 3:37:20 PM MR. JACKSON, referring to the 30-day renewal, stated that the sponsor's hope was to encourage a stronger and more robust communication between doctors and injured workers, which will allow for 30-day refills of prescriptions for opioids, which could encourage a conversation between doctors and patients that could mean patients don't need prescriptions for additional drugs. 3:38:11 PM REPRESENTATIVE JOSEPHSON asked for clarification on the statistics. MR. JACKSON responded that 20 percent of the medical costs in workers' compensation claims were for prescription drugs in 2011. Ninety percent of the injured workers who missed a week or more received workers' compensation prescriptions, with 60-90 percent of them receiving opioids. 3:39:25 PM REPRESENTATIVE JOSEPHSON said that the statistics tell him that injured workers are prescribed lots of drugs. He contemplated how best to use that information and whether this bill represents the right means to reduce costs. CHAIR OLSON added that HB 32 will provide one tool to do so. Ultimately, he hoped that the best practices for pain management will be completed in the next year or two. Although he is not a doctor, it seemed to him that prescribing drugs to injured workers that were intended as end of life drugs for cancer patients without first trying other options can create some problems. For example, after several months of being on opioids, injured workers are much less likely to return to their jobs. He offered to provide statistics, but reiterated that the longer injured workers are on drugs like oxycodone, the less likely they are to return to work. 3:41:04 PM REPRESENTATIVE JOSEPHSON asked whether any study or data supported that legislation of this type in other states has achieved results, in other words if premium costs were then reduced. MR. JACKSON related that Florida, Washington, Colorado and Texas have initiated reforms and Texas and Washington have also seen significant reductions in deaths from opioid use. Other states, including Florida have restricted physicians from dispensing and all of those measures have contributed to a reduction in deaths and abuse of prescription opioids. He did not have the statistics on hand, he said. 3:42:42 PM CHAIR OLSON recalled that the committee has a relatively recent national study from the Workers' Compensation Research Institute it can distribute to members. 3:43:55 PM REPRESENTATIVE TILTON related her understanding that long-term use leads to addiction. She asked whether workers' compensation covers rehabilitation. MR. JACKSON deferred to Mr. Monagle to respond. He referred to a study in members' packets by the Lockton Companies entitled, "Opioids Wreak Havoc on Workers' Compensation Costs" that highlighted the addiction and other problems observed throughout the country. He added that members' packets also include some charts that show the number of deaths attributed to overdoses. 3:45:19 PM REPRESENTATIVE TILTON asked whether any information is available on prescription paid medicines prescribed in workers' compensation claims that have been seized in investigations. MR. JACKSON answered that he was unsure whether the Department of Public Safety (DPS) tracks the source, but he offered to check. He stated the DPS provided information in members' packets on hydrocodone seized in 2011-2013. REPRESENTATIVE TILTON suggested it may be difficult to track that type of information, but it could be useful information. CHAIR OLSON offered to request any information that is available from the department. 3:46:54 PM REPRESENTATIVE KITO pointed to the earlier statistics. He said he was surprised only 20 percent of workers' compensation claims involve prescriptions, but it seemed as though about 1 or 1.2 people per hundred were using opioids. He asked for further clarification on whether there are any anticipated cost savings by implementing this bill. MR. JACKSON answered that not have the figures, which were calculated by the National Council on Compensation Insurance (NCCI). He anticipated that it may take time to quantify costs and savings that may be realized from passage of HB 32. He offered to try to obtain the information. 3:48:24 PM REPRESENTATIVE KITO asked for further clarification on whether the information would be nationwide or applicable to Alaska. MR. JACKSON answered that the estimated savings would be specific to Alaska, assuming that this bill passes. 3:48:46 PM REPRESENTATIVE KITO expressed an interest in identifying a ballpark figure of cost savings. He reiterated his interest in how much money Alaska insurers stand to save on workers' compensation costs. He suggested that if the state hopes to save money it would be good to identify any savings. MR. JACKSON emphasized that he agreed it is important to determine savings, plus, another benefit in passing the bill could be the number of people that may never abuse narcotics or have prescription drugs diverted and found by children. 3:50:17 PM CHAIR OLSON stated that approximately half the states have enacted similar legislation. He offered to obtain the information on the number of states that have implemented measures of this type. He offered his belief that other states have seen significant savings. 3:50:45 PM REPRESENTATIVE HUGHES offered her belief that it is important to have a foundation on this issue. She asked for further clarification, in terms of protection of privacy, of how employers become aware of their employees being on workers' compensation. MR. JACKSON deferred to Mr. Monagle to respond. REPRESENTATIVE HUGHES asked for further clarification on the information that employers are provided. 3:52:33 PM REPRESENTATIVE JOSEPHSON agreed this could be in the workers' best interests; however, he imagined that injured workers will be taking painkillers and not be getting a flu shot. He looked forward to a discussion on the nature of employer being privy to this type of medical information. 3:53:51 PM MICHAEL MONAGLE, Director, Central Office, Division of Workers' Compensation, Department of Labor & Workforce Development (DLWD), said as he consider the bill, he does not look at it in terms of cost savings to employers, but in terms of returning someone back to work and preventing people from destroying their lives by long-term opioid use. He recalled an instance in which an injured worker reached a point of medical recovery, but due to extensive use of opioids for several years, the worker had developed such cognitive and other impairments that the doctor classified the worker as permanently disabled. He said that it was those types of concerns that this legislation will address. The 90 days is identified by medical studies as the threshold when the physical problems begin to develop. He said that the curve for employees who return to work drops off sharply after 90 days on prescription pain killers. He explained that under the bill, injured employees under workers' compensation claims would obtain a 30-day supply of medication, followed by a consultation with their physician who can determine the effectiveness and necessity of prescribing an additional 30-days prescription for opioids. In many cases there isn't any functional improvement and the patients become addicted to opioids and continue to use them. Nationwide, the emphasis is to work to wean patients off opioids after 90 days in the hopes that patients can discontinue these drugs and learn how to deal with their pain management in more constructive ways. 3:56:29 PM REPRESENTATIVE JOSEPHSON asked for further clarification on how employee privacy and the employer's right to know would work. MR. MONAGLE said that typically what was meant in referring to the term "employer" in workers' compensation matters is the employer, the insurance company, or the claims administrator. Unless the entities are self-insured, most employers do not interact with an injured worker; instead that contact is done by the insurance company or the contracted claims administrator. The claims administrator or claims adjustor provides regular contact with the injured worker, who reviews the medical bills, authorizes payment of medical bills, and issues disability checks to the injured worker. He reiterated that the employer, the insurance company, or the claims administrator are the ones who will have access to the information on the prescription drugs since they are the ones who have access to the frequency that the injured worker is using prescription drugs. He suggested the claims administrator would initiate any check on the prescription, not the employer. 3:58:03 PM REPRESENTATIVE JOSEPHSON asked whether the claims adjustors confer to inquiries by small employers and if these adjustors use some discretion. MR. MONAGLE answered that workers' compensation was excluded from HIPAA [Health Insurance Portability and Accountability Act of 1996] law so the health care concerns between a provider and the patient does not apply in workers' compensation cases. Second, the provision of the Workers' Compensation Act says that parties to workers' compensation cases are entitled to any of the information about that case, which includes the employer, the injured worker and their representatives, such as the claims administrator or legal counsel. Thus any of the parties would have access to the information, he said. 3:59:26 PM REPRESENTATIVE JOSEPHSON asked whether any current statutes requires drug testing other than for those employees operating heavy equipment or for commercial carriers. MR. MONAGLE answered that AS 23.10.600-699 outlines employer drug testing. First, drug testing is a voluntary system so it is not mandatory for any employer to test. Drug testing is not administered by the state, but is left open to private action. He suggested that if employees feel their rights have been violated, their recourse is civil. It goes on to say that an employer must meet certain requirements in order to put in a policy for drug testing, for example, providing employees a 30- day notice prior to implementing a plan, as well as advising them of the conditions of testing, including the substances that will be tested. These statutes also provide remedies for those whose confidentiality has been violated or who suffer a false positive test that occurred through negligence on the part of the employer or the person doing the testing for the employer. 4:01:41 PM AESHA PALLESEN, Assistant Attorney General, Labor & State Affairs Section, Civil Division (Anchorage), Department of Law (DOL), agreed that provisions are generally set out in AS 23.10 for drug testing and that Section 1 of this bill would add a section to that drug testing regime for a negative drug testing in workers' compensation cases. 4:02:19 PM REPRESENTATIVE KITO recalled Mr. Monagle mentioned a patient who was on opioids for a long period of time; however, he offered his belief that this bill would not do anything about that and would only allow an action to be taken if someone had not been taking prescribed opioids. REPRESENTATIVE KITO expressed concern about what would be accomplished by the bill if the only denial is in regards to those who are not taking their prescribed medication. CHAIR OLSON stated that part of the bill was aimed at having workers' compensation injured employees see their doctor monthly and not refilling potent drugs via the pharmacy. He said that this action may result in additional costs, but it may also result in ultimate savings; however, the ultimate goal is to assist in getting injured workers back to work. 4:05:06 PM SCOTT JORDAN, Director, Division of Risk Management, Department of Administration (DOA), in response to a question on privacy issues, stated that Health Insurance Portability and Accountability Act (HIPAA) does not apply to workers' compensation cases so the state, which is self-insured, can share these records. He reported that he obtains a quarterly report of the workers' compensation individuals on opioid drugs. 4:06:05 PM CHAIR OLSON asked for further clarification on how many injured employees are taking scheduled drugs. MR. JORDAN answered that 67 employees of 900 open claims, or less than 1 percent are prescribed opioids. He characterized it as a low amount. 4:06:31 PM REPRESENTATIVE JOSEPHSON asked for further clarification that these are injured Alaska state employees. MR. JORDAN answered yes. 4:07:09 PM LORI WING-HEIER, Director, Division of Insurance (DOI), Anchorage Office, Department of Commerce, Community & Economic Development (DCCED), stated that from the DOI's perspective, after all is said and done, the data comes to the division and the DOI sets the rates for employers, including rates for the State of Alaska. These rates have gone up, and while they have stabilized somewhat in the past year, the rates are still very high. The division was proud that the state fell off the number one spot in the nation; however, these rates still represent a very high cost to employers across the state. Any impact to bring down the cost of workers' compensation will be considered, and this is one approach to do so. As a former risk manager, she can attest to the fact that the cost of rehabilitation is an expensive part of most workers' compensation claims when it involves pulling someone back from being on an opioid for a long period time. She reported that it increases the cost of the claim, which goes back into the workers' compensation rate and is shared by all employers. 4:08:52 PM REPRESENTATIVE JOSEPHSON related his understanding that there would normally be some type of tracking by the prescriber. He asked whether that information would be shared to ensure that a drug contract was followed. He asked whether that information would make its way back to the adjuster. MS. WING-HEIER answered that the adjuster will have a record of prescriptions being prescribed to the injured employee. However, this bill would require the employees to touch base with the physician every 30 days. In fact, it isn't meant to try to take the painkiller or narcotic away, but just requires patients to touch bases with their physicians to help prevent overprescribing. REPRESENTATIVE JOSEPHSON referred to Section 1 of the bill related to testing. He asked whether there is some redundancy if the prescriber already doing some testing. He recalled that in his experience as an attorney, that evidence he saw during trial and drug contracts. He asked whether an insurance adjuster will know those facts. MS. WING-HEIER answered that the adjuster will know the prescriptions were issued, but she was unsure whether the adjuster will know if any prescriptions were not being used and of the patient might be stockpiling the medication. 4:10:59 PM REPRESENTATIVE JOSEPHSON asked whether costs can be reported for the 67 of 900 injured employees. He recalled that 20 percent of the cost is for prescription drugs so he wondered how much money is being spent. MS. WING-HEIER said she has cumulative data for the state, but not the State of Alaska data. She deferred to Mr. Jordan. She did not have the itemized costs for the 67 injured state workers. 4:12:17 PM REPRESENTATIVE KITO offered that not all of the 67 total scheduled drug use cases will have prescriptions for controlled scheduled drugs over 90 days or that all of them will be violation cases. Thus it seemed as though out of 67, a very small number might be subject to this law. He asked whether she had any idea of the number of cases this would affect. MS. WING-HEIER answered that she does not have the specific information related to the state's plan; however, she agreed not every case would be for injured workers with prescriptions for controlled substances for over 30 days. She was unsure of whether the 67 of 900 were for prescriptions of over 90 days or if that was the current total for the state's claim record. She offered to provide some state statistical data for all employers. 4:13:51 PM REPRESENTATIVE KITO asked for further clarification on whether this applies to all employers. He expressed an interest in seeing the data for all employers. MS. WING-HEIER offered to provide it. 4:14:31 PM REPRESENTATIVE JOSEPHSON related his understanding that the state does not write workers' compensation checks to insurers since the state is self-insured. MR. JORDAN agreed that is correct. In further response to Representative Josephson, he clarified that the division does not pay a premium and he was unsure of the source of the $1,400 premium since the state is self-insured. CHAIR OLSON answered that the $1,400 refers to the monthly major medical health insurance cost for state employees. This bill would not affect those premiums since it isn't related to workers' compensation. 4:15:25 PM CHAIR OLSON opened public testimony on HB 32 and held public testimony open. [HB 32 was held over.]