State: Doctors exploiting loophole to over-prescribe opioids

Illinois physicians can sell “repackaged” pills at exorbitant markups, averaging between 60 percent and 300 percent.

By Austin Berg 
Illinois Policy

When an Illinoisan gets hurt at work, she goes to the doctor. The doctor treats her, and perhaps prescribes a painkiller. She gets better. She starts working again.

At least, that’s how things are expected to play out.

But a little-known loophole in Illinois’ workers’ compensation system is being used to exploit vulnerable workers for personal profit, at the expense of workers’ health.

Through a process called physician dispensing, Illinois doctors can not only prescribe drugs but also sell them to injured workers. Research shows that when physicians are allowed to do this, they prescribe 3.2 times the quantity of opioid drugs they would prescribe otherwise.

Why? Illinois physicians can sell “repackaged” pills at exorbitant markups, averaging between 60 percent and 300 percent.

This bizarre system may help explain why a recent state study found that workers in Illinois spend as much as twice as long away from work after an injury as workers in Iowa, Wisconsin and Indiana.

But beyond the dollars, cents and data, the potential human costs are alarming. Overprescribing opioids for pain can come with life-threatening consequences.

Ron Vlasaty, executive vice president of Illinois-based Family Guidance Centers Inc., has seen the consequences of opioid addiction firsthand. His organization sees 2,000 patients each day; 1,500 of them are on methadone to treat opioid addiction.

“We have patients who used to work, were injured, were prescribed a painkiller, and eventually became addicted,” Vlasaty said. “They lost their job, lost their money, and then they came to us. We’re the last stop before jail or death.”

Pete McLenighan is the executive director at Stepping Stones, a drug treatment facility that has served Joliet-area residents for 45 years. Over the last three years, McLenighan has seen a measurable increase in people seeking treatment for prescription opioid addiction.

“Incentives matter,” McLenighan said. “What they created was an incentive for the doctor to profit from that rather than simply writing a scrip because they think it’s necessary. That’s a real cause for concern.”

In 2011, lawmakers tried to take away those incentives. But doctors created a workaround.

When lawmakers enacted rules to make reimbursement rates for physician-dispensed drugs the same as for pharmacies, physicians altered the dosage of existing drugs and presented them as new, more expensive drugs. That’s repackaging in a nutshell.

Take hydrocodone-acetaminophen, commonly known as Vicodin. It’s one of the most popular painkillers prescribed to injured workers.

A January 2015 study from the Workers Compensation Research Institute revealed that after the new rules took effect, doctors began prescribing a previously rare dosage of the drug at $3.04 a pill – double to quadruple the price for the same drug in other existing strengths.

The study was unable to find any medical justification for the new dosage, and concluded financial motives were likely at play.

Doctors profit from this system. Injured workers suffer.

Illinois workers who receive repackaged opioid medication spend an average of 85 percent longer off work, according to a study from Johns Hopkins University. Not only is that a poor outcome for workers, but it also comes at a total cost to employers (including medical costs and payment of lost wages) of more than $22,000 per injury-related event.

It’s no wonder Illinois workers’ compensation costs are the highest in the Midwest. Just ask Curtis Hawkins.

Hawkins is a longtime truck driver who recently started his own trucking authority in East Peoria. He was shocked by his first year of workers’ compensation premiums. With a total payroll of $98,000, he paid more than $20,000 in workers’ compensation insurance. And that was with no injuries.

“Stuff like this, it just kills you,” Hawkins said. “It makes the day-to-day struggle a lot harder.”

Clearly, the system is broken.

Two states offer possible solutions for Illinois. Texas bans physician dispensing, except in rural areas where pharmacists are not easily available.

Indiana bans physicians from dispensing drugs more than eight days after an accident. This way, painkillers can be provided in an emergency, but patients must refill their prescriptions at pharmacies rather than in their doctors’ offices.

For the sake of workers and employers alike, Illinois lawmakers must act to fix its system. Opioid addiction is not a partisan issue.

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