Workers’ Comp Reform Needed to Help Injured Workers and End Trial Lawyer Scam

State Rep. Ryan Mackenzie (R-Berks) suspected something sinister at work when the trial bar targeted him with a negative ad campaign over his legislation, HB 18, which creates a drug formulary for injured workers. The campaign was venomous even by the usual trial bar standards. 

It turns out the attack campaign was a pre-emptive strike aimed at protecting a racket involving a cabal of lawyers and their pet doctors whose financial interests in a pharmacy made them rich at the expense of injured workers and their employers. The ugly details of the scandal were laid out in a Philadelphia Inquirer investigative report published on September 24

In short, the lawyers would refer injured workers to doctors who would prescribe everyday creams and ointments, available over-the-counter for $60 or $70, from their pharmacies at exorbitant prices – some costing $8,000 per tube. The moneymaking conflict of interest was complete with the cost of the “medicine” inflating final settlements amounts under the workers’ compensation system.

“The insurance carriers usually stopped covering the costs of the ointments fairly early in the treatments,” Mackenzie said. “But the doctors would keep prescribing them and then tell the workers not to bother paying. The cost to cover all the prescriptions would be cited by the lawyers and become part of a final settlement agreement.”

PMA President David N. Taylor said that the scam is another tragic example how the litigation industry is corruptly exploiting the system at the expense of everyone else. “Yet again, the trial lawyers are looting a program intended to help vulnerable people, causing injured workers to suffer longer than they should and making employers overpay for a system that is costlier than it should be.”

Rep. Mackenzie sponsored HB 18 to establish an evidence-based formulary that would help workers complete their treatments and get off their medications, which for some was leading to opioid addictions, and get them back to work as quickly as possible.

“We are in the top three states for not only the number of prescriptions handed out to injured workers but the length of duration of those prescriptions,” Mackenzie said. “States with formularies (New York, Texas, California and Ohio among them) get their workers off the drugs and back to work in some instances in nearly half the time.”

Ohio, for example, implemented its formulary in 2011, and in just three years the number of workers compensation patients considered opioid dependent, was reduced by half.

To prevent future scams, Mackenzie has prepared an amendment to HB 18 that would forbid a lawyer from referring a client to a health care provider who would prescribe treatment or prescription drugs at a health care facility or pharmacy in which the lawyer holds a direct or indirect ownership interest.

Carrying the trial lawyers’ water, some lawmakers have filed amendments that would effectively gut the bill.

The business community has mounted a campaign of its own, one supported by the PMA, the Pennsylvania Chamber of Business and Industry, the National Federal of Independent Business, and over a dozen other business, government and health care groups. 

“This relationship between lawyers, doctors and pharmacies is wrong,“ said Gene Barr, President and CEO of the Chamber. “But even more disturbing is the lengths they’ve gone to oppose good legislation that would build on the work of the legislature and Governor to combat this tragic prescription drug and opioid epidemic.”

HB 18 was set for a floor vote in mid-June but a procedural motion led by Rep. Gene DiGirolamo, (R-Bucks), sent the bill to the Rules Committee, where it awaits action.

To be sure, the scandal laid out in the Inquirer story will help the bill’s chances – as Mackenzie said “they (trial bar) shot themselves in the foot this time.”

But it doesn’t end there. The lawyer/doctor racket prompted Liberty Mutual Insurance to file a lawsuit on September 14 in Philadelphia Common Pleas Court, alleging that 18 doctors in the Philadelphia area were sending injured workers to pharmacies that would then bill carriers for “vast quantities” of compounded pain creams at inflated prices.

A follow-up Inquirer story published on September 30. (Read HEREsays that suit alleges the doctors and pharmacists formed “illegal, collusive relationships” that exploited weaknesses in Pennsylvania’s workers’ comp system. It contends they created and prescribed compounded creams that are not included in the system’s fee schedule, leading to “highly inflated” bills of $5,000 to $8,000 per tube of cream.

The story goes on: “Liberty Mutual also alleges that compounded creams were not tailored to individual patients, but rather ‘manufactured in batches,’ in violation of Food and Drug Administration regulations. Many medical experts say there is little evidence that such creams are safe or effective.”

There’s nothing to dislike about HB 18: it would help prevent opioid addictions, get injured workers back on the job more quickly, reduce costs in the workers’ compensation system, and put an end to a greedy practice designed to make a few chiselers rich at the expense and health of others.