This story was updated at 4:32 p.m. EST on April 26 to include a comment from the Department of Labor.

There were four opioid-related deaths of claimants in the U.S. Department of Labor’s federal employee workers compensation program in a six-year period, the agency said following an inspector general report that said a lack of oversight led to patients receiving “potentially lethal drugs.”

The watchdog report identified several instances in which the workers’ compensation program paid hundreds of millions of dollars on prescription drugs that may have been wasteful, unnecessary or dangerous. Though the program had policies in place that governed when and how certain prescriptions could be covered, oversight did not ensure rules were followed, the report said.

The program does not give medication to claimants but instead reimburses treating physicians for medications they prescribed related to workplace injuries.

“While there were four opioid-related deaths among FECA claimants during the period covered by the OIG audit, there is no evidence that any of those deaths were related to FECA program regulations, polices, or procedures,” the agency said in a statement to Federal Times on April 26.

The U.S. Department of Labor’s Office of Workers’ Compensation Programs, which covers more than 2 million federal employees and postal workers, paid for thousands of fast-acting fentanyl prescriptions that bypassed policy and resulted in patients receiving “potentially lethal drugs,” according to its inspector general.

“OWCP allowed claimants to receive thousands of inappropriate prescriptions and potentially lethal drugs, which could have caused serious harm to claimants,” it said.

For government employees who get injured on the job, the Federal Employees’ Compensation program finances medical care and other resources to help them return to work. In doing so, and as authorized by the 1916 Federal Employees’ Compensation Act, the program covers medications associated with on-the-job injuries in full, and beneficiaries don’t have to use personal insurance. Such medications might include “simple” drugs like antivirals or topical creams, but historically, opioids have also been an accepted prescription drug in these programs because pain is common with work injuries.

That’s also true for the FECA program, which according to a 2019 review of its own data has revealed “a large proportion of injured federal workers have been taking opioids chronically at varying doses for years.” One in four chronic, non-cancer, opioid claimants within the FECA study population averaged a dose higher than the upper threshold recommended by the Centers for Disease Control and Prevention.

Because powerful prescription pain killers can be risky, the program has required certain checks, like prior authorization that requires justification of the treatment by the provider to the insurance company before it is paid for. Other oversight measures include letters of medical necessity and refill limits, but the watchdog report said though policies were in place, they failed to stop unapproved prescriptions from being financed.

The report also noted that the program lacked a pharmacy benefit manager, known as a third-party administrator of drug programs that maintains approved drug lists, negotiates discounts with manufacturers and processes payment for drug claims.

The Department of Labor said in February 2021 it awarded a multiyear contract to PMSI, LLC to oversee its federal employees’ program.

“OWCP contracted with a [pharmacy benefit manager] to provide a wide collection of safeguards for our claimants. Doing so allows a broader view of the patient’s medical history and needs to ensure that all drug dispensing is in the best interest of the claimant,” the department said in a statement to Federal Times. “In addition, OWCP is expanding its clinical staff with additional doctors of pharmacy (PharmDs) and physicians (MDs) to oversee PBM operations, and the PBM is audited regularly to ensure it is processing according to the FECA program’s standards.”

Joe Paduda, president of CompPharma, a pharmacy benefit management consultancy that provided research for the OIG report, said policies cannot enforce themselves; it’s up to the organization.

“If policies could have been better or if they were not implemented correctly or if nobody checked on them, it’s not the policy or the implementation processes’ responsibility to do that,” he said in an interview.

Paduda testified before Congress in 2018 about the program’s controls being inconsistent with clinical guidelines on opioid use. In 2016, when others workers’ compensation payers were reporting decreases in opioid spending, OWCP showed it increased spending by 30%.

The latest OIG report was prompted by “concerns” raised by a spike in pharmaceutical spending by the program in 2015. It identified $321.26 million in excess spending during a five-year period.

OWCP paid for more than 98% of prescriptions for fentanyl without evidence of required cancer diagnoses.

“OWCP contracted with its bill pay vendor to provide pharmacy bill processing services for the FECA program, relying too heavily on the vendor for responsibilities related to implementing OWCP’s policy changes,” the report said. Instead, decisions were made by claims examiners, who " typically have no pharmaceutical or medical backgrounds.”

Staff shortages also contributed to improper prescriptions skating by. The program overseeing federal beneficiaries did not have a full-time medical director or pharmacist. There was also no drug-specific formal training for staff involved in claims decisions. What it did have were two physicians who split their job duties between four different programs. In 2020, one physician resigned.

The report argued that other similar programs with smaller budgets had more staff than the FECA program did.

OWCP in its response to the report said the audit was done before it had awarded a contract to fix many of the underlying issues, and therefore the report does not reflect the current state of the program.

Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.

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