Amid increasing nationwide demand for drug testing to ensure workers compensation claimants comply with prescribed narcotic regimens and don't misuse their medications, questions are surfacing about the testing industry's business practices and ethics.

The recent questions raised by workers comp experts about the urine and blood testing laboratories are ones that employers seeking their services also should be asking, observers say.

Drug-testing companies provide their services through medical providers, including those treating workers compensation patients who are prescribed narcotics because of the nature of work-related injuries, sources said.

But the Oakland-based California Workers' Compensation Institute is expected to release results as early as this week from a study seeking to answer whether skyrocketing demand for drug testing is a new workers compensation system “cost driver,” said Alex Swedlow, CWCI's executive vp-research.

“The level of utilization and costs (of drug testing) have been increasing at a viral-like rate,” Mr. Swedlow said. “The preliminary numbers that we are seeing validate that the number of tests and dollars spent on these tests are growing at a very, very significant rate.”

Meanwhile, the workers comp system lacks protocols for the testing of narcotics, Mr. Swedlow said. “There is no guideline, no acceptable standard, no rationale for when and how and what to test for,” he said.

But drug-testing companies and other testing advocates say prescription-compliance monitoring helps assure that patients in and out of the work compensation system consume addictive pain medications as prescribed for them rather than divert them into the black market.

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Testing also helps discourage drug misuse or abuse, such as doctor shopping for multiple prescriptions, and is a “best practice” to ensure patients' well-being, they say.

“Monitoring these medications through urine drug testing is part of the clinical guidelines recommended by the American College of Occupational and Environmental Medicine and Official Disability Guidelines,” among other organizations that develop practice guidelines, said Dr. Harry Leider, chief medical officer for Baltimore, Md.-based Ameritox Ltd., a drug-testing company. Ameritox offers a program to help identify workers comp claimants who should be candidates for the testing, Dr. Leider said.

Interest in claimant drug-testing services among insurers, third-party administrators, managed care companies and self-insured employers has grown within the past two years as they seek to determine which claimants might benefit from the testing, said Jennifer Kaburick, director of workers comp product management for St. Louis-based Express Scripts Inc.

“We see (that) discussed more frequently,” Ms. Kaburick said. “Our clients discuss it with us as a tactic they are using to help control and manage the use of narcotics. It's an opportunity for them to validate that either the person is taking the medication at dosages that are being prescribed or they are not.”

Payers can then use that information in discussions with claimants' doctors, Ms. Kaburick said.

Interest in testing injured workers for drug-regimen compliance has followed in the wake of U.S. government reports released in the past year about skyrocketing pain-medication use and abuse among the nation's population.

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Ironically, while those reports focus on prescription use among the general population, narcotics have been commonly prescribed for injured workers for years because workplace accidents often cause painful injuries, Ms. Kaburick said.

Some payers also have grown interested in prescription-compliance monitoring because narcotics account for a substantial portion of workers comp medical expenses, sources said.

Simultaneously, more companies are entering the drug-testing field, and more drug-testing labs are seeking to service the workers comp industry.

“They have certainly marched into comp and said, "Our services are needed here and underutilized and how can we grow our business through the comp channel?'” said Ron Skrocki, vp of product management and development for GENEX Services Inc., a Wayne, Pa.-based case-management company.

But some major testing laboratories are themselves raising questions about industry practices in lawsuits against one another. Ameritox Ltd. and San Diego-based Millennium Laboratories Inc., for example, are enmeshed in lawsuits against each other over issues such as their use of science, ethics questions, and business practices used to attract doctors' business.

Some labs have provided doctors with revenue for patient referrals, while others have coached doctors on how to increase their revenue with schemes such as “up-coding” billing practices, sources said.

Such practices have led GENEX to question several lab companies about their business models, ethics, and strategies for attracting new business, said Mr. Skrocki. The vetting has been part of GENEX's search for potential business partners. “We want (partners with) a clean and defensible and fully transparent business model,” Mr. Skrocki said

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GENEX also has questioned labs about their workers compensation expertise, their service quality, their technological abilities and their scientific approaches.

“That has been interesting for us, to assess what they say they have against what they (actually) have,” Mr. Skrocki said.

Employers seeking the services of drug-testing labs will want to raise similar questions, he said.

“Any of that is something you need to make sure of if you are looking at any of these companies,” Mr. Skrocki said.