Year: 2016

Apr
25

Monday catch-up

Posted by Joe Paduda on Monday, April 25th, 2016 | Comments

Happy Monday! here’s a few items you may have missed.

King v CompPartners – the California case may have implications for UR, IMR, and the “exclusive remedy” foundation of worker’s comp.

Here’s a very brief summary (see url above for more detail).

  • The underlying issue – did CompPartners’ UR reviewer do the right thing? is not in question.  The treating doc’s request was appropriately rejected as it was inconsistent with California’s evidence-based treatment guidelines.
  • However, the patient allegedly suffered seizures due to sudden cessation of the medication, and contended that the UR physician had a “duty of care” to inform the patient of that risk and recommend a weaning process.
  • The plaintiff took the case outside the work comp judicial process to civil court, where he lost.  It then went to Appellate Court, where the ruling raised this “question”: could Utilization Review be considered medical treatment, and the reviewer a treating provider?
  • This is contrary to all work comp precedent; the case is now before the State Supreme Court, which has stayed the Appellate Court’s ruling pending a decision.

Implications – talking to those who know better than I, the Supreme Court will likely reject the Appellate Court’s validation of civil court as an appropriate venue for the case, thereby reaffirming the “exclusive remedy” inherent in workers’ comp.

One issue that strikes me about this case; as the medication in question was prescribed by a physician for a condition deemed not covered by workers’ comp, why did the patient not a) pay for the medication himself or more likely b) get his health insurer to cover the script?

This would have allowed the patient to continue taking the drug and avoid the health issues experienced by the patient allegedly due to suddenly stopping the medication.

If you are in ChicagoLand and/or looking into value-based networks, read this. Really interesting piece on how a big provider system thinks about narrow networks, contracting, and what it wants to get paid for high-end services.  And will “eat” on commodities, such as MRIs for $100.

Here’s a shocker – media is all over reports on how chocolate helps athletes – even if the underlying study is pretty much nonsense. A much more important study that determined a very common spinal procedure is fraught with danger and likely counter-productive – was all but ignored.

From HealthNewsReview:

“Provocative discography” is a diagnostic procedure that’s used up to 70,000 times a year in the United States at great cost to the health care system. It’s commonly performed on patients with so-called “degenerative disc disease” who are considering spinal fusion surgery — a $40 billion per year industry”

If you have to rely on MCM to hear about critically-important research, there’s something really wrong with the mass media.

Looking forward to NCCI next week; will be on a panel moderated by Peter Burton with Mark Walls and Bob Wilson discussing regulatory issues.

Hope to see you there.

Apr
21

Spring in Health Wonk Land

Posted by Joe Paduda on Thursday, April 21st, 2016 | Comments

Thanks to Peggy Salvatore of Health System Ed for hosting this week’s Health Wonk Review – great graphics coupled with quick synopses make for a readable and entertaining edition indeed.

One don’t-miss is Dr Bradley Flansbaum’s piece on his history with the pharma industry. Pretty compelling stuff and especially enlightening for those of us without direct experience similar to Dr F’s.

Apr
19

ACA’s 20 million increase in insureds – implications for workers’ comp

Posted by Joe Paduda on Tuesday, April 19th, 2016 | Comments

That’s a bit of a misstatement; ACA alone is not responsible for increasing the number of insureds by some 20 million, but there’s no question it was the primary causal factor.

Be that as it may, let’s examine who the newly-covered are, what they do, and where they reside.  The insured population’s demographics may be of interest to workers’ comp payers.

As noted yesterday, the newly-insured population is poorer, more likely to be recent immigrants, and much more likely to be Hispanic than the rest of the country. For work comp, what may be of more interest is the jobs they hold and where they live.

First, the percentage of part-time workers insured rose by 5.8 points, while the full-time population’s coverage went up 2.8 points. Those concerned with so-called Monday-morning injuries, may see this as a plus for work comp as more working people have insurance to pay for non-occ injuries.

Next, what do these workers do?

Pretty much everything; of particular interest to the work comp community, several high-severity &/or high-frequency industries saw significant jumps in the percentage of workers with health insurance. (details below)

  • agriculture +5.4%
  • construction +4.7%
  • transportation/warehousing +4.0%
  • manufacturing +3.3%
  • natural resources + 3.9%

Why is this important?  A few reasons.

Insured people are healthier than the uninsured, so they will heal faster if they do get injured on the job.

Work comp payers won’t have to foot the bill for medical conditions non-occ-related for insured workers.  This isn’t the case for claimants who do not have health insurance; actually work comp payers technically don’t need to pay for non-occ conditions, but end up paying for those conditions if by so doing the claimant gets better faster.

Monday-morning injury frequency may be reduced (if it is a real problem and not just commonly-accepted wisdom).

(chart below from NYT article)

Screen Shot 2016-04-19 at 12.33.44 PM

I bring this to your attention, dear reader, because clients, friends, and all manner of industry folk are keenly interested in the “impact of ACA on work comp.”  Fact is, we don’t know what it will be, but we can prepare if we look closely at what’s happening and make some educated, experience-based guesses.

What does this mean for you (work comp payers)?

A long term and incremental plus…perhaps.

Apr
18

ACA – who’s covered now and why it matters

Posted by Joe Paduda on Monday, April 18th, 2016 | Comments

20 million more Americans are covered today than were pre-ACA.  ACA’s insureds are poorer, more likely to be recent immigrants, and much more likely to be Hispanic than the rest of the country.

And for many, their new coverage is the first time they’ve had the “luxury” of insurance. They aren’t scared when a new pain or malady erupts, moms not terrified when a child wakes up with a fever, dads not losing sleep wondering how to pay the doctor’s bill or buy the insulin.

The disparity in coverage between and among ethnic groups, while still present, is narrowing – although black Americans would be doing much better if many didn’t live in states that have refused to expand Medicaid.

Make no mistake, this is very, very big news.

Beyond the much better life for the newly-insureds, the economic and long-term economic impacts are strongly positive.

Identifying and helping at-risk members is the top priority for health plans, community health centers (serving a large portion of the Medicaid community) and ACOs.  The more these providers are able to reduce the severity of chronic medical conditions, the lower their costs will be.  And the healthier, and more productive, their members will be.  And the more they will produce, and the more taxes they will pay.

ACA’s success will be measured over the long term.  Reducing unpaid ER visits reduces hospitals’ costs.  Preventing amputations and blindness among diabetes patients, cuts treatment costs and increases productivity. Keeping Americans healthier decreases first-year costs for Medicare recipients.

Despite the good news, there are two ongoing, knotty, closely-related and so-far unsolved issues. First, premiums in some areas are still too high to be “affordable”. Notably, that’s particularly true in non-Medicaid expansion states, but they’ll come along eventually (although far too late for many of their poorer residents, who will suffer needlessly while pols demagogue).

Second, many plans come with high deductibles, making routine care still problematic for poorer members.

Both will be addressed by health plans fighting for members – their survival, growth, and profitability demands it.

It won’t be tomorrow, and it won’t be pretty; remember we are fixing a broken industry that accounts for almost a fifth of our GDP. Networks will narrow, vertically-integrated delivery systems will get way more efficient, new models will emerge, and the health care system of 2021 will look a lot different than the one we have today.

Tomorrow, a deeper dive into who’s covered now and an examination of the potential impact on workers’ comp.

 

Apr
14

The impact of provider consolidation

Posted by Joe Paduda on Thursday, April 14th, 2016 | Comments

Hospitals, health care systems, large multi-specialty groups – all are getting bigger by buying each other, merging, or snapping up smaller hospitals and physician practices. Providers smart/fortunate enough to be inside these mega-systems enjoy pricing power, strong brand recognition, and the negotiating leverage that goes with that.

Deal sizes are getting exponentially larger; a study by Deloitte indicates the average deal was $42 million in 2007.  Six years later, the average transaction was more than 4 times larger. Two were over $4 billion, and that was way back in 2013.

Last year, 940 transactions closed at a total value of $175 billion.  And it’s not just the mega-mergers that are influencing care delivery and pricing.  Small, “under-the-radar” deals are proliferating as those on the outside increasingly scramble for the crumbs.  Providers unable to join the big plans are pursuing out-of-network services, servicing smaller insurers, and trying to figure out how to remain viable.

Chicago is one such market; already quite consolidated, two of the largest systems, with over 6000 medical providers between them, are fighting to merge despite the Feds’ efforts to keep them apart. These mergers are increasingly coming under scrutiny from both federal and state regulators, as evidence suggests costs in “consolidated” regions are higher than in non-consolidated areas.

Meanwhile, DuPage Medical Group hasn’t been sitting by, closing 16 transactions that doubled it in size to 500 doctors. According to the NYTimes, “many of its acquisitions barely register — eight specialists last month, two small physician groups in February, a handful of doctors joining at a time. But it has been enough that DuPage now has ambitions of going national. Late last year, it teamed up with a private investment firm to provide it with $250 million for its goal.”

This is common everywhere; from Boise to St Louis to Boston to North Carolina providers are joining together, shifting the map or providers from one of thousands of tiny dots of ink to ever-growing Rorschach blotches.

What does this all mean for work comp?

Work comp is a tiny but very profitable line of business – so networks have limited bargaining power.

Prices are considerably higher in highly-consolidated regions; payers that don’t have contracts with the mega-systems must rely on non-contractual ways to address prices and utilization. This is particularly true in the South.

Where your patients get their care matters; a visit to a hospital-based provider costs about twice what the same visit to a privately-employed physician. Employer direction, soft-channelling, and variations thereof are key.

Tracking prices is key; make sure your internal analysts and external vendors are on top of the latest information on service prices.

Most importantly, factor outcomes into your evaluations.  Often the lower cost provider also delivers better outcomes; less use of opioids, better surgical results, faster return to functionality.

This last is key; price is easy to track and report. Outcomes are not.  Yes it’s hard; and yes it’s vital.

 

 

Apr
12

Why be a crook when you can be a dispensing doc?

Posted by Joe Paduda on Tuesday, April 12th, 2016 | Comments

WCRI’s latest report on physician dispensing confirms what we weary soldiers have known for years; the physician dispensing industry is way better at figuring out how to screw employers and taxpayers than workers’ comp payers and regulators are at stopping them.

We’ve tried eliminating the upcharge for repackaged drugs; they came up with custom-manufactured medications.

Fail.

Here’s the summary from WCRI:

the mechanism involves the creation of an opportunity to assign a much higher AWP to these new-strength and new-formulation products. Consider cyclobenzaprine HCL (a muscle relaxant), for which the most common strengths are 5 milligrams and 10 milligrams. If a new strength of 7.5 milligrams comes to market and the original manufacturer of that new strength sets a new AWP, this AWP could be much higher than the AWPs set by the original manufacturers for the existing 5- and 10-milligram strengths. These new strengths and formulation, almost all dispensed by physicians, are labeled as drugs made by generic manufacturers, not repackagers, and therefore, are not subject to the new reimbursement rules targeting physician-dispensed repackaged drugs.

Shockingly, Florida and California, two states that have attempted to control doc-dispensed drug costs with a repackaged drug cost cap have seen these “new” drugs become the most popular versions of the drug – and the most costly, with an average price of $3.01 per pill compared to $0.38 for the “regular” formulations.

Why has this 7.5mg version become so popular?

Is it better than 5mg or 10mg versions?

Of course not.

Make no mistake, these dispensing docs – and the industry that supports them, are quite clear about the money.

Proof.  More proof. And even more proof.

WCRI used data from 2 years ago; if anything it’s way worse now.

The solution is both simple in concept and difficult in execution.  Enable employer direction to pharmacies, a situation that currently exists in NY and MN (and in some cases in CA as well).

Yes, limiting doc dispensing to the first few days helps – legislation in IN and PA has been quite helpful in limiting the shameless profiteering of corrupt docs. However, the dispensing industry is quite creative in coming up with ways to circumvent regulations; don’t be surprised if:

  • docs rent a corner of their office to a “pharmacy”, and/or
  • docs get ownership in a pharmacy down the hall, and/or
  • companies are setting up vending machine-like dispensaries in medical office buildings

In fact, these all – and likely other maneuvers – are already operating in many states.  As I noted a year ago, these bad actors “will find any loophole, whether in a states’ pharmacy licensing process, medical board regulation, work comp statute or scope of practice to find a way to continue screwing employers and taxpayers.”

Because that is precisely what they are doing.

What does this mean for you?

It is long past time to stop playing nice.

Apr
8

Health insurance, DOS, and Apple

Posted by Joe Paduda on Friday, April 8th, 2016 | Comments

Between a seeming inability to design a benefits plan that fits on one sheet of paper, a refusal to actually explain those benefits in terms normal humans can grasp, network arrangements that only a provider relations expert can understand, and a “explanations of benefits” that are dense and stuffed with jargon, health plans are way out of touch with consumers.
It doesn’t have to be this way.

If there’s one service that should be simple, easy to understand, and approachable for everyone it is health care.  What do I pay, where can I go, who do I have to call.

Health plans could learn a lot from the computer industry.  We old folks remember when only pocket-protector-people used computers; remember those big rooms with rows of metal boxes fronted by blinking lights and whirring tape drives? Those blue boxes were connected to green screens in the sea of cubicles outside the “computer room”, screens with horrible resolution requiring users to know what each of the dozen(s) of Function keys did and why.

The geniuses at Microsoft made computing much more user-friendly with Windows – and the PC industry exploded.

Then Apple got serious, designing their hardware and software around the non-nerdy user.  Macs were simple enough for schoolkids to use, and eventually even their parents got comfortable with Macs and PCs.

Now it’s smartphones, Siri, and google maps.  We don’t have to know anything about programming, or APIs, or backslash v frontslash.  The technology does it for us.  And “it” is pretty much everything.  We know the weather in Philly, score of the hoops game, whereabouts of our kids, monthly sales figures, meeting schedule for next week, and anything and everything else – instantly and in a format we grasp intuitively.

Which leads us back to health care.  Insurers and health plans need to take a lesson from Apple and Google; people want good health care that’s easy to access and fits their unique needs. They do NOT want to wade thru fine print stuffed with SAT-test words and jargon that’s murky at best. Blaming the consumer for misunderstanding a benefit plan is just nuts; write the plan so it’s understandable for everyone.

Give them the tools they need to use your health plan, tools that adapt to the consumer and their situation.  Tools that are intuitive, accurate, and user-friendly.

It’s long past time to scrap the “green screen” approach to health benefits.

What does this mean for you?

Some health plan(s) will figure this out.  And they will do very, very well.

Apr
7

Opioids to ACA enrollment; HWR covers it all

Posted by Joe Paduda on Thursday, April 7th, 2016 | Comments

thanks to Jaan Sidorov and his latest edition of Health Wonk Review, you get all the latest and most important health info in one spot – here!

Don’t miss Roy Poses’ discussion of Purdue Pharma execs’ punishment.  Such as it was…

Apr
7

Making work comp services more “efficient”

Posted by Joe Paduda on Thursday, April 7th, 2016 | Comments

That is the reason there’s been so much investor interest in workers’ comp – we are the epitome of the “yellow sticky” business…

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Workarounds abound, driven by individual adjuster’s requests, insurer system limitations, ever-changing state requirements, unrealistic-but-nonetheless-mandatory employer demands, and system “upgrades” that eliminate prior changes built specifically to accommodate a specific customer.

A couple examples…

Some state regulations require insurers to allow physician dispensing of drugs only within seven days of the date of injury. This requires the payer, Pharmacy Benefit Manager, bill review processor, and adjuster to have a “counter” to make sure they aren’t approving/allowing/paying for doc dispensed drugs they shouldn’t be. Data feeds have to be designed and built and tested, new fields added, new alerts coded, and staff trained and monitored and QA processes developed.

Or, more likely, put a yellow sticky with “do not pay Doc Disp Rx w/i  DoI” on that computer.

A large employer’s risk manager does NOT want Dr Awful to perform any Independent Medical Examinations (IMEs).  The employer TPA has to ensure its adjusters never use Dr Awful.  The adjuster that usually handles that employer’s claims is out on maternity leave, and somehow their replacement is supposed to KNOW this, perhaps by puzzling thru the SLAs (Service Level Agreements), reading the special handling instructions, or asking their manager.

Or, more likely, just put a yellow sticky with “DO NOT USE DR AWFUL FOR COMPANY X’S IMEs” on that computer

Pretty soon you get a cube that looks like our photo above.

Our industry is seen – rightly so – as horribly inefficient, ripe for automation, desperate for change. It is also inherently un-automatable, for several reasons.

First, it’s a state-driven system.  And when you’ve seen one state, you’ve seen one state.  Fee schedules, billing rules, employee direction to preferred providers, clinical guidelines, utilization review, state forms, dispute resolution processes, documentation requirements, all vary from state to state, and are constantly changing.  It’s just very, very hard to stay on top of these changes, figure out how to implement them, and also educate adjusters, clinical staff, bill processors, employers, lawyers and patients.

Second, payers chronically under-invest in technology, so even if the vendors have this whiz-bang terrific artificially intelligent tech platform, chances are pretty good they are trying connect with a payer just a generation away from the green screen era…if they ever left it.

Third, TPAs and service vendors have gotten very good at figuring out how to jury-rig their platforms and workflows to accommodate demanding customers.  It’s a hyper-competitive business; it’s either accommodate or lose the business.  Often it comes down to Martha or Mike in operations knowing that Fred the adjuster wants his reports on pink paper on Tuesdays and purple on Wednesdays.  And if that’s what Fred wants, that’s what you need to give him to earn – and keep – his business.

What does this mean for you?

Smart people who really understand the business can find lots of ways to do things more efficiently, increasing performance while stripping out cost and eliminating errors. However, if one doesn’t really understand the business, making things more efficient may well disrupt and break processes put in place because customers want and need them to work that way.

Apr
6

Highlighting the lowlifes – Real investigative journalism looks into workers comp

Posted by Joe Paduda on Wednesday, April 6th, 2016 | Comments

Finally.

Investigative journalists are catching on to the widespread, rampant abuse of work comp by unscrupulous “doctors” and scam artists who’ve figured out it’s easy to make bank by cheating employers and taxpayers out of their workers’ comp dollars; and a whole lot less risky than taking on Medicare or Medicaid.

Christina Jewett’s series in Reveal highlights the lowlifes in California who’ve made millions filing fraudulent claims for non-existent medical conditions attributed to both real and imaginary patients. Comparing work comp fraud to Medicare, Jewett cites the relative ease and low risk inherent in cheating workers comp compared to the higher risk, harsh penalties, and Federal investigative muscle confronting would-be Medicare fraudsters.

The list of scams won’t surprise anyone who’s been in workers’ comp; fake diagnoses used to justify procedures that never happened; non-existent medical providers billing for services never delivered to claimants; claimants subjected to surgeries for conditions they never had.

Nauseating indeed, if for no other reason than we’ve seen it all before so many times.

Another “area of opportunity” for profiteers looking to shake the work comp money tree is the air ambulance industry. A recent Nightline story shines a very bright light into the very cloudy world of “life flights;” families bankrupted, insurers bilked, and employers stuck with bills for “life-saving” flights for patients whose lives were not in imminent danger.  Last summer, James Laughlin reported there were over five hundred fee disputes between comp payers and air ambulance companies in just one state – Texas.

I applaud Nightline, Jewett and the Center for Investigative Reporting for their diligence.  It’s remarkable how real journalists can help focus public attention on what’s really wrong with workers’ comp.

Michael Grabell and Howard Berkes could learn a lot from Nightline and Ms Jewett.