Author: Joe Paduda

Aug
1

Lousy back pain care – it’s not just work comp

Posted by Joe Paduda on Thursday, August 1st, 2013 | Comments

What’s changed in treating back pain over the last decade?

More narcotics and fewer NSAIDs.  More referrals to specialists, less treatment by primary care docs.  More MRIs and CTs.  

A really illuminating article just published in JAMA provided those insights and more, concluding “Despite numerous published clinical guidelines, management of back pain has relied increasingly on guideline discordant care.”

Like 29% of patients prescribed narcotics.

In other words, more care, delivered by more expensive providers, with higher risks, despite no evidence it improves results.

Not only do we have a looooong way to go, it’s getting longer every day…

 

Jul
31

Ideological blinders, work comp, and Obamacare – part 9 of 9

Posted by Joe Paduda on Wednesday, July 31st, 2013 | Comments

We can all agree on something – No one – and I mean NO ONE – thinks PPACA aka Obamacare is the perfect solution to the health care insurance, cost, and quality mess.

Liberals decry it for the failure to offer a public option, if not a single payer.

Conservatives hate it because it represents what they see as a big intrusion into private decision making process.  The fact that PPACA closely resembles former Republican Senator Bob Dole’s plan, and one advanced by the neo-uber-right Heritage Foundation just a couple decades back isn’t enough to overcome that “negative feeling”.

Let it go, folks.

The reality is, PPACA is going to be a reality.  You can either continue to complain, or start figuring out what to do about it.  Here are a few things it would behoove any workers’ comp payer or stakeholder to get done.

  1. Get much, much closer to key providers to ensure your claimants can get access to surgery, primary care, PT and the like.
  2. Watch for changes in billing practices by hospitals who are looking to adapt to reduced Medicare reimbursement.  Expect higher prices and more services.
  3. Watch for physician practices billing as facilities, with all the additional cost inherent due to fee schedule anomalies.
  4. Monitor drug prices; as more people get coverage, manufacturers may decide they can raise prices a tad.  It happened after Part D, and it may well happen again.
  5. Add “health insurance coverage status” and the name and policy number of the insurance plan to your FNOI process; that way, if you have to pay to treat non-occ conditions, you know who to send the bill to.  As well you should.

There’s a lot of potential side effects, many of which we won’t see until several years out.  The key is to look for them, and blinders will restrict your vision such that you won’t be able to adapt and maybe even take advantages of positive side effects.

What does this mean for you?

Rewards await those who see broadly and clearly.

 

Jul
30

Obamacare and workers’ comp – Part 8 of 9

Posted by Joe Paduda on Tuesday, July 30th, 2013 | Comments

I’m thinking we aren’t going to get this done in 9 posts…but your attention span will likely wane long before we finish figuring out the impact of PPACA on work comp.  For today, we’re going to finish up on comparative effectiveness research’s (CER) impact on comp.

Yesterday’s post was a bit of a primer on comparative effectiveness research and covered the Feds’ investment in CER.  A couple colleagues scoffed at what they saw as my optimism about CER; their skepticism is well-founded.  For example, the 2003 Medicare Modernization Act prohibited CMS from restricting coverage of new medicines based on CER findings; if a new drug was only 2% as effective as an existing, cheap, generic drug in treating a disorder, too bad – we taxpayers would have to foot the bill.

Something even scarier happened a few years earlier.  A federally-funded study on low back pain study discredited some surgical procedures as first line treatment.  Seems sensical, right?  Let’s not start slicing until we’ve tried PT, muscle relaxants, maybe even rest, okay?

Not OK.  At least not OK to the North American Spine Society; these fine folks put on a full-court lobbying press that almost eliminated and ultimately defunded the Agency for Health Care Policy and Research (AHCPR).  Eventually the Agency, now known as Agency for Health Care Quality and Research, got a few dollars, but the lobbyists for the spine slicers were able to remove ‘policy’ from agency name.

This was a BIG DEAL.  Entities with “policy” in their name set policy; they determine what the government is going to do, what it will support, pay for, advocate, allow.  By excising that one word, the Agency was essentially emasculated.

Ultimately, the golden rule prevails – he who has the gold rules.

Implementing CER is going to be highly contentious, with extremely well-funded device manufacturers, big pharma, and their supporters capable of marshaling huge dollars (which, not incidentally, they got from charging consumers, taxpayers, and employers lots of money for their procedures/drugs/devices) to buy lots of access.

On the other side, we have the IPAB.

And that may well lead to a level playing field.

 

Jul
29

Obamacare and workers’ comp – part 7 of 9

Posted by Joe Paduda on Monday, July 29th, 2013 | Comments

Last week we briefly discussed a few ways PPACA may affect quality of care; this morning it’s a bit about outcomes research.

To see what this has to do with comp, skip to the last couple paragraphs below.

PPACA aka Obamacare funded the Patient-Centered Outcomes Research Institute, which focuses on research intended to help individuals determine what care is best for them, what they can do to improve their outcomes, and what they can expect given their health condition and treatment choices.  (details are here). The idea is pretty basic; to quote Sy Syms, “an educated consumer is our best customer.”  Patients who know their health conditions, understand their treatment options and the pros and cons of those options, and are able to discuss those options with their providers are going to get better care and better outcomes – defined as what is best for them as an individual.

If an individual understands the risks and potential implications of treatment options, then that individual can make the best decision – defined as what’s best for that individual.  As an extreme example, I may choose a risky and painful course of chemotherapy to treat my cancer, while you may decide that’s not for you. 

In actuality, there were a lot more funds in the Recovery Bill (remember the 2009 bill?) known as ARRA than in PPACA.  While most of that legislation was in the form of tax reductions, there was some spending on health care; specific to our discussion $1.1 billion was allocated to health research. This was split between three agencies;  $300 million to Agency for Healthcare Research and Quality, $400 million to NIH, and $400 million for HHS itself. The money has been allocated to several areas; data infrastructure, evidence generation, evidence synthesis, research and evaluation, implementation and others.  (a detailed discussion is here.

All of NIH’s and most of AHRQ’s dollars were invested in comparative effectiveness research (CER), evidence generation and translating and disseminating the findings.

Simply put, CER assesses “which interventions are most effective for which patients under specific circumstances.” NIH is looking into health care for seniors, diabetes prevention follow-up care, schizophrenia, breast imaging, chronic kidney disease, and many other conditions.

AHRQ’s work identified key gaps in evidence, found researchers qualified to fill those gaps, and funded their research. It’s hard to overstate the importance of this work; there is precious little consensus around treatment for many conditions, with wide geographic variation in treatment patterns.  The Clinical and Health Outcomes Initiative in Comparative Effectiveness (CHOICE) focuses on pragmatic research; what actually works, in real-world clinical settings.  There’s also a registry of diseases and specific medical tests, devices, and surgical procedures intended to track long-term outcomes and the viability of devices.

So, what does this have to do with workers’ comp?

There are direct and indirect impacts – for example; one of the projects funded by PCORI focused on “Long Term Outcomes of Lumbar Epidural Steroid Injections for Spinal Stenosis”; a procedure far too common in worker’s comp (if not for stenosis specifically).  Another focuses on improving primary care for back pain, a third on non-surgical treatment methods for lumbar spinal stenosis, a fourth addresses obesity care in a primary setting, a fifth evaluates the best ways to disseminate outcomes research, a sixth looks at quality metrics for medical rehab, a seventh focuses on psycho-social treatment for chronic pain…

Given the oft-heard complaints – entirely appropriate complaints – from work comp professionals about the wide variation in quality of care, over-use of surgery, inability to manage chronic pain, impact of obesity, and generally crappy medical care delivered to far too many injured workers, there’s no question the funds from PPACA and ARRA will greatly benefit work comp.

As a side note, we spend about $2.6 trillion a year on medical care in the US, and less than one-tenth of one percent of that amount on objective research to figure out what works and what doesn’t.

Is it any surprise US health care is so wasteful and screwed up?

Jul
26

Pennsylvania’s drug problem

Posted by Joe Paduda on Friday, July 26th, 2013 | Comments

The profiteering plunderers of the workers’ comp system have moved into the Keystone State, proffering their repackaged drug get-rich-quick scheme for physicians treating workers’ comp claimants.

Patient safety?  Hah!

Conflict of interest? So what!

Higher taxes?  Screw ’em!

Alas, there’s no evidence of movement on the part of PA’s legislators to address the issue, despite the public discussion of problems inherent in physician dispensing.  An article in the Philadelphia Enquirer last year noted:

“A 2007 Institute of Medicine report showed that medication errors originate most often during the medication prescribing process. At least half of these prescribing errors are detected and corrected when pharmacists review the safety and appropriateness of the medication. [emphasis added] But having the same physician prescribe and dispense eliminates that safety net before the error reaches the patient…

Don’t let advocates for doctor dispensing fool you. The potential safety issues with physician dispensing cannot be easily dismissed.”

Despite the concerns, physician dispensing is increasing in PA.  WCRI reports that a fifth of all drugs were dispensed by docs in 2010/2011, accounting for 27% of drug costs – up from 15% in 2007/2008. The price for doc-dispensed generic Vicodin went up 23% over that period – while the cost for the same drug bought at a pharmacy dropped 10%.

In all likelihood, doc dispensing now accounts for over a third of all costs in Pennsylvania, increasing employers’ and taxpayers’ costs while endangering even more patients.  

To be sure, physician dispensing advocates will trot out their hoary arguments that dispensing reduces costs and speeds return to work, tired old lies that have been exposed by the CWCI’s research proving the opposite is true – medical and indemnity costs are higher for claims with physician dispensed drugs. Unfortunately, it does not appear the industry’s shills will have to stir themselves at all, as there doesn’t appear to be much interest on the part of the worker’s comp industry or their advocates to do anything about the problem.

Perhaps when the press uncovers a patient killed by a dispensing doc they’ll decide it’s worth their time.  That will happen.

What does this mean for you?

Until then, employers and taxpayers will just have to pay more for drugs claimants may well not need at prices inflated two to twelve times.

 

Jul
25

Obamacare and workers’ comp – Part 6 of 9; quality of care

Posted by Joe Paduda on Thursday, July 25th, 2013 | Comments

Quality of care – will it increase or decrease as a result of Obamacare?

That is a major concerns among those work comp professionals tuned in to health reform, as well it should be.

For quality of care, it depends on what care you’re talking about, and how it is measured.  Compensation for primary care activities – spending time with patients discussing their condition, health status, medical options and the like is going to be compensated more richly – in some states, MUCH more richly (e.g. California). The thinking behind this is it is far better to have an educated patient aware of their treatment and prevention options, potential issues, and thereby engaged in their treatment than a clueless patient treated as a lab specimen. And educated patients may well view their care as “better” as they understand what’s happening and why; they also have better outcomes in general.

Moreover, with more covered, the health status of the population will improve (research indicates insured people are healthier than those without insurance).  If they get injured, they will recover faster with fewer complications, reducing indemnity expense as well as medical costs associated with more and longer treatment.

Quality of care for specialty services is more ambiguous.  With a reduction in Medicare (and in some states Medicaid) reimbursement for surgeries, imaging, and other procedures, providers may seek to deliver more services to work comp patients to make up for lost income.  Thus we may see more surgeries and related hospital/facility care, more scans, more tests and injections and implants and pumps.  This will lead to more expense for comp payers, and will likely be a reduction in the quality of care: delivering services that are not needed, even if they are performed at a high standard, reduces the overall quality of care.

Perhaps the most significant , and least recognized, contribution to quality of care under Obamacare is the requirement that insurers cover everyone with standardized benefit plans.

The impact of this cannot be overstated; it changes the competitive dynamic from selling insurance to healthy people who won’t have claims to managing the health risks and outcomes of everyone insured.  Insurers will have little ability to pick and choose who they cover, and their success will be based on delivering the best outcomes to their entire population.  This will force them to:

  • partner with providers on health improvement initiatives (ACOs)
  • research and implement – quickly – quality improvement initiatives
  • identify and change behaviors of unhealthy insureds

If they don’t, they are out of business.

I’ve run out of time, and likely so have you.  We’ll look into the outcomes research funded by Obamacare next…

What does this mean for you?

This is a complex and multi-faceted issue, one successful comp payers will have to monitor carefully if they are to avoid very unpleasant surprises.  

Jul
24

The Allstate – Prescription Partners suit; the details…

Posted by Joe Paduda on Wednesday, July 24th, 2013 | Comments

The big auto insurer’s civil suit against AHCS subsidiary Prescription Partners is comprehensive, thorough, and very, very persuasive.  Allstate is demanding a return of all monies paid to Prescription Partners, and a ruling preventing PP from billing Allstate going forward.

The insurer is seeking declaratory relief (a legal finding that Allstate does not have to pay bills going forward) and the return of all monies paid.  

They are demanding a jury trial; my sense is this is not just legal maneuvering, but intended to make a clear, very loud, and very public statement.

Allstate’s attorneys have done their homework.  The suit filed in Federal District Court lays out a detailed description of exactly how and why Prescription Partners, a “technology” company, has no legal standing to bill an insurer for drugs.

Prescription Partners/AHCS pays the physician 70% of the amount it expects to bill the insurer, keeping 30% for itself.  Remember, this is based on the price for a repackaged drug, an issue specifically addressed in the suit

“Michigan courts have stated explicitly that “medical care providers are prohibited from charging more than a reasonable fee…Prescription Partners appears to have charged Allstate the national average wholesale price (AWP) for repackaged drugs…[the]repackaged AWP for drugs is substantially higher than the amount charged by local Michigan pharmacies from which insureds can also receive prescription medication…The repackaged AWP is also significantly higher than the original drug manufacturer AWP...it is clear that the charges submitted by Prescription Partners using the former are grossly inflated and do not constitute a “reasonable” charge. [emphasis added]”

The documents cite several specific drugs with prices 70% to 1200% of the original un-repackaged drug, and include an AHCS price list in the Exhibits featuring a column showing the doctor their “guaranteed profit”, as well as a listing of each claimant, the amount billed, and the original manufacturer’s AWP.

That exhibit alone is worth the price of downloading the entire filing.

More, much more, to come.

What does this mean for you?

At last, the insurance industry steps up to take on the physician dispensing industry.  One wonders where the workers’ comp insurers are, as they’ve been victimized by the industry for years…

Jul
23

Allstate sues AHCS subsidiary Prescription Partners

Posted by Joe Paduda on Tuesday, July 23rd, 2013 | Comments

Allstate Insurance has filed suit in Federal Court against Prescription Partners, the billing entity owned with Automated Healthcare Solutions.

The suit was filed in the Eastern Michigan Federal District Court; here are a couple of the more salient assertions in the suit:

4. Allstate seeks a declaration that it is not obligated to pay any claim for PIP benefits submitted to it by Prescription Partners, including pending claims in excess of $81,021.

5. Allstate further seeks restitution from Prescription Partners in the amount by which Prescription Partners has been unjustly enriched, an amount in excess of $25,085.

6. Prescription Partners does not provide any products, services, or accommodations relative to an injured person’s care.

7. Prescription Partners is not a healthcare provider and does not in any way treat injured persons…

10. Prescription Partners’s actions in this regard are both not permissible under the clear language of the No-Fault Act and are violative of the purpose and goal of Michigan’s No- Fault Act.

11. By this Complaint, Allstate seeks a declaration that Prescription Partners has no right to submit such claims to Allstate and that Allstate has no obligation to pay claims for PIP benefits made by Prescription Partners.

Sources indicate there are several other large auto insurers tracking this case closely; other legal action may be in the offing.

The case is focused on Prescription Partners’ alleged activity related to Allstate’s auto insurance business in Michigan. Unlike every other state, Michigan has unlimited medical benefits for those injured in auto accidents.  This make it a very attractive target for physicians dispensing drugs, as there are no limits on the insurers’ liability.  Interestingly, there is somewhat less interest among physicians in dispensing to auto claimants in other states, where maximum medical benefits may be as low as $5000 or $10,000.

Jul
23

Medicare-based fee schedules and work comp

Posted by Joe Paduda on Tuesday, July 23rd, 2013 | Comments

Medicare bases the physician fee schedule, known as RBRVS, on estimates of how much time it takes docs to do specific things, plus their operating expenses adjusted for regional cost factors.  That’s a gross oversimplification but close enough. (more on the details of the price-setting process is here.)

Turns out the time estimates are (generally) way overstated, resulting in higher compensation for docs, higher costs for taxpayers, and a whole raft of downstream unintended effects – including higher costs for work comp payers.

The AMA’s Resource Based Relative Value System Update (RUC) Committee actually does the estimating.  According to a great piece in the Washington Post, “the AMA’s estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent [emphasis added]…If the time estimates are to be believed, some doctors would have to be averaging more than 24 hours a day to perform all of the procedures that they are reporting. This volume of work does not mean these doctors are doing anything wrong. They are just getting paid at the rates set by the government, under the guidance of the AMA.”

Who sits on the committee was essentially a secret until a couple years ago, when the Replace the RUC Committee published the names of Committee members, along with their potential conflicts of interest.  Pretty scary reading.

The AMA RUC committee’s estimates come from surveys of physicians, who are explicitly told the surveys are used to set payment levels.  Shockingly, their estimates are seven times more likely to raise the estimate of time required than to lower it, making medicine the only industry that has gotten less efficient over the past decades.

I’d be remiss if I didn’t acknowledge that experts including Brown University’s Dr Roy Poses have been on the RUC story for years; Here’s one of his gentler statements:

The RUC seems to embody a corporatist approach to fixing prices for medical services to create perverse incentives for physicians to do more procedures, and do less conversing with and examining patients, examining the best clinical research evidence about their problems, and rigorously thinking about how best to help them.  More procedures at higher prices helps physicians who do procedures.  It may help even more the corporations that provide the devices and drugs whose use is necessitated by such procedures, and the hospitals who can charge a lot of money as sites for performance of procedures.

Impact on workers’ comp

Of the 33+ states with fee schedules for physicians and other providers, all save one – California – use RBRVS as the basis, and California is adopting RBRVS.  The RUC’s time estimates have resulted in estimates that are often twice the actual time it takes to perform a procedure.  Significantly, the Post article cited orthopedics as one area where time estimates are particularly generous.

It is important to note that CMS sets the dollars per time unit, so the ultimate cost is partially based on that as well as the AMA’s time estimate.  But there’s no getting around the AMA’s RUC is inflating the time, and thereby inflating their members’ income, and employers’ and taxpayers’ work comp costs.

Kudos to the WaPo for their terrific investigative reporting, and to Roy Poses for being on top of this for years.  

What does this mean for you?

A deeper understanding as to why our health care system is – by far – the most expensive in the known universe.

Jul
19

AASCIF – report from the annual conference

Posted by Joe Paduda on Friday, July 19th, 2013 | Comments

If you’re going to have a conference in Austin Texas in July, you’d best make sure there are lots of things to do, excellent speakers, and a great staff.

Texas Mutual, host of this year’s AASCIF annual conference, got it done.

Unlike many WC industry conferences, AASCIF devotes much of the time to social/networking events. The most-common complaint about most conferences, that there’s not enough time to just talk with others in the industry, wasn’t an issue in Austin.

The speakers were mostly not workers’ comp focused, instead providing insights into leadership, communications, management, and marketing. (I was one of the only work comp speakers, thanks to the folks at Claim-Maps for sponsoring my talk) And therein lies a message for conference planners, those considering attending conferences, and the work comp world in general; There’s a great big world out there; show it to us.

One of the best speakers I’ve ever watched/experienced/heard is Erik Qualman, he of Socialnomics fame.  While most workers’ comp payers look at social media only as a way to find pictures of claimants doing things they say they can’t, Qualman got many thinking of what they’re missing by not fully engaging with social media.

The social-media-as-fraud-detector is tip-of-the-iceberg stuff; social media is becoming the dominant means of communicating with customers, prospects, influencers, and media, supplanting traditional channels or perhaps more accurately, supplementing and leveraging them.

As most insurers and suppliers are run by us old guys, that shouldn’t be surprising; however a VERY few companies have embraced social media for other, more positive reasons, and they are going to reap huge rewards.

A couple examples…(the fact that there aren’t dozens tells us something…)

Marsh – smart enough to steal Mark Walls and the 10,000+ LinkedIn folks on his Work Comp Analysis Group from Safety National, they got themselves a huge footprint, a great brand, and a positive image just by hiring Mark.  Kudos to SN for allowing Mark to build the group; that said they really didn’t take advantage of what he’d done, and not seeing the potential benefit for their brand, their company, and their business was a huge miss.

State Fund of Minnesota’s Mike Happe was an early adopter of Twitter, has several hundred followers, and gives his employer a presence they otherwise wouldn’t have. Mike’s involved in about a dozen groups on LinkedIn, and he’s one of the very, very few insurance execs with a Twitter.

Bob WIlson, Peter Rousmaniere, and Jody Thompson did a great survey of social media in workers’ comp earlier this year; the detailed report is available here. Get it, read it, and get going.

What does this mean for you?

For anyone who thinks this isn’t worth doing, you may want to consider what you’re reading right now, how you learned about this blog, and how the author ended up speaking at AASCIF…

Because your competitors are.