An article in Physicians News yesterday suggested providers look to workers comp to make up revenue losses from Medicare and commercial payers’ declining reimbursement. That wasn’t stated explicitly, but you don’t have to be a code-breaker to get author Franklin Rooks’ message.
Rooks’ main point appeared to be for physicians to think carefully before agreeing to work comp PPO contracts. Can’t disagree with that, but I do take exception to the several statements which are the basis for his arguments.
As Rooks cited me in his piece, I posted a comment, which is excerpted below.
1. The article stated “Employer direction of medical care tends to erode workers compensation reimbursement to levels below the state fee schedule.” without providing any data or backup whatsoever to support this assertion. Physician News’ editors should have caught this.
In fact there is ample evidence from multiple sources that there are many factors impacting reimbursement, with market concentration of providers and the relative level of workers comp fee schedules [compared to other payers’ reimbursement amounts] chief among them.
2. The article cited the recent effort by Florida’s legislature to ban egregious over-charging for physician dispensed medications. As readers know all too well, in Florida, physician dispensing of medications to workers comp patients has increased employers’ costs by over $60 million with no benefit to injured workers. Data from several sources indicate physician dispensing adds over a billion dollars to the national workers comp tab, again with no discernible, demonstrated benefit to patients. There is, in fact, a critical issue of patient safety in the practice of physician dispensing, as work comp physicians often do not know precisely what medications the patient is taking, and therefore cannot be sure there are not potentially hazardous drug-drug interactions.
I’d also note that workers comp is NOT intended to be the payer used by physicians and other providers seeking to make up for lost revenue from other sources. Mr Rooks’ unstated but clearly intended message is for providers to seek the most reimbursement possible from comp to compensate for declines in other sources.
That is inappropriate and unethical.
Thanks to Sandy S for the head’s up.
May
17
I’ve worked on both sides of this fence. Currently, I am the Practice Administrator for a physician practice that treats injured workers. I also have 15+ years experience working for managed care companies (I developed workers’ comp networks).
The states that allow the injured worker free choice of provider have huge problems with unethical providers who attempt to ‘milk’ the system and injured workers’ who never seem to be able to go back to work.
However, I agree with author Franklin that the PPO networks bring little value to the table. There a many knowledgable adjusters and case managers who direct to physicians and other providers who are known for providing quality care. They would direct to that provider whether he (or she) was being paid 100% of the state fee schedule or 90%.
Workers’ Compensation is a good book of business for providers in this current environment of decreasing reimbursement from other payers sources. However, it requires that physicians do what they do best, provide quality, compasionate medical care.
Regarding the comment that “to seek the most reimbursement possible from comp to compensate for declines in other sources….is inappropriate and unethical”
Health care is a business. As a business matter, there is nothing wrong or unethical by seeking out payors with higher margins. Providers are not creating new workers compensation cases. They already exist. There is nothing unethical about capturing that line of business.
As far as the contention that employer direction of care erodes workers compensation reimbursement to levels below the state fee schedule and Mr. Padua’s comment that this is unsupported, consider Mr. Padua’s own blog. His blog contained the following passage in regard to Pennsylvania’s State Workers Insurance Fund (SWIF). “MedRisk reduced SWIF’s medical payout by $28.9million below fee schedule from January 2009 to December 2012” https://www.joepaduda.com/archives/002265.html I think this speaks for itself.
My response to Mr Rooks’ comments.
1. Regarding the comment that “to seek the most reimbursement possible from comp to compensate for declines in other sources….is inappropriate and unethical” Health care is a business. As a business matter, there is nothing wrong or unethical by seeking out payors with higher margins.
Mr Rooks misses the main point of my statement, which is “to compensate for declines in other sources” – going after higher margin business is fine, but shifting costs to employers to make up for under-reimbursement from other payers is indeed unethical.
2. re “Providers are not creating new workers compensation cases. They already exist.” Mr Rooks is evidently not aware that providers do “create” work comp cases. Unfortunately this is all too common particularly with back injuries and repetitive stress diagnoses; see the Illinois prison guard scandal for just one example.
3. Mr Rooks confuses correlation with causation in his statement ” employer direction of care erodes workers compensation reimbursement to levels below the state fee schedule and Mr. Padua’s [sic] comment that this is unsupported, consider Mr. Padua’s [sic] own blog.” Rooks’ noted in his article, there are indeed operational networks in all states, direction and non-direction, and all have reimbursement under FS/UCR/billed charges or some combination of these. There is no evidence of any deeper discount in states with direction v those without; provider market concentration, fee schedule levels, organized labor penetration, managed care market penetration, and provider specialty density are all factors that may have equal or greater influence on actual paid amounts.