Big doings at work comp physical medicine management firm MedRisk.
(MedRisk has been a client for over a decade)
Most significant, MedRisk is likely now the largest firm in the sector, passing OneCall’s Align Networks in total revenue. Two factors driving this result; Align dropped the ball on customer service, and MedRisk upped its game considerably.
As I wrote last year,
For years, [MedRisk] had the niche almost to itself, focusing its sales and service attention on corporate buyers. Along came Align Networks, a start-up that concentrated on the desk-level user, delivering stellar service to each and every adjuster and case manager. Align was quite successful, eventually becoming the largest vendor in the PM management space.
A misstep by MedRisk helped Align. Some years ago, MedRisk chose to outsource key functions, including some aspects of IT, billing, and outbound call center functions including patient scheduling. This did not go well, and the resulting dissatisfaction among desk-level users led some customers to switch from MedRisk to Align.
Confronted with the loss of business, MedRisk got back to basics. The lesson was apparent; a dramatic change in customer service was critical. That involved a major shift in understanding about the central importance of the desk-level customer, the provider and the patient, and a recognition that those customers required, above all, personalized service.
MedRisk’s results prove the back-to-basics approach worked; the company has taken major market share from Align, and continues to add new business. Operations expanded, and the company had to lease new space to accommodate the hundreds of new workers.
Now, One Call is all-in on a technology solution, investing millions in a customized application intended to deliver on the “One Call” promise (currently the seven different services offered by OCCM have separate systems and processes). “Polaris” is slated to be “fully implemented” in Q1 2018, although it’s not clear what “fully implemented” means.
I don’t believe “automating” and off-shoring key customer-facing functions is the right answer, not in a high-touch business where adjusters, therapists, physicians, and patients all are key parts of the rehabilitation process.
While many MedRisk people made this happen – including COO (and fellow Syracuse grad) Michelle Buckman, CIO Vic Pytleski, and EVP Marketing Rommy Blum, the effort was led by President Mike Ryan.
Mike is one of the best-liked people in our industry, and most respected as well. Today, MedRisk will announce he is taking over as CEO from founder and Board Chair Shelley Boyce.
I’ve known Mike for years, worked with Shelley and her team for almost two decades, and am delighted for all. They traveled a long road and it is truly gratifying to see MedRisk back on top.
What does this mean for you?
It’s all about customer service.
How can either MedRisk or One Call purport to offer decent customer service when they pay less than half of the fee schedule to Workers’ Comp rehab providers? Seems like a recipe for disaster and substandard outcomes.
Hello IPTCA – welcome back.
Two observations. First, I can’t speak for OCCM, but MedRisk pays far more than “half of the fee schedule.”
Second, I’m not sure I follow your argument connecting customer service to reimbursement.
Thanks – Joe
Joe, please check your sources as I know of MANY California therapists who get paid about 50% of the fee schedule by both MedRisk and OneCall. They do so because they need the cash flow.
At those rates, many therapists simply don’t spend hands-on time with the patient (very common knowledge) which hurts medical care. A similar effect is happening in diagnostic imaging where the “low-price” providers often have worse equipment/facilities or less trained radiologists on staff. Yet is all these cases, the payer is often paying high, not deeply-discounted, rates.
All this has a DIRECT relationship to customer service, in a bad way.
When the entity who schedules the injured worker makes more profit on a referral than the medical provider who cares for the patient, something is wrong.
To clear this up, how about asking your client, MedRisk, OneCall and others to disclose their average provider payment and their average payer charges as a % of fee schedule in California?
Dick – Therapists can choose to not participate in networks; if they choose to participate they should negotiate for higher reimbursement if that’s critical. If they can’t get it, they shouldn’t participate.
I don’t understand your statement that providers “need the cash flow”. If that’s so, then they’ve decided the reimbursement is acceptable, because they wouldn’t have signed up otherwise. And, there are strict requirements re who is spending what time with patients, documentation requirements, etc. That’s common knowledge as well.
I don’t know of any instance where the intermediary makes more than the provider of services; I’ve audited thousands of claims and haven’t seen this yet.
I’ve never seen any data supporting your statement that in “all these cases, the payer is often paying high, not deeply-discounted, rates.” This is what I do, and payers do see significant savings that result in lower premiums for employers and taxpayers.
Net is, if you don’t like the reimbursement, change the laws. Don’t shoot the messenger because therapists don’t like lower reimbursement, change the direction and FS.
Sad thing is, discount network rates are mostly not negotiable and some networks seem to have a monopoly. There is a take it or leave it attitude when it comes to contracts. Even worse, at least one discount network have allegedly repeatedly offered a Pay-4-Play scheme….cut your rate and you’ll get more referrals. That’s the type of thing that lands discount networks in federal court (see hard evidence in iPTCA v One Call and Align) along with illegal billing practices, UR, and claims administration. Discount networks trying to do this in CA will get called out and stopped in their tracks.
Let’s keep more resources for patients- NOT out-of-state profiteering middlemen!
Paul Gaspar, DPT
President, Independent Physical Therapists of CA
They are all the same Joe, so now Medrisk has become the biggest provider rip-off organization again. Their schemes are illegal in many states and all they accomplish is to take money from local providers out of state.
Mark – I’ll have to disagree that “They are all the same”; having worked in this business for three decades, my opinion is there are deep and fundamental differences among and between these organizations.
These are legitimate, legal, and highly regulated business models, and are NOT illegal in many states. I’m not aware of any state save New York where it is illegal for employers to suggest, encourage, soft-channel, transport, or otherwise get patients to shift providers. However, those patients have the right to refuse to change providers – and in many instances patients don’t move.
Perhaps AZ is different; is the “soft-channeling” illegal or otherwise prohibited there?
Finally, in many instances these services reduce costs, shorten treatment duration, and thus get patients back to work faster – saving money for local employers and taxpayers.
Joe, a question for you: what are the “highly regulated business models” you mentioned regarding the medical networks scheduling services? For instance, in California, who oversees that basic service from which MedRisk and OneCall make most of their above-board money? Thanks.
Dick – happy to oblige. MPNs are one example of regulated business models requiring locations, directions, access standards, and provider data requirements; the DIR and DWC are the regulatory bodies. This isn’t just scheduling; that is just one part of the services regulated by each state, as I pointed out in detail earlier.
Does MedRisk directly file regulatory MPN documents with the State of California?
I’ll let you do the research on that.
Joe,
I disagree with your comments that “automating” and “high-touch” are opposites. In fact, numerous industries have shown that smart, high-tech solutions can increase the consumer’s feeling of personalization of service. In addition, maintaining old manual processes usually increases the cost of services for all stakeholders. Just look at travel, banking, investing, etc. But, or course, work comp is always 20 years behind the curve.
BTW, I fully agree with your comments about “outsourcing” in healthcare delivery.
Dick
Welcome back to mcm.
Re automation, i believe I was referring specifically to workers comp and the payer-intermediary communications and connection process. Investing in automation only makes sense when the ROI justifies it. In work comp there are multiple reasons this is far from possible.
Joe,
Your reasons sound so much like those I heard about travel agents, stock brokers and many others… “not possible to automate,” “not good for my clients,” when in fact, the real reason was they were trying to protect their own interests, not those of their clients. Might that be the real issue in work comp? I’d love to hear from others about what they think. Should make for a good discussion. Thanks.
No Dick they don’t resemble travel at all. There are fundamental differences here with the primary one – as I noted – the roi problem. Work comp is a very small business with no growth potential unlike travel etc.
Great point!!
That’s exactly why we need low cost solutions. The majority of the available money should go to health care, not paper shuffling.
Hello IPTCA – the majority of the money does go to healthcare.
Hey Joe, I don’t see it that way. The tasks of picking a good provider for an injury, getting an appt, tracking and billing for the services is common throughout healthcare – the largest segment of our economy. And work comp should not be that different just because it has been that way for decades. Transparent healthcare purchasing will be HUGE and will someday be demanded even in work comp by employers. For those that succeed, there will be a HUGE ROI. But transparency will be a serious challenge for all the current medical networks, as their business models and value propositions will be questioned. I can explain more, but for now, I’ll agree to disagree with you. I’d love to get others’ opinions on this matter. Thanks for the discussion.
Dick – there are very good reasons work comp is far less “automatable” than travel, stock sales and the like.
– each state has unique reimbursement requirements, unique rules, time standards, guidelines, and the like. In many states, work comp spend is far too small to make automation financially viable – there are just too few transactions.
– the rules, fees, and standards change ALL THE TIME and in ways that are often not anticipated.
– states DO NOT have the regulatory resources, time, or inclination to report those changes in ways that easily translate to machine coding.
– of course work comp shouldn’t be that different – but it is, has always been, and there are NO indications that’s going to change.
Finally, there can’t be a HUGE ROI because there just isn’t that much money in the business. And the trend is negative. Claims frequency is declining and has been for decades and spend is flattening out.
Can more automation come? Sure, and it will.
Will it resemble Expedia? Not a chance.
It’s pretty common knowledge that One Call pays many CA PTs a max per diem rate of $65/visit and MedRisk pays most $70 visit. That’s less than 50% because the OMFS is about $145/visit in CA. In addition, both networks failed to give most PTs any of the large raises in the OMFS during the past 4 years even though CA has a high cost of living and the OMFS remains among the lowest in the nation for PT. But, both networks kept A LOT of the $$$ for themselves.
Because Workers’ Comp service is supposed to be about return to work, outcomes, and the patient experience, it is difficult to imagine how the deplorable treatment of rehab providers by both networks benefits injured workers or their employers.
Thanks for writing and hosting,
Paul Gaspar, DPT
On behalf of the Independent Physical Therapists of CA
Paul – welcome to MCM.
The OMFS doesn’t have a fee on a per-visit basis, so I’m not sure I follow the math on the 50% calculation.
If fees are so low, why do therapists participate? It’s up to each practice to sign up, or leave, any network relationship – there’s nothing preventing practices from canceling contracts. I assume, and please correct me if I’m wrong, that practices are in networks because they want the patient volume.
Payers hire networks to manage a variety of services for them, including therapy. I’m not sure how therapy is any different in this regard than medical, surgical, or other cognitive services.
Net is I’d suggest therapists concerned about network reimbursement should take their case to the legislature, as that body passed the laws enabling networks and direction of care.
Joe, with all due respect. We did change the fee schedule. It increased from about $80 to now $140, but most PTs did not see a dime of that raise. Could it be that PT’s did not ask for a raise because many received ‘threatening’ letters during that time that their referrals would decline if they did not take a further cut? This type of Pay 4 Play negotiation violates several Labor Code. Do PTs feel like a monopolistic, cartel-like atmosphere hangs like a dark cloud over the WC system? That’s a rhetorical question….But the behavior is indefensible. The WC system should not be unduly exploited by middlemen for financial gain to the detriment of patients.
Dr. Paul Gaspar, DPT
President, Independent PTs of CA
Paul, thanks for the note and clarification. I can’t speak to the letters you refer to as I’m not aware of them; if there are illegal business practices occurring they should be stopped immediately – we all agree with that.
I’ve provided my thoughts on reimbursement elsewhere, so don’t want to repeat myself.
Joe
Hi Joe –
I agree with you with regard to PTs making a choice to join or not to join PT specialty and PPO networks. If the reimbursement is too low, don\’t accept it. Will this impact patient volume? Maybe, maybe not.
I do understand Paul Gaspar\’s point that the average visit paid per the CA fee schedule today is $140, up from an average of $80. If providers are accepting day rates of $65-70, this does net a 50% + discount from fee schedule today for them.
Should providers get more? They should get whatever the market will bare. The PT networks are free to pay providers and charge their clients at whatever providers will accept and the market will pay for the services.
I don\’t follow the rationale behind the OneCall/Align lawsuit in CA. Since when does price NOT factor into purchasers\’ decision making? WalMart wins business based on price, why deny PT providers the same right? If I own a clinic and I want to drop my price to win patient referrals, can\’t I do that? Isn\’t this the USA?
Moreover, the PT networks like Align and MedRisk discount their fees to their clients as well, so not accurate to say they keep a 50% spread. It is more accurate to calculate their spread at 50% – x% (the discount they apply to client bills) = the PT network\’s spread. So if they offer a real or net discount of 15%, they have a 35 point spread.
A 35 point spread in CA translates to about $50 per visit spread. Assume 10 visits per case – that\’s $500 they are making per case. Nice! Too much? Depends on what they are compared to and the value they provide I guess.
Going back to the value of the PT networks. Joe, you claim \”in many instances these services reduce costs, shorten treatment duration, and thus get patients back to work faster – saving money for local employers and taxpayers.\”
Not so sure about that. Any objective data that supports your assertion?
Thanks Joe, appreciate your blog and insight!
Karen Johnson
Hi Karen, welcome to MCM, and thanks for the comment.
Reductions are a function of two things – billing practices/services rendered, and contracted rates.
It’s likely some providers’ practice and billing practices create bills that are at or above $150 per visit.
And in these instances, the billed amount may well be twice their contracted rates.
The “savings” reports I’ve seen in California haven’t indicated a 50% discount – it’s much less than that. The competitive nature of the specialty network business being what it is, I can assure you the networks’ spreads are nowhere close to 35%. This is a highly mature business, with the margin pressure that always comes in this part of the business cycle, pressure that drives down network spread and increases payer effective discounts.
I do have data on outcomes, and have asked the companies involved if I can share that information – will let you know when I hear back. There are also a couple of reports from third parties that may have relevant data, and I’ve asked for copies of those as well.
Thanks again for your thoughtful comment – Joe