Jan

Killing claimants.

Posted by Joe Paduda on Thursday, January 26th, 2012 | Comments

Over the last ten years, more than two thousand claimants have died as a result of drugs received as part of their “treatment’ for their occupational injury or illness.
That’s the conclusion reached by Peter Rousmaniere in his latest column at Risk and Insurance – and if anything, his estimate is on the low side. This isn’t a criticism, as it is evident Peter is doing his best to avoid sensationalizing an issue that needs no exaggeration.
Peter bases his estimate on several different data sources, including a just-published article authored by Gary Franklin, MD, Medical Director of Washington’s state workers comp fund. By my calculation, both Peter and Dr Franklin’s estimates seem low.
A back-of-the-envelope calculation arrives at this figure – there were about 1750 narcotic-related workers comp deaths across the country in 2009 alone.
I base that figure on two data points.
1. Washington’s research – about 35 claimant deaths in 2009 appeared narcotics-related.
2. Washington has about 2 percent of the nation’s population.
Washington State has addressed the issue, and their solution has had a remarkable impact. This from the article by Franklin et al:
“By the third quarter 2009, there was a substantial decline in the mean daily long-acting opioid prescription dose among workers’ compensation claimants in WA, followed by a dramatic fall in unintentional poisoning deaths related to prescription opioids in this population in 2010.”
That’s one state out of fifty.
What does this mean for you?
Do NOT wait for your state officials to take action.
Identify claimants at high risk for addiction. Screen them and get them into treatment.
Identify doctors prescribing more than 120 morphine equivalents per day to claimants. Find out why, and if appropriate, take immediate steps to stop sending claimants to them.

Jan

Physician dispensing in Florida – Can money buy bad policy?

Posted by Joe Paduda on Tuesday, January 24th, 2012 | Comments

One of the most powerful firms in the physician dispensing business is sending hundreds of thousands of dollars to elected officials in Florida. [sub req] The donations, to individual politicians and their affiliated organizations, come as the Florida Senate is considering a bill that would limit reimbursement of physician-dispensed drugs to the cost of the underlying (non-repackaged) drug.
This morning Mike Whitely of WorkCompCentral reported Automated Healthcare Solutions “gave more than $32,500 to Florida state lawmakers and more than $500,000 to committees associated with conservative causes and candidates in 2011…”, most of it in the last three months of 2011.
The timing is fortuitous, as Senate bill 668 was moving thru the legislative process last quarter, and is the subject of intense debate. Suffice it to say that passage of SB 688 would greatly reduce the income of companies in the physician dispensing/drug repackaging sector.
The physician dispensing bill made it out of one Senate Committee last week, albeit with a poorly-written and ill-advised amendment.
Writing in HealthNews Florida, Carol Gentry reported: “SB 668 survived its first committee in a 7 to 4 vote. But some senators who voted in favor said they may change their minds if answers to their questions aren’t forthcoming by the time it gets to the Senate floor.”
It’s unknown if the flood of cash from AHCS will affect the votes of key Senators, or cause beneficiaries to use parliamentary procedures to block the bill. The forces allied in support of the bill include the Chamber of Commerce, most of the workers comp insurers, and many employers.
And, in an interview with Whitely, a spokesperson for AHCS said the company is not focusing on the issue, saying their donations are “not a means of affecting public policy”.
Really. That’s what she said. Evidently AHCS’ half-million bucks – donated to key legislators with power over SB 688 – is not related to physician dispensing.
That being the case, I’m sure Florida’s elected legislators will do the right thing, pass the bill, and thereby reduce Florida employers’ work comp premiums by tens of millions of dollars.
What does this mean for you?
Yet another opportunity to watch the ugly, money-driven process that is politics at its worst.

Jan

Genex is for sale

Posted by Joe Paduda on Monday, January 23rd, 2012 | Comments

Looks like the rumors are based in fact; case management/bill review vendor Genex is up for sale.
The “official” news came yesterday (thanks to a good friend for the tip); “The Wayne, Pennsylvania-based company has EBITDA of USD 40m, the source and the first industry banker said. Bank of America has been mandated for the sale process, according to the source familiar. The sale process is in the early stages, with no first round bid deadline yet set, a third industry banker said.”
With top line revenues estimated at $390-$400 million, it’s not a terrifically profitable entity, but then case management is not known as a big cash generator. They’ve made a couple acquisitions lately, with Intracorp by far the largest.
Looks like Genex’ owner, Stone Point Capital, may be entering the divesting phase. Recall SPC also has ownership in Sedgwick and Stone River/Progressive Medical, although the latter property was only recently acquired. As CIGNA is also an owner, they could be pressuring Stone Point to sell Genex; pretty much every health plan is looking for capital to invest in preparing for 2014, and CIGNA would get a chunk of cash from a sale.
Timing is good – valuations are up, there’s lots of activity and interest, and a couple of big-money folks are looking for roll-up and industry integration opportunities. Genex would be a pretty interesting cornerstone for such a venture.
What does this mean for you?
Hold on to that hat – this isn’t going to be the last big deal we’ll see this winter.

Jan

Copperfield Research’s CorVel hatchet job

Posted by Joe Paduda on Monday, January 23rd, 2012 | Comments

A couple days ago a shadowy equity “research” outfit that goes by the name Copperfield Research published what can only be described as a hatchet job, with CorVel the target.
I’m no fan of CorVel – their business model makes little sense, their pricing model for bill review/networks/ancillary savings appears designed to maximize their revenue, the quality of their services varies widely, and I’ve been generally unimpressed with their customer service and value proposition.
I’m even less enamored of the “research” and “analysis” done by Copperfield. This isn’t a well-known research firm or trading outfit, I couldn’t find anything definitive about Copperfield, what their business is, who works there, and why they publish “research”. Others speculate Copperfield is the product of an individual engaged in short selling; making money when a stock price drops. I have no idea if that’s the case, but that would help explain the CorVel research paper.
Whoever wrote the hatchet job quoted me extensively; that’s why I find it necessary to speak out.
It is quite clear that Copperfield knows next to nothing about CorVel’s workers comp business, or the work comp world in general, for that matter. Here are a few specific issues I have with their “report”.
Copperfield cites the 2005 Broward County audit as an example of CorVel’s problems – folks, that was seven years ago. Why did Copperfield resurrect that story? How does this support his claim that “Corvel operates in the gray area of legal and business practices?”
Copperfield raises the Silent PPO issue; CorVel’s PPO, like every other PPO, probably has serious data issues and may publish inaccurate provider manuals as well. This isn’t evidence of intentional fraud; as anyone who’s ever been in the network business knows, the directory is obsolete the instant its published.
CorVel’s bill review and related operation is cited as another example of possible malfeasance. Again, disagreement between bill repricers and providers is not exactly new news, and disagreements don’t mean there’s intentional fraud.
Copperfield can’t understand how a work comp services company can grow while frequency declines. Boy, talk about a guy without a clue about comp. Severity is up, Copperfield, medical complexity is up, and many other services companies have also grown over the last decade – despite declines in frequency. Perhaps Copperfield’s extensive research staff didn’t find Sedgwick, MedRisk, PMSI, MSC, Express Scripts, Align Networks, York Claims, MHayes or any of the dozens of other companies, that have grown quite nicely over the last ten years.
He says “CorVel is paid based on the number of claims it manages and is often paid a percentage of the client’s savings…” Well, not exactly. CorVel gets paid in a variety of ways for a variety of services; Copperfield’s failure to delineate these various services and describe the associated pricing mechanisms shows a lack of attention to detail, or perhaps eagerness to avoid talking about issues that don’t support his assertions.
Moreover, Copperfield’s complete lack of professionalism is evident in his assertion that somehow CorVel’s percentage of savings model is an outlier, unique and different. We all know that’s far from reality. While I have voiced my objections to the model, the fact is it’s all too common.
He also says no analysts are following the company – not true. There are any number of research reports on Corvel
Okay, those are the highlights. Now let me get snarky.
This guy just flat out can’t write, yet he thinks he can. Here are a couple examples.
Discussing the Broward audit, he says it “succinctly details” information. Huh? That’s an oxymoron, and a wrong one at that – the report has 211 pages…
Copperfield likens himself to perhaps the most attractive exposer of corporate malfeasance in recent history, saying “we feel a certain kinship to the Erin Brockovich’s [sic] of the world…” I have no idea if Copperfield is the male equivalent but he certainly doesn’t know the difference between the possessive and the plural.
In discussing the results of his(?) extensive research, Copperfield says “we have uncovered some alarming finding.[sic] There’s that damn plural again…
If you really want a hoot, read his description of the work comp claims process on page 5. It is (unintentionally) hysterically wrong.
Finally, this knucklehead says “According to Joseph Paduda [that’s me]…nurse case management is a low-margin.” I know, I know, he just forgot to add “business.” That’s not acceptable for two reasons. One, if you’re going to paraphrase or quote someone, get it right. Two, it shows a lack of attention to detail, an absence of care and thoroughness that may well extend beyond his inability to write.
What does this mean for you?
If Copperfield is selling short, he’s already done well. And if you’re reading his stuff and acting on it, good luck.

Jan

MCM’s position on SOPA and PIPA

Posted by Joe Paduda on Saturday, January 21st, 2012 | Comments

I don’t like these bills, and neither should you.
First, my perspective.
I’m a content provider and a copyright holder. I don’t want anyone else taking my intellectual property without permission and/or compensation. This isn’t just about MCM; I’ve also written a book (The Art of Sculling) that has been in print for twenty years, and while the revenue from that book is tiny, it is payment for my work and no one should be able to access that work without paying for it.
I get the movie producers’, actors’, artists, and musicians’ perspective and agree with it.
The two bills currently before Congress are waaaaay too overreaching – sure they solve the problem of internet piracy. So would shutting down the internet. While SOPA/PIPA don’t go that far, they do make innocent parties suffer for the acts of others.
Here’s how this could affect me – and you, loyal reader.
Say someone posts a comment with a link to a copyrighted video, image, document, song; and the Feds get a complaint. Under SOPA/PIPA, they could legally shut down MCM immediately, and I’d have to spend tons of time and energy dealing with the issue before I could get MCM back up and running. That would harm me, and end your ability to access MCM.
Bob Wilson provides more insight:
“First, the government would have been able to force search engines to “delist” any website they suspected of these activities. The second would be to require ISP’s (Internet Service Providers) to disable “Domain Name Service” to the suspected sites. The DNS service is essentially what allows the “domain name” that you are familiar with to work.”
I get the intellectual property argument – I absolutely get it. But SOPA/PIPA are a heavy-handed, highly punitive, and poorly designed solution that would cause far more damage than necessary.
Sign the SOPA/PIPA petition, and let’s stop this idiocy.

Jan

Physician dispensed drug costs – progress in Florida!

Posted by Joe Paduda on Thursday, January 19th, 2012 | Comments

Earlier this year, I predicted Florida would pass a bill limiting reimbursement for physician dispensed drugs. This morning, we made some significant progress.
Spent a good chunk of the morning watching the Florida Senate hearing on Sen Hays’ bill that would peg reimbursement for physician dispensed drugs at what a retail pharmacy would charge for the same drug.
Automated Healthcare Services’ lobbyist Tom Panza was up to speak in opposition. A passionate advocate for his client, Panza’s speech was notable for its energy if not for its accuracy.
He conflated drug costs, saying that repackaged/physician dispensed drugs average price of $137 is the same as the average pharmacy price of $120. What Panza didn’t say, and none of the Senators asked about, is drug mix. Physician dispensers almost exclusively dispense generics, which are much cheaper – on a per script basis – than brand drugs. And retail chains sell brands and generics – brands cost over $200 per script. Thus, Panza’s claim that physician dispensed drugs only cost $17 more on average than retail was misleading and false on its face; in fact WCRI’s recent report on pharmacy in Florida notes: “physicians were paid 35-60 percent more than pharmacies for the same prescription.”
Panza also trotted out the hoary old chestnut that physician dispensing increases compliance, citing the statistic that 30% of scripts aren’t filled – ignoring that this figure is a) dated; b) addresses group health and not work comp; and c) the main reason people don’t fill their group health scripts is cost. And as we all know, comp claimants don’t pay anything for drugs.
Panza also stated that physician dispensed drugs reduced litigation and increased patient satisfaction, without citing any data or research to support that assertion. Gotta respect his passion, even if his logic and supporting data (of which there was almost none) was suspect at best.
Lori Lovgren came up after Panza, and debunked his claim that prices were the same for physician and pharmacy prices. Sen Bennett was somehow confused about her response, or perhaps more accurately Bennett didn’t like what he heard. Bennett’s been vocal about his support for the egregious over-billing for drugs by physician dispensers. Sen Negron, another physician dispensing supporter, asked some unsubtle questions asking if insurers had any ownership of pharmacies or PBMs, which Lovgren did not answer – the answer, of course, is no.
While Lovgren was, or course, accurate, she wasn’t a particularly effective speaker, and failed twice to make key points refuting Panza’s claims. It’s one thing to have the right information, but it’s a whole different thing to present that information cogently and effectively.
Several other Senators seemed to focus on narcotics, and wanted to know if the pill mill bill had changed the financial picture, making NCCI’s cost figures irrelevant. Lovgren responded that no, there was no significant impact on cost, but that didn’t seem to bear much weight
A number of potential speakers from all manner of employer, taxpayer, and payer advocacy organizations waived their chance to speak but voiced support for Sen. Hays’ bill (restricting overcharging for physician dispensed medications).
A physician advocated for physician dispensing said he couldn’t dispense at the costs set by the Hays bill as he has to hire additional staff and buy software etc and therefore the bill killed physician dispensing
David Deitz, MD spoke directly to the physicians’ claims that physician dispensing increases compliance, noting there are no studies supporting that claim. He also noted that Liberty Mutual does not oppose physician dispensing but rather repackaging. Another Senator cut off Dr Deitz, and the Committee did not allow any of the other dozens of supporters to speak. That’s too bad, as Dr Deitz knows this subject very well.
There was some very brief discussion, but the bill passed out of Committee by a substantial margin
This is a big step, a critically important one, but only a step. There’s much to be done to get this bill passed by the Senate and signed into law.
We’ll keep you posted.
Thanks to Carol Gentry of HealthNews Florida for the head’s up.

Jan

New Year, New Health Wonk Review

Posted by Joe Paduda on Thursday, January 19th, 2012 | Comments

HWR’s tech guru and all-around social media expert Julie Ferguson is this biweek’s editor of Health Wonk Review.
There are lots of predictions and insights, and much discussion of reform and the Supremes.

Jan

I shoulda warned you, Bob…

Posted by Joe Paduda on Wednesday, January 18th, 2012 | Comments

Colleague Bob Wilson of WorkersCompensation.com has been delving deeply into the disaster that is North Dakota “justice”, at least justice as applied in the Sandy Blunt case.
Bob’s efforts have uncovered some amazing stuff…
For instance, the same state that spent hundreds of thousands of dollars prosecuting Sandy Blunt for giving a few thousand dollars of incentive presents such as balloons and chocolate chip cookies and five dollar (five dollar!!) gift cards to employees also used a Predator drone to nail some farmers for keeping six of a neighbor’s cows on their property.
Yep, that’s a $154 million aircraft used to get $6000 worth of beef.
There’s a new definition of RoI; it’s no longer “return on investment” but Reminder of Idiocy.
Alas, some of the ~~good~~ bad folks of NoDak don’t see that as a problem, instead choosing to hurl imprecations (for you NoDak Sandy-Haters that means “say nasty things”) at Bob for his ignorance and temerity (again, for NDSHers, that means “unmitigated gall”; oops, that won’t work…how about “excessive boldness”?).
Net is, they’ve been pretty awful, and not very articulately awful at that. Lots of “oh yeahs?” and “yo mama” type stuff, so much so that Bob had to shut down comments before the offenders sprained their brains tying to decipher his multisyllabic retorts.
But Bob says it better than I can. Go read his “People’s Republic of North Dakota” piece and see for your own self.
And don’t forget to sign up for the Friends of Sandy Blunt afterwards…
(Now before all the GOOD folks of NoDak pillory me, I know you’re out there, admire you immensely for standing by Sandy, and appreciate your support for the guy. I’m also sorry you have to live on the same planet with those jerks)

Jan

Why work comp pharmacy is nothing like group health

Posted by Joe Paduda on Tuesday, January 17th, 2012 | Comments

Today’s WorkCompWire has a great piece authored by PMSI CEO EIleen Auen on the differences between work comp and group pharmacy management.
Among Eileen’s points are:
– “Group health benefits generally focus on sickness and illness while workers’ compensation focuses on workplace injuries and returning individuals to work. Although a fairly obvious difference, it underlies many of the other differences that make workers’ compensation unique, including drug mix.” (I’d add that work comp ONLY covers drugs specifically for treatment of the occupational injury or illness).
– “The types of drugs used. Because of the focus of care, the medication mix in workers’ compensation is much more focused towards pain management rather than illness management.”
There’s quite a bit more on differences in clinical management, formulary, and financial incentives, and how these effect prescriber and patient behavior.
Well worth the read, especially if you’re an investor type trying to understand the WC PBM industry.
(Note PMSI is a member of CompPharma, and Eileen is a good friend)

Jan

No, Mitt, you can’t fire your insurance company

Posted by Joe Paduda on Tuesday, January 17th, 2012 | Comments

Mitt Romney’s comment ” I like to be able to fire people” has been turned against him by his GOP Presidential candidate opponents, with Gingrich and Rick Perry (remember him?) using it to illustrate Romney’s “out of touchiness” with regular Americans.
Of course they’re taking it way out of context. All who try to beat Romney will – a time-tested way to win is to use your opponent’s words against her/him; if he makes it thru as the GOP Presidential candidate, expect the Dems to feature that prominently in key states.
But there’s a deeper message here – yes, Mitt is out of touch – but no, not for the reasons cited by his opponents.
Romney clearly doesn’t understand that most of us can’t fire our insurance companies. A piece in the Columbia Journalism Review makes this point: Can you really fire your insurance company? The answer is that it’s darn difficult even in Massachusetts–the land of Romneycare.
For those covered by large employer or union plans, what you’ve got is what you’ve got – and if we don’t like it that’s too bad. Of course, many large employers offer several choices, so these folks have better options than those of us who don’t work for large employers – which happens to be most of us.
If your coverage is thru a small employer, your selection is most likely limited to one plan. While your employer probably shops the plan every few years, the only one who can “fire” his/her insurer is the employer. And that supposes the insurer doesn’t fire the employer first by raising rates to the point where the employer has to move to another health plan.
Those of us (that includes your faithful scribe) who get their coverage thru the individual market face even more limited choices (depending on where you live). If your health status changes while insured, it will be very tough for you to get a new insurer to take you on – and if they do, expect to pay a lot more for a plan that doesn’t cover your pre-existing conditions for some period of time (how long that period lasts depends on your state).
The net? While we’d all love to be able to fire our insurance company, most of us can’t.
And under Mitt’s health reform plan (such as it is), your ability to get coverage would be even more limited.
Of course, Mitt may have been paying a compliment to his potential opponent in the fall Presidential race – under PPACA (health reform), individuals can fire their insurance company, small employers may well have more choice (and the cost of that insurance will be less for many employers).
What does this mean for you?
Mitt is definitely out of touch – we can’t fire our insurance companies, but they sure can fire us.
There’s lots more detail on Federal limits on pre-ex here.

Author: Joe Paduda