Earlier this week I ran into a couple of enterprising reporters responsible for a recent stream of articles about workers’ compensation; actually I sat next to them in an Atlanta airport bar.  Evidently they’d been stuck there for some time as they were pretty… chatty…

PhoPublica’s reporters were having a grand old time, reading passages of their work out loud to each other, toasting their skill at turning a phrase, saluting their editors’ genius in assigning them to this story, and planning where they’d display the Pulitzer Prizes certain to come. While there were a couple concerns voiced by industry pundits about a lack of balance or perspective, this didn’t dampen their spirits for long, as one reminded the other they needn’t bother with facts or perspectives contrary to their central theme: Workers are getting screwed by Insurers and Employers.  In fact, they had a term for those contradictory views – “whatevers”, as in, this is about as important to us as parental views on fashion are to teenagers.

They were thumbing through a stack of emails, reports, documents, and studies sent in by work comp researchers; a couple elicited hoots of derision but a few caused some consternation. One in particular from a highly-regarded California research organization had them flummoxed. Evidently their latest article completely misquoted the research organization’s findings; the real data totally refuted PP’s assertion that lots of treatment requests are rejected.

After ordering another round of White Zinfandel, the reporters went back and forth for some time on the right response. I couldn’t make out some of what they were saying, but there appeared to be a debate about the right “strategy” – ignore the real data entirely, bury a correction in a footnote, pretend they never got the message, or send an automated email response along the lines of “We are on vacation in the jungles of Myanmar and will respond when we return.”

This was a tough one, requiring additional sustenance.  Appetizers were ordered (escargot and nachos with brie cheese) and the chatter went on for some time.

In the end, a lightbulb went off; one had the brilliant idea to “correct” the data point but do so AND preserve their central theme – Work comp reform screws employees.

Pen was put to cocktail napkin and after much effort, the intrepid journalists came up with wording implying the treatment requests were only approved because the employers and insurers had bought-and-paid-for the entire review process and all the reviewers.

Genius indeed!

Journalistic integrity preserved, but not at the cost of a) admitting a mistake was made, or b) diminishing their case that Workers are getting screwed by the all-powerful Insurers and Employers.

Their timing was impeccable as well; just as their flight was called, they drained the last few drops of White Zin, scarfed down the few remaining brie-on-toasts, and emailed the revisions to their waiting editor.

Me, I sat stunned, rendered speechless (a rare accomplishment indeed) by the ability of these professionals to get the facts to say what they want them to say, regardless of what the facts actually are.

 

What does this mean for you?

I thought Fox News was skilled at distortion…they could learn some lessons from PhoPublica!

and btw, check your calendar…

Another deal goes down, more clarity around IMRs, more data on the impact of the Affordable Care Act – it’s been busy.

First up, Select Medical’s purchase of Concentra.

In what looks to have been a pre-emptive move, Select Medical announced its intent to purchase occ med clinic firm Concentra from parent Humana. (btw great reporting by BI’s Stephanie Goldberg; she has more detail than any other source.)  Concentra, which has about 300 stand-alone clinics and 240+ on-site clinics, claims it handles 14% of all occupational injuries (they refer the more complex ones to non-Concentra providers).

The acquisition makes strategic sense for Select as it adds primary care to its current portfolio of physical therapy, rehab, and long-term care operations.  It also expands Select’s geographic reach considerably, albeit in a different line of business.

We will track the integration of Concentra and Select going forward; expect to see more efforts on the part of Select to work directly with payers, and a stronger negotiating stance with networks now that they have more market clout.

ACA implementation

A big concern and one certainly noted by opponents of ACA was the purported cancellation of large number of employer-sponsored health insurance plans that failed to meet ACA coverage standards.  New data indicates less than 1% of employers surveyed reported cancellations due to coverage standards.

In contrast, somewhat less than 5% of individual policies were canceled due to coverage requirements.

A Robert Wood Johnson Foundation report (thanks to AthenaHealth) report indicates docs are not getting swamped with newly-insured patients seeking primary care.  Key findings include:

• New patient visits to primary care providers increased from 22.6% of all appointments in 2013 to 22.9% in 2014.

• The percentage of visits with patients with complex medical needs decreased from 8.0% of appointments in 2013 to 7.5% in 2014.

So far, doesn’t look like primary care providers are overwhelmed – HOWEVER that is national data, and things certainly vary from region-to-region.

While primary care isn’t being overloaded, the health care delivery system is undergoing wrenching changes – with small, safety-net hospitals probably the most affected. Expect to see closings, consolidation, and takeovers as these most-vulnerable providers lacking scale, resources, and brand find they can’t survive.  For a glimpse into the near-term future, track what’s happening in California.

Work comp

The California State Fund is growing, as the market hardens and rates increase in the Golden State.  California is a bit of an anomaly as the market appears to be softening somewhat in the other 49, but a 52% increase in earned premium indicates the State Fund’s moves to rationalize pricing via tiers along with other insurers pulling back from California is driving more business to the Fund.

Drugs

Finally, great piece from AIS’ Lauren Flynn Kelly on pharmacy’s biggest cost drivers – spoiler alert – the top two are Hep C drugs and compounds…

Enjoy your weekend!

David Deitz, MD PhD was last up at CWCI, his task to bring it all together by asking an apparently simple and straightforward question:

What can California learn from Washington?

Or put another way, “Can California’s workers comp system be fixed?”

Possibly.

First off, there still isn’t much of a focus on quality of care in California.  Outcomes in workers comp are still worse than in group health – despite more care for many of the same conditions.  Many state systems still rely on judicial, administrative, or otherwise “non-medical” authorities to make decisions about what are essentially medical issues; fortunately California does not. Cue the IMR complaints…

That’s good news; however just by virtue of being a work comp patient, things aren’t so good. A 2005 JAMA-published analysis indicated 83% of studies (175 out of 211) found that just being a WC claimant was associated with worse outcome after surgery.

There’s a lot of research and analytics and reporting in the non-workers ‘comp medical world related to outcomes, costs, and cost effectiveness, with “a lot” especially true when compared to the paucity of such research in workers’ comp outside of L&I, CWCI, and a couple other sources.

Dr Deitz referred to a “massive number of care improvement initiatives that are going on throughout the health care system” (paraphrasing), a trend that will continue with or without, ACA. Again, this may help work comp as better care = better care for work comp too + a healthier population.

David also noted the questions we are encountering in workers comp are nowhere to be heard in the real world; there are no questions about evidence-based medicine in group health.  EBM is embedded in the very fabric of health care contracting, delivery, measurement. It is accepted fact, a core operating principle, fundamental. And the work comp systems would benefit immensely from a healthy dose of EBM.

One supporting data point is what’s happened in Texas, where they named a Medical Director and adopted guidelines, strong UR, formularies, EDI, and measurement of results.  While Texas isn’t perfect, it’s gotten a lot better.

Unfortunately along with Washington, Texas is one of only two states that has made significant progress in adopting changes that have significantly improved medical care delivered to injured workers.  However, it’s not for lack of opportunity.  Dr W Brose’s HELP Pain Medical Network is just one source of high-quality, workers’ comp-specific and relevant data on treatment outcomes.

The money quote – “workers’ comp is the most costly and inefficient way to deliver medical care that humankind has ever invented.”

And care improvement is possible in WC but requires systematic reform.

We have a system that is inefficient, very expensive, and delivers poor quality care.  That has to change.

Dr Deitz’ final point – improvements in workers’ comp medical care MUST happen.

 

 

 

What a %^&*$#$* week!

Like many, I spent far too much time this week dealing with the fallout from the ProPublica/NPR series on workers’ comp.  I really need to devote more time to real work, and less to educating folks after the fact…and cleaning up the mess.

One quick point; in the original Demolition article, the authors state:

in 2013, insurers had their most profitable year in over a decade, bringing in a hefty 18 percent return.

I’m not sure how they are defining “return”; usually it implies profit, but that doesn’t seem possible. I have a query into Michael Grabell, the Demolition article’s author, and will report back if/when I hear more.  According to NCCI, work comp insurers [opens pdf] delivered a 2013 pre-tax operating gain (for private insurers) around 14% while state fund gains were about half that.

Of course, that was a pretty very good year; over the last decade, workers comp writers averaged a 7.1% return on net worth, which is another way to look at “return”. Can’t locate any other data or research that is any where close to the 18% number; will let you know if something turns up.

UPDATE

MIchael Grabell of ProPublica responded to my query this afternoon and indicated the data came from NCCI and AM Best and was also referenced in John Burton’s Workers’ Compensation Resources Research Report.

Without getting too deep in the weeds re combined ratios, whether it’s appropriate or not to include dividends, and other minutiae, I can see why someone might look at those reports and get the impression WC is wildly profitable.

In general, it is inaccurate to say insurers’ return was 18 percent as this figure does NOT represent all insurers.

1. NCCI reports data from the states where they work; this does not include California, New York, New Jersey and eight others. 
2. NCCI and AMBest data is only for private carriers, and does not reflect state funds; these are also insurers and their “returns” were far less than 18%.
3. Data from monopolistic states, where insurance is purchased from the state, is also not included.  Monopolistic states include OH ND WA WY.

More to the point, if you are trying to make the point that insurers are getting fat while workers are getting screwed, it’s helpful to point to a VERY profitable year.

However, if one wants to be objective, looking at one year does not provide an accurate picture of the financial status of any industry; one could just as easily look at 2009, 2010, or 2011 where private carrier results were break even at best.

Kudos to Jill Breard of LWCC and Elessa Young of UPMC – both found far too many typos in my blogs from last week’s WCRI conference.  I won’t tell you how many Jill and Elessa found – that would be mortifying.  Thanks ladies, your diligence is much appreciated!

There’s a great piece by WorkCompCentral’s Greg Jones this am about the IMR process in California; evidently someone inadvertently sent an email – “purportedly from [IMR vendor Maximus] to WorkCompCentral..” that indicates payers have failed to send medical records within 90 days for more than 5000 cases. While the number of cases with missing records has decreased significantly over the last year, there’s no indication any fines or financial penalties have been levied against the responsible entities.

Not sure what is going on here, or why, or who is responsible.

This story will have legs…

 

Ok, I’m a bit early…

here in upstate NY the sun is out, and my colleagues in New England can almost see the tops of the cars stuck in drifts created by aggressive snowplowing.

So, spring must be on the way!

To celebrate, Brad Wright has penned the biweekly edition of Health Wonk Review, bringing a fresh, sunny, and bright collection of thought pieces from Wonks like us direct to your internet-connected device.

Bask in the glow, knowing you’ll be in flip flops and shorts in just a couple of…months!

WCRI’s Evelina Radeva focused on employee wage replacement, a particularly timely topic given NPR and ProPublica’s ongoing series on the Demolition of Workers’ Comp.

Suffice it to say that PP’s reporters would have greatly benefited from Ms Radeva’s presentation.  Informed sources indicated that reporters Michael Grabell and NPR’s Howard Berkes reporters failed to contact WCRI before this week; a rather stunning oversight on the part of the reppporters.

How any journalist reseaching workers’ comp could neglect to even call the nation’s pre-eminent research organization is beyond me.  They would have been well-served to engage early and often with WCRI and their many experts on all aspects of workers’ comp.

Radeva’s deep dive into weekly wage benefits in IN and NY; Indiana is raising their maximum weekly wage by some 20%, generally aligning Hoosiers with the other 15 states in the study set.  On average, 12% of workers hit the wage replacement cap across all 16 states.

Of note NY also increased their maximum weekly wage several years ago; California has as well.

Peter Rousmaniere raised an interesting question that unfortunately went beyond WCRI’s ability and mission – why is there a cap on the maximum weekly wage?

WCRI Rick Victor answered Peter’s question by noting the impact of tax brackets, the tax-free nature of work comp indemnity benefits and anecdotal information that higher-paid workers get other benefits from their employers that help offset lost wages – while acknowledging there is wide variation among and between the states.

Dr Rebecca Yang discussed the correlation of fee schedules and associated physician billing activity.

Key takeaways

• There’s somewhat of a correlation between low office visit reimbursement rates and higher incidence of physician dispensing.
• evidence from CA indicates that when th FS whas reduced, doctors coding practices did too – more office visits were coded as level 4 and level 5, while the frequency of lower level visits decreased proportionally
• when the fee schedule was subsequently increased, the trend to more upcoding moderated – then resumed when the fee schedule was frozen again.
• this experience was essentially replicated in Louisiana
• in Florida, a change to the fee schedule for facility-based lumbar MRIs essentially increased reimbursement for “unscheduled” MRIs when compared to “scheduled” MRIs.  Perhaps you, dear reader, will not be shocked to learn that “unscheduled” MRIs went from about 1/3 of all lumbar MRIs to over 2/3 over the next few years.

What does this mean for you?

Blunt instruments – such as the physician fee schedules in place in 42 states – CAN BE opportunities for bad actors to game the system, while hurting the good folks.  

Not to say they should be abandoned, but rather it is necessary to think about what will happen if you change fees (or other care-based reimbursement rules) – not what you hope will happen.

Yesterday ProPublica published the first in what is apparently a series of articles on the workers comp systems around the country. This first effort focused on ‘reforms’ and generally indicated these are driven by big employers seeking to cut workers benefits and medical costs.

There is much coverage of grievous injuries, lost limbs, different compensation systems in different states and the role of big business in writing reforms.

I would suggest that writing about reforms, without discussing what’s driving the medical care reforms, is an oversight. And there was precious little discussion of cost drivers, but a lot of discussion about cost control methods, including a tortured passage attempting to describe California’s utilization review process, and the issues inherent therein.  Unfortunately, the coverage of this issue focused on the denials of care, not on the reasons therefore, the process that is used, and why some requests should be denied (more on that in a later post).

Re California, I asked friend and colleague Alex Swedlow for his thoughts on how ProPublica characterized cwci’s research; here’s his perspective…

 The article would benefit from a full discussion on how much and what type of care is approved and denied.  It’s true our study showed that about 91% of the disputed denied treatments are upheld by Independent Medical Review.  What is missing from the article is that denied disputes are only 6% of all treatment reqests and that the California worker’s comp system approves 95% of all treatment.  And the 5% that is ultimatly denied is another story.

The dramatic increase in utilization review in California has been driven largely by the plaintiffs bar, which has been using the IMR process to extend disability. One has to wonder why they have been doing this. In addition IMR increases are driven by by the overuse of drugs, the changes in medical practice patterns since the treating physician presumption was overturned, and the desire on the part of many to address the overtreatment that is rampant in Worker’s Compensation.

Moreover, there was no attempt to explain why employers are seeking to direct injured workers to specific providers or panels of providers. This was presented as a problem for injured workers, when that is inmost instances absolutely not the case.

In fact, the care direction by employers was treated as somehow harming injured workers.

I was excited when I heard propublica I was going to be taking this topic on. I have been impressed by propublica’s work on many fronts. There is much about Worker’s Compensation that needs improvement. Unfortunately, my take on this article is that it is quite one sided, and does not address many of the significant issues that are leading to harm for injured workers, employers and taxpayers. As an introduction to the topic, it is seriously flawed.

While there may be other articles coming in future weeks and months, the expectation that has been set by this article is that the system is somehow tilted in the employers favor. I can assure you that in most states, this is far from reality.

I’d suggest that the story is far from complete. It ignores the rampant profiteering that is the primary driver of the reforms described in generally negative terms, fails to point out the complicity of the claimants bar in extending disability, and completely misses the damage done by profiteering physicians over-prescribing opioids and benzodiazepines and failing to work closely with payers and employers.

Data point- the back surgery scandal in California led to many unnecessary back surgeries, much pain for claimants, and tens of millions in excess costs for employers and taxpayers.

There is no question big business is behind much of these reforms just as there is also no doubt state medical societies are overwhelmingly to blame for rampant abuse of the system in states such as Florida and Maryland.

Data point- the medical society and a drug dispensing firm used the same lobbyist who successfully kept doc dispensing operating in MD thereby increasing costs and extending disabilty.

Finally the story fails to address a critical point – namely the nature of the workforce, employment, injuries and the health care system has fundamentally changed in the last 100 years.

Of course it doesn’t work now. Women are a majority of workers, employment in services long ago overtook manufacturing and industry, Medicare exists, health care systems have radically changed, and the working population is much older fatter and less fit.

It would have been quite helpful to discuss states where things are working well. Washington is one and Ohio has made great strides as well.

What does this mean for you?

If asked by a non-work-comp person about the article and subsequent pieces, you may want to suggest that reality is somewhat different from the world portrayed by ProPublica.

Wcri’s experts summarized their latest research in doc dispensing in the second presentation.

A couple quick takeaways.

First, the efforts to control the price of the repackaged drugs dispensed by physicians has failed as the dispensers have effectively circumvented the rules or statute by creating “new” drugs that are remarkably similar to current medications.

this is particularly problematic in IL and CA.

Second, physicians in Florida were apparently prescribing and dispensing opioids more often than necessary as they stopped prescribing these meds when they could no longer profit from dispensing fees.

Pharmacy costs in CA are growing rapidly however the pain management guidelines seem to have led to a flattening in the growth of the more potent opioids.

CWCI exec dir Alex Swedlow provided his usual excellent debunking of the false claims made by doc dispensing advocates, noting costs are higher and disability duration longer.

The net – doc dispensing research overwhelmingly indicates the practice adds no value and benefits no one but the profiteering docs and their enablers.