And only one post…clearly I’ve been slacking.  Time to catch up!

Workers Comp

There’s been much discussion of the implications of the demise of the APAX-Coventry Work Comp Services deal; CWCS staff seem to have mixed views, but most are concerned that parent Aetna will continue its non-investment “strategy”, allowing the business to slowly fade.

It would be a mistake to attribute this to some nefarious plan and dark-hearted souls.

Work comp is – at best – tangential to Aetna’s Medicare, Medicaid, group and individual health businesses.  Any time spent focusing on WC is time not invested in much more important things.

Conversely, Coventry is anything but “tangential” to many work comp payers.  For many, CWCS is the integrator, bill processor, document manager, provider network, case manager or some combination thereof.  With medical expense accounting for 3/5ths of claims costs, payers with close ties to CWCS will be watching developments very, very closely.

While we’ve been focused on the Coventry-APAX deal, we haven’t been hearing about other transactions.  There are a couple other potentials out there, but if anything the deal flow has been markedly slower, partially because there just aren’t that many more deals to be done.  We may well see activity pick up again now that there’s more clarity around what would have been a blockbuster transaction.

Lots of good news this Friday – thanks to lots of good people…

While many of us have been focused elsewhere, two organizations have been doing their part to secure the future of work comp.  IAIABC just announced grants to two women to help them continue their workers’ compensation studies – congratulations to Chamila Adhihetty of Toronto, Ontario and Suzette Carlisle of St. Louis, Missouri – and to IAIABC for their foresight.

Coincidentally, Healthcare Solutions will be hosting the inaugural Women in Workers’ Comp Forum on Tuesday, November 18 just before the NWCD Conference in Las Vegas. Registration is free, and the event is proving to be quite popular. Sign up soon here. Kudos to HCS’ SVP Elaine Vega for the idea, and to CEO Joe Boures for enthusiastically supporting it.

WorkCompCentral is focusing on the top performers in California’s comp system – physicians, attorneys, expert, employer, claimant, regulator – with their Comp Laude(tm) Awards.  Nominate your pick here.

One of the finest people in this business is Chris Brigham, MD.  Chris has just released a most excellent book – Living Abled.  He wrote the book to help those dealing with potentially disabling conditions navigate the system, find and use resources, and take charge of their injury or illness.  While individuals can order the book themselves, payers may well want to consider giving it to every claimant. Disability is more about attitude than physical limitations, and Living Abled will help people think clearly about what they can do.

The good folk at WCRI have been marching along, publishing even more research on issues critical to the industry.  A webinar on predictors of worker outcomes is coming up on October 16; sign up here now as there are only 100 slots…

Also just out is a study of what’s happened in Georgia since the Peach State imposed pricing controls on physician-dispensed drugs (spoiler alert – prices dropped significantly after the reform, but doc-dispensed drugs are still much more expensive than the same pills purchased at a drug store).

Why?

My view is the dispensing profiteers seek out drugs from suppliers who inflate the pills’ AWP (the basis for the fee schedule), then turn around and sell them to the docs at a deep discount below AWP – thereby making millions for docs and dispensing companies, and costing employers and taxpayers those same millions.

Read the study and come to your own conclusions.

Broadspire Medical Director Jake Lazarovic M.D. just published an interesting paper on Accountable Care Organizations and Workers’ Comp. Download it and read it on your next flight; it’s an excellent synopsis and poses intriguing questions.

Enjoy the weekend – and remember to 

A – turn off the work email.

B – Put your “away” message on work voice mail.

C – Enjoy the fall weather!

Today’s catch up leads off with some pretty grim news.  Pennsylvania’s drug problem is getting worse.

WCRI’s just-released report on physician dispensing drugs to work comp claimants in Pennsylvania provides a clear warning to the Keystone State’s employers and taxpayers – costs are going up and they are getting screwed.

Without effective controls on the practice of dispensing, PA saw physician dispensed medications increase from 17% of total drug costs to almost half within four years, due mostly to a huge markup in prices.  In one of the more egregious examples, doctors were paid $7.89 per pill for generic Prilosec, compared to $0.67 per pill at Walgreens.

That’s 1178% of the retail price.

For a medication that probably isn’t needed in the first place.

There’s legislation pending in PA that would go a long way to fixing the problem, legislation backed by labor, the Chamber of Commerce, insurers, and the Pennsylvania Medical Society. The only opponent is – ostensibly – the PA Orthopedic Society.  My bet is the real opposition is backed by the dispensing companies who are making ungodly profits and contributing some of their ill-gotten gains to the effort.

And those dispensing companies are backed by investors – one of if not the major player here is dispensing “technology” company Automated Healthcare Solutions – which is owned by giant private equity company ABRY Partners.

As a good friend in the private equity world once told me, there are two types of investors in work comp – those who look to do well by reducing costs, and those who look to do well by increasing costs.

ABRY is the latter. Perhaps PA employers should send ABRY’s Hilary Grove – an AHCS board member – an email to get her thoughts…hgrove@abry.com

Other news of import…

Another hat tip to WCRI for their excellent webinar on recent developments dealing with opioids in work comp.  The underlying reports on long-term opioid usage and multi-state comparisons of narcotics in work comp are well worth the read. Notably dispensing docs profit from prescribing and dispensing opioids…perhaps Ms Grove can address this as well… (hat tip to BI’s Stephanie Goldberg)

From Sandy Blunt comes this basic lesson – more than anything, business success is about getting the basics right.  Really understand the fundamentals, handle the work efficiently and correctly, and respond to customer service needs.

From a colleague comes this on compounding–

Not sure if you heard about physician compounding bypassing the pharmacist.  I attended PAINWeek and visited a booth by AbbyJenn.  They are a marketing organization that will set up compounding within a physician’s practice (just buy 3 pieces of equipment or we can arrange a lease) and use staff or hire a pharmacy tech (they will train in 30 minutes) so compounds can be produced and delivered in 10 minutes and the doc can make the profit.

They provided a sheet with one prescriber’s business in August, and compounds are going out the door paid by ins at $1400.  They also offer a formulary of typical topical mixtures to “maximize revenues,” will bill insurance & WC with “immediate claim adjudications” (and may get preapproval, but I am not clear on this point), and call the patient directly when it’s time for a refill!

OK, that’s all I can deal with today.  Keep fighting the good fight.

is up at Healthcare Lighthouse.  As the Congressional recess begins, we wonks can spare a minute to think – and this edition will help spur those thoughts.

A bit more information on my least-favorite subject – Medicare Set-Asides.  After my post last week on NCCI’s recent report on MSAs, I heard from a couple folks seeking to clarify/educate/help me understand that there’s a bit more to the picture, and just before I was about to go to virtual print, along comes this excellent post featuring Jennifer Jordan Esq. of MedVal.

A couple key points.  First, as noted in last week’s post, the NCCI report was based on data from the NCCI data call and Gould and Lamb.  What I SHOULD have been more clear on was that this data “set” may not be representative of the entire universe.  To that point, a couple colleagues suggested there is a lot more nuance here.

First, a word on sources.  As Colleague A noted, many companies don’t send their MSAs to CMS period, and some just send those over X dollars.  Some payers (the Hartford being the largest I’m aware of) handle their MSAs in-house.  And, there are lots of other outfits out there that do MSAs, that have somewhat different perspectives based on their workflow and client base.

Second, unbeknownst to be, the change in vendors handling MSAs may well have had a big impact on the mass approval that occurred last December (thank you Colleague B).  Evidently the prior vendor did not have to continue handling those that were “in process”, and the new vendor wasn’t contractually obligated to handle them either. Somehow, the new vendor did end up handling them – with the result that almost all were processed in a short period, and the vast majority were approved as is.

Third, Jen Jordan knows way more about this than I ever will, so I’d encourage you to read her take on the NCCI report.  Among the key takeaways –

• juris drives a lot – in some states you can’t settle medicals, while others have convoluted settlement regulations.
• some MSA companies build high cost MSAs as they want them all to go thru the first time, while others are much more conservative, leading to lower total costs.
• It may well be that turnaround times aren’t getting much better these days
• Jen notes that the percentage of MSA dollars allocated to drugs is actually bifurcated, with drugs accounting for about three-quarters of the cost in a big chunk of MSAs and relatively little of the total cost in another chunk.  That said, she notes  “Drugs are and forever will be the major cost driver in the majority of MSAs”

What does this man for you?

Listen to the experts, and I’ll redouble my efforts to avoid writing about MSAs and direct readers to those who actually understand this stuff.

 

If the diagnosis isn’t right, there’s a pretty good chance the treatment won’t be right.

A while back I had an interesting conversation with folks from Best Doctors about this issue, and they provided some interesting statistics about the incidence of misdiagnosis.

• The American Journal of Medicine reported that at least 15% of all medical cases in developed countries are misdiagnosed.
• Even doctors are not immune to misdiagnosis:  According to The New England Journal of Medicine, 35% of doctors have reported errors in their own care or that of a family member.
• A July 2012 BMJ [British Medical Journal] Quality & Safety paper found that of 5,863 autopsies studied, 28% had at least one misdiagnosis.
• A study in Mayo Clinic Proceedings of 100 autopsies found 26 of 100 patients who died in the hospital had been misdiagnosed. Same study also found “The number of missed major diagnoses remains high, and despite the introduction of more modern diagnostic techniques and of intensive and invasive monitoring, the number of missed major diagnoses has not essentially changed over the past 20 to 30 years.”
• Review of pathology resulted in changes in interpretation in 29% of breast cancer cases, while in 34% of cases, a change in surgical management was recommended.  A second evaluation of patients referred to a multidisciplinary tumor board led to changes in the recommendations for surgical management in 77 of 149 of those patients studied (52%) (University of Michigan Comprehensive Cancer Center.)

Best Doctors’ own data for US-based cases in 2013 indicated they corrected or refined diagnoses in 37% of cases, and corrected or improved treatment in 75% of cases. 

Of course, BD’s cases are more likely to have a misdiagnosis; their clients send them claims that look problematic.

With that said, there’s no question diagnosticians can get it wrong; in fairness, it can be pretty difficult to pinpoint the specific physiological or anatomical issue that is causing a patient’s symptoms.  As an example, identifying the cause of back pain is notoriously difficult, especially when an MRI indicates an abnormality.  Liberty Mutual’s recently-published research spoke to this issue directly:

Claims in which MRI was performed either within the first 30 days of pain onset or when there was no specific medical condition justifying the MRI yielded significantly higher medical costs, even after controlling for severity. The study found these early or non-indicated MRIs led to a cascade of medical services in the six-month period post-MRI that included electromyography, nerve conduction testing, advanced imaging, injections or surgery. These procedures often occurred soon after the MRI and were 17 to nearly 55 times more likely to occur than in similar claims without MRI.

“Being a highly sensitive test, MRI will quite often reveal common age-related changes that have no correlation to the anatomical source of the lower back pain,” said Glenn S. Pransky, MD, MOccH, Center for Disability Research.

What does this mean for you?

The lesson here is clear – too much reliance on technology can be counter-productive.  And patients who demand MRIs are not helping themselves. 

Today’s catch-up is pretty workers’ comp-centric.  Lots going on, so here we go.

The ACOG (APAX-Coventry-OneCall-Genex) conglomeration continues.  A couple of items of note; APAX is out recruiting several execs to add depth and experience to the senior management ranks.  They are looking for case management pros, and word is at least one former Coventry exec is being targeted for a return.

On the Coventry network side, a well-informed source indicates a couple hospital providers in TN and GA recently renegotiated a new contract with Aetna……and with a significant decrease in the discount % below fee schedule.

On top of the news that the Geisinger and Washington hospital system contracts did NOT include workers’ comp, it is not surprising that payers are seeing a decline in “savings” from the Coventry network.

Cheers from here for former Oregon SAIF CEO John Plotkin; an Oregon court just ruled that former CEO Brenda Rocklin is NOT entitled to a state-paid defense of Plotkin’s suit against her and others.  Rocklin was allegedly involved in ousting Plotkin based on what I can only describe as ludicrous, made-up, laughable charges based on statements by Plotkin that, if they were actually made – which is highly doubtful in some cases – merit no punitive action at all.

Seriously, asking an actuary to speak English is “culturally insensitive”? Since when are actuaries a “culture”? Warning a colleague that your dog is a “humper”? talking about a goats “teats”? Even this liberal progressive Democratic ACLU member Obama fan can’t fathom how anyone could possibly construe those comments as “offensive”.

Kick their asses, John! (and so I am not misconstrued, “asses” means their butts, not their donkeys)

At another state fund, things continue to spiral down.  The latest news (courtesy of WorkCompCentral’s Ben Miller) from North Dakota regards WSI’s (state fund) use of “Independent” medical examiners – which look anything but.

 

Fully three-quarters of the IMEs support the WSI adjuster’s position.

So, no big deal, right?

Wrong.  Those (very) few who follow WSI know long-time and highly-regarded Medical Director Luis Vilella recently resigned.  Why?  Well, it appears his concerns about medical decisions were a major factor; evidently adjusters and their legal department used “outside” medical experts instead of Dr. V.  The full story on this rather distressing – and all too common) lack of judgment by WSI senior management is here.

Notably, David DePaolo noted just yesterday that state requirements around IMEs may have made it difficult for adjusters to locate in-state physicians able and qualified to perform IMEs.  HOWEVER, this is a separate issue from the Dr V problem as it pertains to IMEs and not peer reviews.

Meanwhile, Karen Foshay has produced a three-part series on the California compounding mess.  The FBI is involved, an infant has died, and one of the alleged participants was recorded saying ““I’m a behemoth, I make 8 to 10 million a month.”

Is there a place for compound in workers’ comp? Yes. HOWEVER, the legitimate use of compounds is all too rare as crooks, thieves and liars are using compounds as the route to huge profits, regardless of the consequences for patients, employers, and taxpayers.

Hope your weekend is excellent!

is up for your reading pleasure at the Health Business Blog.  David Williams has selected the best of the last month’s posts on reform implementation, cost control, and various and sundry other topics to give you a quick take on all things health policy related.

The first week of September marks the start of the busy season in health care, insurance, and workers comp.  This week certainly maintained that tradition.

here’s what I noticed this week.

Health care costs

The news this week was pretty good – current health care cost trends are significantly lower than earlier projections, although predictions for future increases remain higher than we’d like.  That said, recall past predictions weren’t that accurate.

While we don’t KNOW what the impact of ACA, recovering employment, and health care system chances will be, we can look to Medicare – which isn’t affected much by the economy.  Jonathan Cohn’s take: “the slowdown in Medicare spending (which has little to do with the economy or changes to private insurance) is a powerful indicator that health care really is becoming a more efficient enterprise.” [emphasis added]

Another perspective is from the Washington Examiner – you can tell their bias as they lead with “President Obama’s health care law” – which PPACA decidedly wasn’t. Disregarding the Examiners’ disregard for accurate reporting, they cite a CMS actuary study which indicates government spending on health care will increase from 41% of the total to 48% in 2023.  That is accurate – however recall that CMS’ past projections for Medicare and medicaid growth have been shown to be too high.

 Health reform implementation

One of the concerns about PPACA was the employer mandate would encourage smaller employers to move workers to part-time status.  Early indications are there isn’t much of a shift – if any – to part-time work due to PPACA.  Rather the slow recovery of the economy seems to be the key factor.

A great piece by Incidental Economist Austin Frakt (a long time Health Wonk Review contributor!) in WaPo’s Upshot blog finds that the more competition in local markets, the lower the insurance premiums are.  Specifically, Austin notes the absence of United Healthcare from markets led to premiums that were 5.4% higher than they would have been with UHC participating.

Another take is that premiums in less competitive states were higher than in those with more health plans participating in the markets.

Pennsylvania is joining the ranks of the sane states that are expanding Medicaid, and in so doing will avoid:

*   $37.8 billion in lost federal spending over the next decade

*   $10.6 billion in lost hospital reimbursements over the next decade

*   380,000 low- and moderate- income people would not gain coverage in 2016

Workers’ comp

The BIG news just came out today – a study by McClatchy found rampant misclassification of workers as independent contractors receiving money from the 2009 stimulus. This is a damning indictment of governmental oversight, and one that demands our attention.

Liberty Mutual produced an excellent study that appears to indicate back pain patients who got MRIs early on had worse outcomes than those who did not have MRIs.  Their conclusion:

The impact of non adherent [not consistent with medical treatment guidelines] MRI includes a wide variety of expensive and potentially unnecessary services, and occurs relatively soon post-MRI. Study results provide evidence to promote provider and patient conversations to help patients choose care that is based on evidence, free from harm, less costly, and truly necessary.

Kudos to Liberty for conducting this research.

Remember – no emails, no business after 5 today – unplug!