Thanks to Hank Stern for breaking away from his client services to host this biweek’s edition of Health Wonk Review. Great quick read will get you up to speed on what’s really happening in the health policy and insurance world!

Minutes ago, Xerox officially announced it is acquiring ISG Holdings, parent of Stratacare and Bunch, for $225 million.

In its announcement, Xerox claimed that the company is now the “leading provider” of work comp bill review services; that looks like a reasonable claim as the combined entity processes around 23 million bills via outsourced bill review and SaaS (where the payer does the actual processing using Xerox’ application).  There’s no question adding Stratacare to the company’s current CompIQ platform makes it a much more formidable competitor.

It also further consolidates a business in dire need of consolidation.  There are now four significant players; mcmc, Medata, Mitchell, and Xerox.  (what’s with all the “M” names??)

(I don’t include Coventry in the mix as their BR 4.0 application is rapidly approaching obsolescence.)

As I noted last week, “While Xerox will now own two platforms, I’m thinking we will see current CompIQ customers converted to Stratacare.  CompIQ has not been having all that much success of late, so this may well rejuvenate what was becoming an also-ran in the bill review space.” I’d add that it makes no sense for X to continue to support two applications, however they will have to do so until their contractual obligations expire, and perhaps a bit longer if customers demands are firm enough.

Xerox is reaching out to customers today, and my educated guess is they are discussing:

• if and when customers can expect to be converted to one or the other platforms;
• other benefits that X can bring to the party, such as document management and off-shore processing;
• staffing and account service plans, although it is likely too early to say anything definitive, so expect something along the lines of “business as usual”.

What I find interesting about this is Xerox’ decision to not only stay in the work comp service business, but to invest a couple hundred million now, and likely millions more in transition costs.  It makes sense; comp is an industry crying out for automation and streamlining of business processes, which is precisely what Xerox does.  There’s a lot of opportunity, especially when comparing work comp to other health-related businesses such as insurance, Medicaid, and Medicare.

Xerox can take much of what it learned there and use it to strip cost and inefficiencies out of work comp – and we all know there’s a LOT of both.  We’ll see how this develops, and if  they really make a push in this sector or are content to just muddle along.  I’d bet they make the push…

I’d be remiss if I didn’t touch on Bunch.  What used to be a leading light in the managed care space has dimmed appreciably.  The purchase by ISG some years back was puzzling, and the rationale didn’t get any clearer as time went on.  Bunch has lost business in its target market and failed to replace those lost customers with new ones.  I just don’t get why they bought Bunch; there may well have been some sound strategic reason, but the follow-thru was noticeably absent.

What does this mean for you?

Wait and see.  The next couple of months will tell the tale; as always actions are credible, words are (much) less so.

I’m beginning to think this is a misnomer, as there’s so much going on these days it is impossible to “catch up”.

We’ll try.

I did not attend RIMS this year (or the last few).  While the must-go for brokers and P&C consultants, it has become less important for the work comp crowd as the content tends to be basic while the time commitment is high. That, and a surfeit of client work, made the decision an easy one.  From what I hear there was a lot of buzz about deals pending and rumored.  In addition to the Stratacare-Xerox transaction, the sale of MedAllocators is said to be close while Healthcare Solutions is off the market.

I do regret missing the MedRisk soiree; evidently it was the event of the conference; there were 800+ there listening to a terrific violin quartet amongst other entertainment innovations.  That, and the billboard greeting attendees…

IAIABC’s upcoming webinar on compound drugs is scheduled for May 29; you can register here.

Meanwhile, B sent me a link to the most blatantly profiteering pitch to docs I’ve ever read. The pitch is for something called terocin, which is nothing more than Capsaicin, Methyl Salicylate and Menthol – to figure out if you are getting billed for this stuff, here are the NDC codes.

and the profits for the docs – and the sales reps – are enormous.  Of course, their profits mean higher costs for employers and taxpayers…

Speaking of scum, I keep getting emails asking for donations to Charlie Crist’s campaign for Governor of Florida.  Crist’s pitch is this:

 What we have today in Tallahassee isn’t working.

Governing for the people has been replaced with cronyism and government on the fringes. Financial bullies and special interests have drowned out the voices of people like you.

What a load of crap.

Much as I abhor Rick Scott, Crist is exactly the kind of sleazeball/hypocrit the Sunshine State doesn’t need.  Recall then-Governor Crist got a huge contribution from drug dispensing “technology” firm AHCS after the then-Governor vetoed a bill that would have killed up-charging for repackaged drugs – a bill that had been passed by unanimous vote in the state House and Senate.

As a result of Crist’s veto, Florida’s employers and taxpayers got stuck with hundreds of millions in higher workers’ comp costs and it took four years to come up with a legislative fix that is no fix at all – in fact it validated the practice of dispensing and will result in hundreds of millions in additional costs.

Crist is everything that is disgusting about politics wrapped up in one nicely-tanned package.

An insightful column from Roberto Ceniceros on the value of UR; good to see Roberto add his voice to the growing chorus calling for more – and better – use of UR in work comp.

Finally, WCRI is out with its annual compendium of work comp laws, which cover all states plus Canada.  Check it out here.

Enjoy the weekend…

Believe it or not, Xerox. Or more precisely, subsidiary CompIQ.

While the deal isn’t official yet, word from multiple sources is it will be finalized early next week; no details on whether Bunchcare will be part of the transaction.

This will greatly strengthen Xerox’ bill review business, combining the number three and five (my guess) application providers.  While Xerox will now own two platforms, I’m thinking we will see current CompIQ customers converted to Stratacare.  CompIQ has not been having all that much success of late, so this may well rejuvenate what was becoming an also-ran in the bill review space.

This yet another example of the rapid consolidation occurring in the work comp services space, and is by no means the last deal we’ll see for a while.  There are several more in process as I write this, and that doesn’t count the ones that I don’t know about.

More on the implications of all this later.

 

 

I was in Atlanta most of the week at the third annual Rx Drug Abuse Summit, a terrific-if-somewhat-depressing meeting of 1300 folks focused on ending the abuse of prescription drugs.  I’ll do a series of posts on this next week; a couple highlights are:

• after one session  an employee of a big pharma company told a speaker he would be hearing from the pharma company’s attorneys.  Knowing the speaker well, I really hope the pharma-bully follows thru.  
• There was MUCH discussion of Zohydro, the process by which the FDA approved it despite a crucial 11-2 vote against approval, and the potential damage that will be done by Zohydro.  Phoenix House and PROP leader Andrew Kolodny MD led one discussion; his quiet and measured demeanor all the more compelling given the outrageous wrong he was describing.

More later – for now, PBM PMSI-Progressive and Millennium Labs teamed up to research the impact of a comprehensive drug testing program on claimant drug prescriptions.  There was a drop in ALL drug utilization, with benzos down 51 percent, opioids 32 percent lower, and an overall 26 percent drop in utilization of all medications. The claimant population was not the easiest either… (full disclosure – the UDT lab involved is Millennium Labs, an HSA consulting client)

From Alaska comes one of the more innovative approaches to opioid abuse in work comp; a bill that would allow employers to not pay for the next refill for claimants failing a urine drug test. Seems reasonable, but how about a refund for the cost of the last script too?

Finishing up the pharmacy part of today’s post, IAIABC’s upcoming webinar on compound medications will be on May 29 (sign up details available shortly).  Covering CompPharma’s just-released research paper, the webinar will examine the scientific literature, laws and regulations regarding the safety and efficacy of these medications, how different jurisdictions regulate them, and the prices and reimbursement methods associated with compounds.

Welcome news arrived with this morning’s WorkCompCentral; Drobot, he of the alleged bribery scandal wherein dollars were exchanged to ensure California employers had to continue paying double for surgical implants, has pled guilty and faces a maximum of 10 years in jail.

Meanwhile in the real world outside of workers’ comp, health plan giant Aetna is booming.  The Hartford-based insurer announced 230,000 new members so far this year, and are projecting a total of 800,000 to 1 million new members for 2014.  Best of all, net income jumped 36 percent.

Happy last weekend in April!

 

 

Courtesy of Louise Norris, who took time away from her business and young kids to carefully select and post a great edition.  Love Louise’s thoughtful, respectful, and well-informed take on each of her contributions.

She’s a prize!

Another quick week is done, altho after the two inches of snow Tuesday I’m not sure that’s a bad thing.  So here’s what happened while we were digging out.

There’s a bunch of news re ACA enrollment and the impact thereof; I’ve picked out the key parts (as I see them) for your edification.

The latest projections on PPACA enrollment are out, and the Administration is touting a higher-than-even-originally-projected 8 million insureds. Notably, this does NOT mean all are newly insured, and does not exclude those who have not paid their premiums as of yet (for the newly-enrolled population, there’s no way to tell until their premium payment late period has expired.

Why aren’t GOP-led states jumping on the Medicaid block grant bandwagon?  If they are so sure they can do a better job (and I don’t doubt that some can) than the feds, what’s with the reluctance?  Bob Laszewski asks this vital question – and the answer is…

From investment research firm L.E.K. comes an excellent review of the impact of health care reform on hospitals.  Yes, it’s a complex issue, and no, don’t say you don’t have time to read it.  This is a very good piece, and relevant for work comp as hospital expenses are rising in many states. Of note – Medicare’s hospital expenses are projected to drop over the next decade – there may be an effort on the part of facilities to make that deficit up from…somewhere.

Health insurance premiums will be 15% less than predicted next year – so says a just-released study by the CBO, which did that initial prediction back in 2009, just before ACA became law.  The CBO study also lowered the total cost projection for ACA by $105 billion over the next decade.

Finally, with RIMS coming up in just over a week, there may well be a couple big deals announced end of next week or at the show in Denver. I won’t be there (too much client work, and work comp isn’t a big part of the show) but many will.  Expect at least one announcement; there may well be two deals completed by the time the show opens.

Here’s hoping the sun shines on your weekend.

Happy spring – hope the weather where you are is as great as it is in the northeast…we finally get to tell our friends in Florida that things are just fine, thank you.

Off we go to catch you up before you start the weekend

First, thanks to Billy Wynne for hosting the April Fool’s Edition of Health Wonk Review. There’s discussion of Obamacare’s status, the ICD10 situation, medical devices and pharma, and a great piece on hospitals and health systems’ future.

WorkCompWire’s got the very welcome news that the long-sought TRIA extension may happen sooner rather than later – good news indeed for the WC industry.  There’s a bill moving in the Senate to extend TRIA for seven years, raise the deductibles and make other changes necessary for bi-partisan support.

Pennsylvania’s House unanimously passed a bill limiting physician dispensing of drugs to work comp claimants to 15 days from the date of injury.  That’s great – but not as great as it seems.  Word is opponents are going to work to slow/stop the bill in the Senate.  Email your Senator and voice support for HB 1846.

 

The workers comp investment world is all abuzz; there are at least four pending transactions with two rumored to be looking for a pre-RIMS close date.  Whether they make it is anyone’s guess, but the opportunity to make a splash at the annual confab is plenty of incentive for all parties.  Expect hoop-la and trumpets blaring, announcements touting the wonders the new deals will have for all, and accolades for the geniuses who got them done.

Then ask yourself, this helps me how?

According to several recent analyses, insurance enrollment has increased significantly from last September to this April.

The latest, from RAND, indicates about 9.3 million more are insured, decreasing the uninsurance rate from 20.5 percent to 15.8 percent.

For several other estimates. the range is from 5.4 million to 9.5 million additional insureds; but – and it’s a big but, these are estimates from surveys of small populations.

From California Healthilne comes this [emphases added]:

Last month, the Los Angeles Times reported that at least 9.5 million previously uninsured U.S. residents gained coverage under the ACA during the initial open enrollment period for the exchanges. The analysis was based on various national surveys and enrollment data (California Healthline, 3/31).

Earlier this month, a study by the Urban Institute’s Health Policy Center reported that as many as 5.4 million previously uninsured residents gained coverage since the federal and state insurance exchanges were launched in October 2013 (California Healthline, 4/4).

Last week, a Gallup-Healthways Well-Being Index survey found that the uninsured rate had fallen to its lowest since 2008, with 14.7% of adults lacking coverage in the last half of March (California Healthline, 4/7).

I would quickly emphasize – again – that these are estimates, and likely to be somewhat off.  However, they are net of dis-enrollment/cancellation.

What does this mean for you?

Looks like this is here to stay; it would be very, very hard to tell 5 million people “never mind.”