May
11

NCCI’s second day – state v fed regulation

Current Florida Insurance Commissioner and NAIC Chair Kevin McCarty led off his talk with a description of drug repackaging as a “license to steal.”. I absolutely agree. He expressed optimism when noting the legislative effort will continue next year; on that I am less sanguine.
Most of his talk was about the “incremental encroachment of the federal government into the regulation of insurance.” Noting that insurance has been regulated under McCarran Ferguson for decades, McCarty opined that the current state-based regulation has worked pretty well, if somewhat inefficiently.
McCarty took exception to the new Federal Insurance Office (FIO) created by the Dodd Frank bill. While FIO is explicitly not a regulatory agency, McCarty noted their various functions seem pretty similar to those performed by regulatory agencies. While much of the speech was a pretty dense, acronym-intensive discussion of financial stress tests, bank regulation, McCarty detailed FIO’s various research and reporting functions.
Continuing his advocacy for the state-based regulatory system, McCarty noted that there are very different market needs in different states, which require different regulations, while stating that it is necessary to reduce the frictional costs (his characterization) inherent in the state-by-state regulatory environment .
While McCarty et al may decry the interference of federal authorities in the insurance process, payers may be less negative after considering the additional costs inherent in state-specific regulation. According to a report in Insurance Journal earlier this week,
“Tyler Leverty, a professor of finance in the Tippie College of Business, says that the expenses associated with meeting regulations in every state in which an insurance company does business drive up compliance costs by 26 percent when compared to companies that are regulated by only one state.
“These high regulatory compliance costs reduce the technical efficiency of firms, deter firms from operating in additional states, and increase the price of insurance,” says Leverty.”
Finally, McCarty was asked for his views on the interstate sale of health insurance products, and seemed somewhat uncomfortable with the topic (not surprising as this is one of the main ideas promoted by GOP opponents of health reform)- noting that he wanted some regulatory authority over any out-of-state policy sellers to protect purchasers; McCarty stated a couple times that he did not want to oversell the benefit of interstate insurance sales, but concluded by allowing that they would probably most help with short term policies for college kids etc. There was a caveat; he thought “everything” should be tried, but he was not enthusiastic in that suggestion…


Apr
3

No, the Feds aren’t taking over workers comp

My last post was, in fact, MCM’s annual contribution to the national celebration of April 1. Over the last eight years I’ve had a lot of fun with this, only occasionally (once, to be precise) going just a tad too far.
Rest assured it only happens once a year – the prank, that is. Going too far may happen a bit more often.
This year’s post was purposeful – for two reasons.
Rumors about the Feds’ purported interest in getting more involved in workers comp continue to pop up every now and again, as much as we try to show how this a) makes no sense and b) there’s no one in DC with any authority remotely interested in stepping into workers comp. The April 1 post was my attempt to highlight the absurdity of the ongoing ‘debate’; there is no ‘debate’, the Federal government is not taking over workers comp.
On a broader scale, I’d ask that you, dear reader, view what you read here and everywhere else for that matter with a healthy dose of skepticism. And while you’re at it, challenge your own firmly held beliefs. None of us has sole proprietorship of the “truth”, we all can learn from each other, but only if we’re willing to listen.
We now return to our regularly scheduled blog postings…


Feb
1

Hello, North Dakota!

An open letter to the press, business community and people of North Dakota:
The authors of this letter are journalists, columnists, bloggers and content publishers for the workers’ compensation industry across the United States. We are a politically and professionally diverse group. We do not agree on everything, yet find ourselves of one opinion on a highly critical matter. We are competitors who are now colleagues for a common cause; to bring light to a serious injustice being committed within your state.
The prosecution of Charles (Sandy) Blunt was, in our view, an outrageous and almost farcical event. It is, in the final analysis, a travesty that has damaged the national view of your state, hampered the operation of a State agency, and ruined the life of a good man wholly undeserving of such results.
Sandy Blunt was Director of North Dakota’s Workforce Safety & Insurance from May of 2004 until December of 2007. He was, as you are likely aware, prosecuted by state authorities for “misspending government funds”. Specifically, he was charged and convicted on two counts:
1) During his almost 4 year tenure his agency spent approximately $11,000 on employee incentive items, including flowers, trinkets, balloons, decorations and beverages for Workforce Safety and Insurance employee meetings, and on gift certificates and cards in small denominations for restaurants, stores and movie theaters. Blunt personally approved some of these expenditures. Others were made by managers as part of daily operations under his watch. Not a dime went into an employee’s pocket, nor did Blunt personally benefit from any expenditure.
2) His agency paid $8,000 to an employee, David Spencer, for sick pay when he was not apparently sick, and it also failed to collect $7,000 from Spencer when he left prior to the end of his employment agreement. The $7000 was for moving expenses incurred that prosecutors felt Spencer owed the state. Blunt’s position was that the agency was not entitled to collect these funds, since Spencer’s departure was not voluntary.
All told, the state prosecuted Sandy Blunt, and he is now a convicted felon for “misspending” $26,000 of government money.
No one has ever alleged that Blunt personally benefited from any of these expenditures. Blunt was acting like other capable, ethical North Dakota executives ‐ in the best interest of customers and of the mission of his employer. In our industry it is considered a best practice to provide employees and supervisors with incentives. It is not frivolous, it’s necessary, and what every employer should do.
The first of these two charges would be, to many people, laughable if it were not for the damaging consequences associated with them. The notion that buying inexpensive incentive items for your employees could result in a felony conviction is simply stunning. This would not be elevated to a criminal status in most states in the nation. The fact that it is in North Dakota should have a chilling effect on businesses looking to move there.
The second and more serious charge, involving the sick pay and moving expenses of employee Spencer, has been fatally undermined by the revelation that the prosecutor in the matter, Cynthia Feland, withheld critical evidence from the defense – evidence that largely clears Blunt in this area. A disciplinary panel for the North Dakota Supreme Court has found on November 7, 2011 that:
“Cynthia M. Feland did not disclose to Michael Hoffman, defense attorney for Charles Blunt, the Wahl memo, and other documents which were evidence or information known to the prosecutor that tended to negate the guilt of the accused or mitigate the offense.”
Withholding of evidence by prosecutors is one of the most serious acts of prosecutorial misconduct in North Dakota and all other states. In recognition of this, the panel recommended Ms Feland’s license to practice law be suspended. We urge that you read the entire report of the panel, including the penalties the board recommended be imposed on Ms. Feland. For the report, go here.
Had the prosecutor not withheld evidence, in all likelihood the case would never have come to trial, and the reputation of Blunt and the WSI would be free of taint. The evidence in question shows that WSI’s auditor’s own findings backed Blunt’s position on payments related with Spencer. However, those findings were not made available to the defense, and the prosecutor was found to have allowed testimony to be given at the trial that directly conflicted with information she had. As we indicated, Feland, now a judge in your state, has been recommended for suspension and a fine over these findings.
Yet Sandy Blunt remains a convicted felon. His crime? Buying balloons, trinkets and $5 gift cards – for his employees, not for himself. For that, Blunt, who is married with two children, has had to spend half a decade, and untold thousands of dollars trying to clear his name.
Some of us have known Sandy for quite a while. Some have come to know him while learning of his situation. Others of us have never met Sandy, but recognize the tenuous nature of his treatment. Collectively we speak to thousands within our industry every day. Our opinions have been clear; this situation needs the light of truth shone brightly upon it. The time and resources expended prosecuting a man on such questionable grounds should be more closely examined, by the business community, workers compensation professionals and the media in North Dakota.
Sandy Blunt is a good and decent man. He deserves better. So, it would seem, do the people of North Dakota.
Peter Rousmaniere
Consultant & Writer
WorkingImmigrants.com
Robert Wilson
President & CEO
WorkersCompensation.com
Joseph Paduda
Principal, Health Strategy Assoc, LLC
ManagedCareMatters.com
Rebecca Shafer
LowerWC.com
David DePaolo
President & CEO
workcompcentral.com
Tom Lynch
Founder & President
Lynch, Ryan & Associates, Inc.
Jon Coppelman
Senior Vice President
Lynch, Ryan & Associates, Inc.
Julie Ferguson
Consultant & Editor
WorkersCompInsider.com
Henry Stern, LUTCF, CBC
InsureBlog.net
Sandy Blunt related articles from these authors:
Blunting Political Vindictiveness
What’s wrong with Sandy Blunt.
Is justice on the horizon in North Dakota?
Let Me Be Blunt: Sandy Got Screwed in North Dakota
The Square Wheels of Justice in the Peoples Republic of North Dakota


Jan
21

MCM’s position on SOPA and PIPA

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
5

Changes to Managed Care Matters

Nothing drastic, so no, we’re not going away or selling the site to the New York Times, and despite rumors to the contrary, MCM has not been acquired by a very large TPA.
No, we’ve added a feature that should make the blog an easier read on mobile devices – blackberries and iPhones and Droid phones too. Just click on the box on the right hand side of the home page and voila’. We’ve heard from a couple readers that it’s a bit tough to read posts on their handhelds, so hopefully this will help out.
Or, even simpler, add this link to your favorites – it’s a direct connection to the mobile feed.
We’re looking at making some blog upgrades later this year – if you have any usability gripes or issues, let us know and we will keep those in mind as we plan our next iteration.
Also coming in the next week are posts on:
– results of the eighth annual Survey of Prescription Drug Management in Workers Comp
– a review of Paul Starr’s new book on health reform in America
– an analysis of Rick Santorum’s health care record
– the new NCCI report on aging and workers comp injuries.
Vacation was great, and it’s good to be back.


Dec
29

MCM is on vacation till Jan 5

It’s been a long year – productive, busy, but most of all loooong. Time for some R&R.
I’m gone on family vacation till January 5; have a great holiday and see you in the new year.


Dec
14

Friends of Sandy Blunt

Bob Wilson of WorkersCompensation.com fame has a new group on his LinkedIn page – the Friends of Sandy Blunt.
This isn’t one of those exclusive, fancy clubs, merely a virtual gathering of like-minded intelligent and insightful folk who share a mutual respect and admiration for Sandy.
I’m honored to be one of the founding members, and look forward to seeing you there.
For those who don’t know Sandy, here’s a quick note on why you’ll love the guy.
The former head of North Dakota’s state workers comp fund has been – and continues to be – vilified by a few people who obviously don’t know the guy. (more on the appeal in a future post).
Prosecuted for ‘misuse of funds’ by a rogue Prosecutor who withheld exculpatory evidence, Sandy’s life has been ruined because he approved payments for balloons, small ($5 – $10) gift cards, sweets, and cakes for employee recognition events, along with refusing to seek repayment for relocation expenses for an employee terminated for performance (which was legal and appropriate).
Well, I do know the guy, and there’s plenty wrong with him. Here’s the real scoop on this horrible guy/abuser of the public trust/scofflaw/criminal mastermind…
Well, he worked for George HW Bush in the White House (our politics are pretty different, but I keep hoping he’ll come over to the bright side).
He’s an avid, very well informed – and extremely loyal – Cleveland sports fan. (Gotta respect that, even if you don’t understand it)
He isn’t a golfer. (Me neither, so that’s actually a big plus)
I don’t think he can dance.
He went to one of those fancy Eastern big-name business schools (Wharton, I think).
He is such an Eagle Scout (which he actually is) that he won’t let his kids download music from file-sharing services because it is unethical. I’m sure the young Blunts think he’s horribly unfair.
For a non-IT guy, he’s pretty good at tech stuff, making me think he was an AV club guy in his high school days (and no, that’s not meant pejoratively).
Sandy was COO of Ohio’s Bureau of Workers Comp before he was recruited to professionalize the NoDak state fund (so much for that honest effort). By all accounts he was well-liked, and more importantly, very well respected in that role. But still, he was a workers comp exec, and you KNOW what those people are like…
He’s unremittingly positive, unerringly cheerful, and undeniably an upbeat person. Despite what the ‘criminal justice’ system has done to ruin his life, Sandy’s always positive.
I don’t get it.
So – click here and join the party.


Nov
17

Treating chronic pain: alternatives to opioids

After all the discussion of drugs and their role in pain management, and the problems inherent in using drugs for pain.
MedRisk CEO Shelley Boyce introduced experts from the Netherlands and the US. There are several key differences between the US and the Netherlands. The Dutch health care system is compulsory and based on managed competition between insurers; consumers can switch insurers yearly without penalty. The disability system is employer based with total annual costs of about 465 million euros.
Rehab centers are licensed, with Ciran one of the largest providers with annual revenue of about 16.6 million euros. Interestingly Ciran operates on a franchise model, with uniform operating standards and guidelines. Ciran doesn’t use any medications in their work, instead relying on their structured approach, inclusion of cognitive behavioral therapy, and pre-planned treatment course that is developed in advance of treatment. Patient progress and achievement of goals are measured weekly.
Ciran’s outcomes are remarkable.
In a population where 77% present with musculoskeletal, pain, and mental health problems; and a large percentage have ‘claims’ more than two years old. Clearly these are tough patients. The data presented by Ciran clearly indicate improvements in physical function, reduced levels of depression and anxiety, and improved coping over the 16 week treatment regimen. Health complaints are also dramatically reduced and health status improved.
The session’s final speaker reported that fully 13.5% of the US population were treated for spine issues in 2006. Over the ten years before 2006, inpatient costs went up 53%, medications more than doubled, and overall cost of treatment doubled.
Yet there was no discernible improvement, and the data actually indicate functional health status of patients declined across several metrics over the same period.
That’s right: cost of spinal care doubled and outcomes were worse.
The presentation continued with what can only be described as a debunking of ideas and concepts that are commonly accepted as truisms. Spinal issues are not caused by injuries but rather by genetically-driven disc degeneration due to – you guessed it – aging.
The implications are enormous. Work activities account for 1% of disc degeneration, genetics accounts for 74%.
Back pain isn’t caused by accidents or work-related injuries or disc degeneration but by genetics. And there is no real association between herniated discs, bulging discs, or even ruptured discs and pain.
This is big news and deserves a dedicated post. I’ll do that next week.