Category: General Insurance Issues

Aug
9

Opioid Exceptionalism – why these drugs are different than all others

Posted by Joe Paduda on Wednesday, August 9th, 2017 | Comments

Greetings – David Deitz here. Joe has kindly offered to let me provide a guest post on the latest report on the opioid epidemic from the National Academy of Sciences, Engineering and Medicine (NASEM). The report is available here. It’s also 389 pages long in its current pre-publication form, and because I think there are some really worthwhile parts relevant to many of you who follow MCM, I’m going to give you my summary of the highlights.

The quick take – opioids are fundamentally different from other drugs due to the harm they can cause – and the FDA should consider this when addressing opioids. (JP observation)

Why is this report important and why should you care? Well, for one, the opioid epidemic is a true, deadly epidemic, that has left few areas of America untouched. As NASEM puts it (emphasis mine):

Current national trends indicate that each year more people die of overdoses—the majority of which involve opioid drugs—than died in the entirety of the Vietnam War, the Korean War, or any armed conflict since the end of World War II.

That’s about 90 a day. Every day. I don’t think that’s “opioid hysteria”. And WC has a lot of reasons to care, since analgesic drugs, most of them opioids, are the principal drugs prescribed for occupational injuries.

It’s worth noting that last week also saw the release of the interim report from the President’s Commission on Combating Drug Addiction and the Opioid Crisis. This report urged declaration of a national emergency – more on that below.

As many of you recognize, this is an incredibly difficult public policy issue, in which the legitimate needs of millions of patients with acute and chronic pain must be balanced with the harms opioids create. The earlier IOM report on pain in 2011 really punted on this one, but the NASEM gets right to it in the introduction:

  • How exactly does a regulator….balance, for any particular regulatory action limiting access to opioids, the otherwise avoidable suffering that patients with pain would experience against the harms, not only to those individuals and their families but also to society, that would be prevented by the restriction? (pg 1-16)

The answers from NASEM are brilliant, well-reasoned and based on large servings of evidence – not only on opioid harms, but also on efficacy for chronic pain, likelihood of use and abuse in different contexts, alternative treatments, epidemiology of addiction and value and availability of various opioid addiction treatments, to name only a few. One of the most valuable concepts going forward is the doctrine of “opioid exceptionalism” a term coined by co-author Dr. Aaron Kesselheim in the NASEM webinar (you can get the slides here).

Put simply, opioid exceptionalism means that the FDA, as well as other public agencies, should go beyond the risk/benefit paradigm they currently use for new drug approvals that is based on individual patients and consider the implications of an individual opioid to patient’s families and society.

In other words, public health considerations need to come in because the societal implications are so large for this category of drugs. Drug manufacturers and some pain management professionals (and probably, libertarians) aren’t going to like this, but I think NASEM makes a compelling case that business as usual isn’t going to reverse the trends. They don’t really mention the workplace much as part of the public health discussion – there’s an opportunity for ACOEM to push up to the table.

I won’t review all of NASEM’s public policy recommendations, but some have implications for WC, including:

  • Improved reporting and data collection. This has to include WC if it’s going to be complete.
  • A call for insurers to reimburse for comprehensive pain management, including interdisciplinary approaches. Many in WC do, but it has to get better.
  • Better patient and public education about opioids. Again, a role for WC here beginning at the first emergency department or occupational medicine clinic visit.
  • Expanded treatment for opioid use disorder. There are cost implications for employers here, but it’s the right thing to do.

Meanwhile, the President’s Commission mostly agrees, and provides some of the same recommendations. Unfortunately, there are some thorny political problems with that emergency declaration (which I agree with) – it’s difficult to reconcile recommendations to “rapidly increase treatment capacity” and expand benefits for substance abuse treatment with cuts to Medicaid.

The NASEM is the meatier of the two, is better thought through and overall is one of the most comprehensive public policy documents I’ve read in a while. Take a few minutes to look at the slides, they are a good summary of the recommendations. Where do they touch your organization?

Let’s not just hope that the NASEM report makes a difference, but do what we can to ensure it.

David Deitz, MD, PhD is principal of David Deitz & Associates, a healthcare consulting firm based in Massachusetts.

 

Aug
8

Tuesday catch-up

Posted by Joe Paduda on Tuesday, August 8th, 2017 | Comments

Lots happening this August – clearly not everyone is on holiday.

One personal note – I joined the Board of Commonwealth Care Alliance, a not-for-profit healthplan serving Medicaid and dual-eligible clients in Massachusetts. CCA takes care of the toughest population in the country; the poor, disabled, elderly, homeless, and chronically ill, and they do it very, very well. There’s a lot to be done, and I’m honored to help these amazing people.

An excellent piece by Brian Klepper exposes the reality of the commercial health insurance industry – the more care costs, the more insurers make. While I would take issue with Brian’s over-generalization about how insurers make money (a percentage of healthcare costs), the implications are vast – a medical-industrial complex now consumes a sixth of our GDP.

This is part of what’s crushing middle class America, squeezing out dollars for infrastructure, education, and innovation, and enriching a few while impoverishing many.

One who just got his virtual head handed to him is Martin Shkreli, the arrogant horse’s ass who bought a tiny drug company and jacked up the price of their drug by 5000%. He was convicted on various fraud charges unrelated to the price increase.

The real lesson here is how easy it was for Shkreli to do what many others have done – make huge profits off our for-profit healthcare system. Most just do it very quietly.

Lemonade is launching in New Jersey.

This is a very, very big deal, with insurance about as different from traditional insurance as you can get.

  • Lemonade sells homeowners and renters insurance in four states and has licenses in 9 more
  • It is a Certified B-Corp – underwriting profits are donated to nonprofits picked by policyholders.
  • It makes its money from a flat 20% fee
  • Premiums belong to the insured, not the insurer. Any unclaimed or unpaid funds are returned at the end of the year at the Giveback.
  • 10% of Lemonade’s 2016 revenue went to 14 different not-for-profits

Scoff or smirk if you will – these guys and others like them will become a major force in property and casualty insurance.

Including workers’ comp…

Workers’ comp

First up, a bit more intel on the OneCall – Spreemo “deal” following up on last week’s post…Most of Spreemo’s employees will move to OCCM, with just a handful staying behind at Spreemo. It’s not clear what Spreemo will be doing in the future, but the company’s unlikely to deliver the kind of returns owner Pamplona envisioned when they invested a couple years back.

A while back NCCI published a piece on an injured worker’s catastrophic injury. Leaving aside the poor decision that led to the injury, what’s interesting to me is how the work comp insurer approached the injury – a potential amputation. While the article doesn’t get into this, my sense is if the worker had been hurt off the job, his health insurer would NOT have gone the extra mile to try to save his leg. However, because future earnings and disability are critical to work comp, his insurer – Nationwide – was very motivated to do whatever it could to keep him whole.

The estimable Ed Bernacki MD PhD and colleagues published a paper (thanks David Deitz MD PhD for the heads up) that concludes:

Occupational injury claimants 40 years of age and older with unilateral knee and shoulder symptoms ascribed to a work event tend to have bilateral age-related MRI changes. Age-related disorders should be distinguished from acute injury.

In English, we older folks have age-related problems that aren’t caused by our jobs…

 

 

Aug
1

Work comp is fading, and that’s a big loss.

Posted by Joe Paduda on Tuesday, August 1st, 2017 | Comments

Hold on, because this isn’t going to end up where you think it is.

The comp insurance business is shrinking. Insurers are increasingly outsourcing claims function to TPAs, and TPAs are looking to move more claim-related activities in-house to capture more of a shrinking pie.

Sure, carriers including AmTrust and the Berkshire companies are growing by leaps and bounds, but most others are moving in the opposite direction. And yes, our friends in California have seen earned premiums increase – and as the largest state by far we can’t ignore that. However, insurer profits have remained solid while rates while the last two years have seen frequency drop – the first time this has happened since the Bush Recession.

Margins are very healthy, markets are competitive, and the business remains solidly profitable.

Over the last 22 years, only one saw a material increase in claim frequency.

After 2 years of essentially flat trend rates, 2016 saw a 5 percent jump in claim severity.

Work comp premiums have been flat since 2015 as decreasing claims costs and insurer discounts have balanced out higher payrolls. Overall, it looks like more employers have seen their premium rates decrease than increase.

Those aren’t just a jumble of unrelated facts and figures, rather a combination of causes and effects, all leading to an inescapable conclusion – industrial accidents and illnesses are less common than they used to be, and more common then they are going to be.

Implications abound.

Here’s a major one.  More insurers appear to be looking to outsource claims, generating growth and jobs in the TPA industry which is one of the few sectors that’s seeing this.

The service sector has consolidated rapidly with two huge PBMs dominating the pharmacy space; physical medicine owned by two other firms (one of which, MedRisk, is a client); Genex increasing it’s position as the largest case management provider, imaging already the domain of OneCall, and three bill review tech firms where once there were six. Other examples abound, all driven by the inevitabilities of a mature industry.

Yes, smaller companies, innovators, and new entrants can and are doing well, but these are by far the exception rather than the rule. Fact is, external factors and technology are rapidly shrinking workers’ comp.

I’m more than a bit frustrated by this.

I see work comp as one answer to the mess that is health care. We actually care about, and work to restore, functionality, an “outcome” that few in the group health, Medicaid, or Medicare world grasp.

What we do – when we do it right, which is all too uncommon – is what they should do – deliver care that gets the patient healthy again – defined as able to do what they did before, if not do it better.

Those pinheads in DC are arguing over insurance – which is NOT the problem.

They should be talking about why our nation’s healthcare is so crappy, and why healthcare we all pay for, and get, and that our loved ones get, doesn’t work a hell of a lot better than it does today.

 

Jul
26

How much does employer misclassification cost you?

Posted by Joe Paduda on Wednesday, July 26th, 2017 | Comments

“Independent contractors” who are told what to wear, when they’ll work, what they’ll do, and how they’ll do it are NOT independent contractors.

At least, not under the law.

But a lot of employers are skirting the law, and some are committing outright fraud. The good news is some states are starting make major progress.

WorkCompCentral’s Todd Foster has a great investigative piece in this morning’s edition detailing the progress made in North Carolina by the Industrial Commission.

This isn’t pennies, folks – this fraud cost North Carolina and the US $467 million just in lost tax revenue.

It also

  • reduced workers’ comp premiums,
  • hurt local hospitals and healthcare providers who had to provide care to injured workers with no insurance,
  • likely bankrupted workers who weren’t able to work due to their injuries and were billed for medical care, and
  • drove up costs for the legitimate businesses in NC who weren’t committing fraud.

According to investigative reporting by the McClatchy news organization,

if the level of misclassification found on 64 government-backed housing developments extends to the construction industry as a whole in North Carolina, the state and federal government are losing $467 million a year in taxes. That’s roughly the size of the budget shortfall legislators initially faced this year as they tried to find ways to give raises to public-school teachers.

The construction industry is rife with this practice, unscrupulous contractors underbidding responsible competitors by avoiding workers’ comp premiums, taxes, and labor regulations. The McClatchy investigation found construction misclassification happens on up to 40% of job sites.; the worst states tend to be in the South, where legislation has stalled in several legislative sessions.

There have been some efforts both nationally and in individual states to address this crime, but reports are it is still rampant – on smaller projects and even on federal worksites, municipal projects, huge construction sites including highways, sewer plants, schools and airports.

A lot more information is here.

What does this mean for you?

If you are a work comp insurer, service company, TPA, construction worker or legitimate contractor, you’re getting screwed by these crooks.

Jul
25

Sharing risk – a new approach to ancillary services

Posted by Joe Paduda on Tuesday, July 25th, 2017 | Comments

Priority Care Solutions just introduced a new take on ancillary services, one involving risk sharing between the payer and PCS.  

It allows the payer  – insurer or self insured employer – to set their “budget” for specific services going forward, giving the payer a stable, predictable cost.

Here’s how it works.

PCS and the payer analyze several years of claims data, assessing spend by ancillary area – say imaging and durable medical equipment. Changes in employment levels are factored in, outlier claims – typically catastrophic claims – are excluded, and a “loss pick” range (my words, not theirs) for the specific ancillary benefits are agreed upon.

The loss pick is a total cost, not a per-claim dollar amount.  If costs come in below the loss pick, everyone is happy. If costs are above the loss pick, PCS is on the hook and has to transfer funds to the payer.

There’s a bit more to it than that, but you get the idea.

To date, PCS has several payers participating in the program, most of which are self-insured employers. Not surprising, as employers and their risk managers love cost certainty.

While we’ve seen other forms of risk share in workers’ comp services, this is the first that addresses an entire spend for a type of service.  Paradigm has taken risk on a per-claim business for decades, although it has diversified in recent years to provide a broader array of claim management services.

PCS provides a pretty broad array of ancillary services, and it will be interesting to see how this goes. CEO Bob Smith is well respected and well known throughout the industry, and PCS has quietly grown by staying under the radar for some time.

Thats about to change.

Jul
24

Healthcare reform – the HWR report

Posted by Joe Paduda on Monday, July 24th, 2017 | Comments

Steve Anderson at HealthInsurance.org hosts this month’s Health Wonk Review – and what a month it is.

If you want insights from people who REALLY understand what’s happening – from across the political spectrum – this is the go-to.

Among the posts are Charles Gaba’s view of Congress’ screwups at  Trump, Ryan, McConnell & Price will owe my family $2,000 next year. Pay up, jerkweeds. Title pretty much says it all..

Louise Norris’ How Would the BCRA Impact Deductibles and Out-of-Pocket Costs? tells us why the Better Care Reconciliation Act is a double whammy..

And A Tale of Two Health Systems, Kelley Beloff, a medical office manager, offers her insights about two healthcare systems, and two very different outcomes.

Lots more – thanks to Steve!

Jul
21

Innovation in work comp – part 2

Posted by Joe Paduda on Friday, July 21st, 2017 | Comments

Yes, there is some “innovation” in workers’ comp – but none that’s “disruptive.”

Not yet.

and it’s because too many of us are like the hitter below.

After yesterday’s post, I received a slew of emails from folks detailing their innovative approaches/systems/applications, some of which are noted below. I much appreciate this.

That said, I would suggest that while to the folks involved their efforts may seem innovative, that innovation is limited to a pretty narrow segment of the work comp world. What is missing is disruptive innovation – game changing, real disruption.

Think smartphones – they’ve totally changed how we communicate, drive, get information, use telecommunications.

Here is an example of what I see as truly significant innovation.  Next week I’ll be digging into a couple more.

Tele…

Make no mistake, the combination of broadband, smartphones, and new programming languages will disrupt how healthcare is delivered, managed, and reimbursed. For workers’ comp, this goes well beyond telemedicine – doctor visits enabled by the internet. Here are just a few ways “telepresence” will be used in workers’ comp,,,

  • Tele-triage, with the triage nurse interviewing the patient, observing the accident site, and using professional judgment enhanced by artificial intelligence to recommend next steps
  • Follow-up doctor visits delivered via telemedicine, enabling script re-fills, monitoring of functionality improvement, and eliminating travel and out-of-work time and expense
  • “Tele-presence” case management – think a hybrid between telephonic and field, without the windshield time but with the real nurse-to-patient-to-provider-to-employer face-to-face interaction.

And all interactions are recorded, stored, indexed, and available to all parties instantly. Adjusters get notified instantly of potential issues, don’t have to wait for email downloads, or wonder if an “office visit” happened, or try to figure out on their own if the patient is “compliant”.

Think about this – workers’ comp is a declining industry – injury rates have dropped about 60% over the last 25 years – and will continue to drop. Whether you’re a bill review company, case management firm, occupational medicine provider, or TPA, you’re going to be fighting over a slice of a smaller and smaller pie.

A provider network can get into the care delivery business, gaining top line revenue by actually providing “office visits.”

A case management firm can deliver more value and gain revenue – with higher margins, across a broader spectrum of services. Directing patients to specific (affiliated or contracted) providers, documenting same, and actually providing that initial physician’s evaluation via telemedicine. More revenue, stronger ties to customers, and better margins.

A peer review firm can do face-to-face meetings between the peer reviewer and treating physician/patient/provider, gaining a better understanding of the issue, while documenting same for the claims handler’s use.

A catastrophic case can be routed to a physician expert in the diagnosis, who can provide insight into optimal treatment plans, evaluate the medical condition, and assist the local provider to ensure the right care is provided – immediately.

What’s standing in the way of widespread use of tele- in workers’ comp is what we talked about yesterday – our culture.

Fear of innovation; obsessive focus on “proof” something works before implementing it widely; complacency; deep-rooted comfort with the status-quo, all are why work comp is adopting tele- much more slowly than group health.

What does this mean for you?

If you never take the bat off your shoulder, you may earn a walk – but you’ll never get a hit and you will strike out a lot.

 

Jul
14

It’s not just opioids.

Posted by Joe Paduda on Friday, July 14th, 2017 | Comments

Yes, opioids are the biggest problem in workers’ compensation.  Not just work comp medical, but in the entire work comp industry.

Opioids kill patients, prolong and intensify disability, ruin families, run up huge costs, and lead to myriad other problems. But opioids are far from the only problematic drug class in our tiny little world

No, we have gabapentin, Soma, and anxiolytics. But today we’re going to focus on anti-psychotics – yet another mis-used medication that is causing harm to work comp patients.  

Reportedly some prescribers are writing scripts for these drugs as an alternative to opioids or other pain medications; they aren’t required to check PDMP databases or otherwise deal with opioid-related issues when prescribing anti-psychotics. This lower “hassle-factor” may drive increased use of these medications as opioid-related prescribing legislation becomes more common in more states.

As with opioids, a big issue is the side effects…in this case, tardive dyskinesia.

  From wikipedia:

TD is a disorder that results in involuntary, repetitive body movements.vThis may include grimacing, sticking out the tongue, or smacking of the lips. Additionally there may be rapid jerking movements or slow writhing movements.[1] In about 20% of people decreased functioning results.

Tardive dyskinesia occurs in some people as a result of long-term use of neuroleptic medications (antipsychotics, metoclopramide).[1][2] These medications are usually used for mental illness…older neuroleptics [drugs]…are associated with high risk for tardive dyskinesia. (emphasis added)

The photos above are the least disturbing I could quickly locate; suffice it to say that TD is pretty horrible.  One of TD’s causes is long-term usage of antipsychotics – which, believe it or not, are becoming more prevalent in workers compensation.  A close friend who runs the pharmacy program for a top ten insurer told me prescriptions for these drugs are becoming increasingly common – and he’s now seeing scripts for drugs to treat their chief side effect – TD.

The good news is there’s now treatment for TD.  The bad news is the cost – between $125 and $150 a DAY for Ingrezza – that’s $60,000 annually. Forever.

What does this mean for you?

unintended consequences can be horrific. 

Jul
11

Work comp’s drug problem

Posted by Joe Paduda on Tuesday, July 11th, 2017 | Comments

Is getting a lot better, a lot faster than the rest of the world’s.

thanks to you.

I’m in the midst of conducting the 14th Annual Survey of Prescription Drug Management in Workers’ Comp, a project I began way back when no one had heard of physician dispensing, and before opioids became a national disaster. (prior surveys can be downloaded at no cost here)

Physician dispensing in comp is slowly being solved – today WCRI released a comprehensive look at the issue which is well worth your time. (members get it for free, non-members pay a modest cost)

And we’ve made good progress on the opioid front, something few other payers can assert.  Overall, I’d hazard a guess that opioid spend – as a percentage of total drug spend – declined somewhat last year; we’ll know for sure in a couple of weeks.

The latest, albeit anecdotal takeaways from a dozen surveys I’ve done so far, indicates:

  • opioid spend continues to drop with some payers reporting double-digit percentage decreases
  • much of this comes from curtailing initial and secondary scripts
  • there’s a lot still to be done to address chronic users
  • payers are using a whole array of techniques, clinical resources, and tools to address opioid overuse, with many relying on PBMs for analytics, pharmacists, and physicians for peer-to-peer discussions
  • some payers expressed concern over the various overdose-prevention medications

Do NOT take this to mean we’ve won, that we’ve solved the opioid disaster, that we can take the rest of the summer off.

Far from it.

We’ve done the easy stuff, now comes the really knotty, tough problem of helping individual patients who’ve been prescribed way too many pills for far too long get their lives and health back.

What does this mean for you?

Thanks to all of you, who, through your work in the trenches, in policy, with individual patients and physicians and pharmacies, have made things better.  You have saved countless lives and countless families.

 

 

Jul
10

Medicaid’s really important – even/especially to you.

Posted by Joe Paduda on Monday, July 10th, 2017 | Comments

Welcome back to MCM; I took a few days off posting to hit the campaign trail, where I heard a LOT of concern about possible changes to Medicaid.
Most of us probably don’t think much about Medicaid. Here’s why we should.
First, Medicaid covers the poor elderly, those who are totally disabled, and depending on the state, poor kids and families.
Second, many are really sick people or frail elderly with no other way to get healthcare.

 

Medicaid reimbursement is generally low compared to private insurance or Medicare, but that doesn’t mean access is severely limited. In fact, (about 70% of physicians do accept new Medicaid patients versus about 85% who accept new privately insured and Medicare patients) (ESI is employer insurance)