More than 10% of workers comp medical costs are for claims more than 20 years old.

And that percentage may well increase.  That’s the finding from NCCI’s latest research, courtesy of Barry Lipton, John Robertson, and Dan Corro. There are a few striking findings well worth considering:

• Diseases were the largest contributor to costs, followed by complications from medical care.
• Drugs (38%), home health, implants/orthotics/prosthetics and other supplies make up 58% of costs compared to 16% of costs for claims less than 20 years after injury.  Notably, the authors predict that drug costs for today’s injuries 20 years out may well account for more than 50% of total spend.
• About a quarter of drug costs were for opioids – drugs that are not indicated for musculoskeletal conditions.

I was chatting with Jennifer Wolf-Horesjh, Executive Director of IAIABC, this morning when the conversation turned to medical marijuana in workers comp.  I have no idea how we ended up there, but Jennifer is a great conversationalist and very well informed about everything work comp-related, so she’s on top of the issue (and pretty much everything else).

As luck would have it, IAIABC just completed a survey of states’ positions on work comp and medical marijuana.  A couple states have specifically banned the use of medical marijuana in worker’s comp treatment (Montana and Vermont), while others have administrative restrictions/requirements in place. Others allow it.  (Jennifer also told me about a recent court case wherein an insurer was required to pay for the marijuana growing equipment used by a claimant; if anyone has a record of that send it over and I’ll update the post. )

So, here’s the deal.  What logic would one use to approve the use of medical marijuana in workers’ comp?  There’s very little evidence that it is beneficial for most conditions for most people, although some anecdotal evidence that it works for a few. But just because a (very) few find relief from cannabis does not make it a viable medication – and one employers should be paying for – without careful scrutiny and ample evidence that it works for a specific claimant.

Alas, logic and workers’ comp aren’t often used in the same paragraph, so perhaps this is just another indication of how screwed up WC is.  As if we needed one.

There’s an excellent white paper on the topic from PBM myMatrixx as well as a webinar for your edification.  PMSI’s Jay Krueger has also authored a paper on the subject, and WorkCompInsider was an early reporter on the subject as well.  Oh, and in case you think you’ve heard it all, read Jon Coppelman’s piece on an idiot who a) got stoned and b) then went to feed bears in an animal park.

Claimants with comorbidities [health issues identified by the treating doc] cost a lot more than patients without.

That’s the conclusion of NCCI’s latest report, and a finding all workers’ comp stakeholders would do well to consider carefully – for several reasons.

1.  The percentage of working-age Americans with chronic conditions [e.g. asthma, hypertension, depression, diabetes, etc] is large and increasing.  According to the CDC, 27 percent of Americans are obese, 29 percent have hypertension, and 7 percent have diabetes.  All are substantially higher than a decade ago.

2.  NCCI’s analysis only included claimants where the WC treating physician coded and billed for a comorbidity.  Compared to the CDC figures, this occurred in about 10% of the patients who likely had comorbidities.

3.  The “growth rate of workers compensation claims with a comorbidity diagnosis is outpacing growth rates of the given conditions in the US population.” NCCI had a couple potential explanations for this trend; I’d suggest it is likely because many WC claimants:

a) don’t have health insurance;

b) their comorbidities are hampering their recovery from the occupational injury;

c) treating docs must address those comorbidities if there’s any chance of getting the claimant back to functionality; and

d) payers are paying for that treatment because it makes financial sense to do so.

One rather stunning finding – 81% of claims with diagnoses of obesity incurred lost time.

I’d be remiss if I didn’t note that the rollout of Obamacare will cover millions more claimants, thereby allowing work comp payers to send bills for non-occ conditions to the employee’s health insurer.  While some states continue to resist reform, there are others (e.g. Florida) that have decided to participate after all.

What does this mean for you?

Healthier workers = lower workers comp costs.

My post on Accident Fund’s ground-breaking analytical work generated a good bit of discussion, some public and much not, some appropriate and some a bit confused.

To clarify, allow me to address a few issues.

1.  As I said yesterday, Illinois has the highest medical costs in workers comp, driven in large part by the second highest fee schedule. WCRI’s CompScope report (12th Ed., ppg 10-11) provides an excellent comparison of medical costs among the study states; IL’s medical costs are – by far – the highest for both lost time and medical only claims (as defined by WCRI).

2.  I did NOT say IL’s workers comp costs were the highest – the state is fourth in that category.  Some readers evidently conflated “medical” with “workers’ comp”; medical is a component of workers comp costs, along with indemnity and administrative expense (ULAE and ALAE).

3.  There are several contributors to IL’s medical cost problem.  The highest outpatient facility costs, an easily-gamed fee schedule, no real employer direction, and high – I would suggest far too high – utilization of physical medicine at prices much higher than those in surrounding states are among the major drivers.  Internal HSA data from several large payers indicates the average number of PT visits for work comp claims in IL was above 15 in 2010; if anyone has more current data I’d love to see it.  This was substantially higher than states surrounding Illinois.

So, what’s to be done?

Well, start with identifying the best providers – defined as those who adhere to evidence-based medical guidelines and deliver the best outcomes: shortest disability duration, lowest medical and indemnity expense, sustained return to work.  Note that patient satisfaction is not automatically included.  Unfortunately some WC claimants don’t want to return to work when they’re physically ready to do so, and therefore don’t like providers who try to get them back quickly.  That’s not to say patient satisfaction should not be factored in, just that one has to be careful when doing so.  Much of what I’ve seen re patient satisfaction doesn’t adequately address this potentially-confounding issue.

Next, develop strong relationships with those selected providers – pay them fairly and quickly, don’t bother them with needless UR requirements, help them schedule ancillary services when and where necessary, and let them know you’ll be monitoring their performance on an on-going basis.

Direct injured workers to those good providers – this can be done in every state except New York. There’s an industry-wide misunderstanding of “direction”; it is legal in every state (but NY), however in some states the claimant can decide where they want to go, while in others the employer can require an injured worker go to a specific provider (or choose from among selected providers in states such as GA and PA).

Finally, monitor and measure outcomes, provide that data to providers, and continuously tweak your network.

Which leads us back to the Accident Fund’s CareAnalytics(tm) approach.  Notably, the analysis of providers did not factor in network participation or discount arrangements, rather it focused on outcomes.  As Jeff White reported in his public presentation at WCI in Orlando, desired outcomes include:

• adherence to evidence-based medical guidelines
• total claims cost
• claim duration
• medical cost
• addiction and dependency prevention

Finally, I’d echo what George Anstadt MD, former president of ACOEM, said yesterday in a comment on MCM: “glad to see insurers looking at good outcomes and recognizing that Occupational Medicine specialists are a great value, as a group, and that within that group are an experienced and ethical sub-group who save insurers even more money and get even better health outcomes for workers and their employers.”

For several years, the Accident Fund (HSA consulting client) has been making major investments in data analytics and working on ways to use their new-found knowledge to reduce costs and improve outcomes.  Now, the results of those efforts are becoming apparent.

Claims costs are coming down, driven by rapid referral of selected claims to top occ med physicians.

AF’s program identifies higher risk claims and claimants, alerts adjusters and case managers, and, when necessary seeks to move the claimant to one of the top docs.

The program, which recently won an award for innovation, is under the direction of Jeffrey Austin White, director of Medical Management Practices and Strategy for Accident Fund Holdings.  In a press release Jeff said “It’s a huge honor to receive this award and it is truly reflective of the hard work of our claims representatives, risk case managers and operating companies…This is a major accomplishment of custom software development to meet our business needs and improve efficiency while also giving us a competitive edge.”

So far, the program has helped identify high-risk claims faster, improved policyholder satisfaction, and reduced claim costs for targeted claims in excess of 20 percent.

Jeff reported on these results at several recent conferences including August’s Workers Comp Institute in Orlando.  Here are a few highlights:

• the more work comp experience a physician has, the better their outcomes are.
• the most experienced docs’ claims costs were 20% below the least experienced
• a lot of claims are handled by docs with zero experience in comp
• claims handled by occ med docs were 20% less costly than average

The net -“change of provider based on experience is an effective cost containment strategy.”

While others are talking, planning, and getting ready to get ready, Accident Fund is doing.  Kudos to Chief Claims Officer Pat Walsh, VP Claims Lisa Riddle, and Jeff White.

We’ve recently completed the First Annual Survey of Utilization Review in Workers’ Comp, and some of the results are a bit surprising.

Sponsored by CID Management, there were 118 respondents, both front line and executive staff. While there were some consistent findings, once again it is apparent there are rather more disconnects than one would expect.

• Execs are one-and-a-half times more likely than the front line to report their UM/UR system is integrated with their other medical management programs (e.g., bill review, networks, pharmacy). Interestingly, this is similar to the differences between executive and front line responses that HSA found in its most recent bill review survey; most executives thought BR was integrated with UM/UR, but most desk folks did not.
• Execs appear to be more concerned with the execution of the UM/UR guidelines/rules by the state while the folks on the front lines appear to be more concerned with the state’s poor enforcement/accountability of their guidelines.
• When asked what UR was utilized for, front line staff were more focused on controlling claim costs while management was most focused on delivering the right care at the right time.

Among those respondents using vendors for some or all of their UR work, the average vendor has been in place for five years – however most don’t see much of a barrier to switching vendors. In fact, two-thirds of both groups believe that it is neutral to very easy to make a UM/UR vendor switch. Further yet, approximately a quarter of both the FL and the EXs stated that it would be not hard or very easy to make the switch.

There’s much more detail to the Survey; we’ll be presenting results, and you can get a copy of the Survey Report, at the NWCD Conference in Las Vegas next month.  The presentation and Q&A will be held at CID’s booth; I’ll be posting the schedule next week.

That’s defined as care that does not improve patient outcomes, and it was the subject of Dr Rick Victor’s concluding remarks at the WCI conference. And the answer is, well, let’s consider the data first.
First, who cares? Not my problem, right? Consider that other research indicates the average household is working 4 weeks just to pay for the estimated total amount of dollars spent on unnecessary care.
When you put it in that perspective, it becomes very, very real. Dr Victor went on to discuss various indicators of wide variations in medical practices in comp. For example, docs inassachusetts are ten times more likely to prescribe schedule ll narcotics when prescribing narcotics than physicians in texas.
If you are prescribed narcotics in Louisiana you are four times more likely to become a long-term user of narcotics than in the lowest ranked state.
If you have a disc problem, you are almost three times more likely to get back surgery if you are in Tennessee than if you live in California.
Why?
Well, perhaps there are financial motivations at play. Victor reported their research indicates surgeons that own a surgery center do 76 more surgeries each year than non-owners.
And yes financial ownership is a driver, but owned ASCs are more efficient so they can do more, and owners were usually operating more often before they became owners.
But with all that, there are still 20% more surgeries done by docs who own ASCs when you account for these confounding factors.
Are they unnecessary? Well, Medicaid patients weren’t getting more surgeries, work comp patients were. And by the way, the same 20% increase was seen in colonoscopies.
And that’s not even getting into the huge differences in prescribing patterns exhibited by docs who begin to dispense drugs out of their own offices.
What does this mean for you?
Returning to the headline question, I’d suggest there is ample evidence that suggests there is indeed a lot of unnecessary medical care.
And every year you work until January 29 just to pay for that unnecessary care.