With the appointment of Danielle Lisenby as CEO, Broadspire’s board affirmed the TPA’s focus on medical management, and served notice that the company will compete based on that focus.
Lisenby’s replacement as Broadspire SVP medical management is Erica Fichter, who has been with the company in various roles in and around medical management for years. Fichter’s reputation is one of a steady, seasoned professional with long experience in the industry.
With the re-emergence of medical cost as a primary driver of workers comp losses, the focus makes eminent sense. However, some “traditionalists” may view that focus as misplaced.
They’d be mistaken.
Managing medical is a whole lot more complicated than it was even a decade ago. Selecting and employing evidence-based clinical guidelines, meshing those guidelines with state rules and regulations, coordinating utilization review with bill review, knowing when and where to employ physician advisers, understanding the role of networks, and how and why they can be cost drivers (not cost reducers), employing speciality vendors who know dealing with PT requires a much different approach than managing facility expenses, these all require a level of sophistication and deep knowledge of medical trends that few pure claims execs or underwriters have.
When one adds to this the understanding that “medical drives indemnity”, it becomes obvious why medical management expertise is critically important.
For far too long, medical management has been an afterthought, a revenue generator, necessary evil, vendor-delivered function designed on the fly, poorly coordinated and haphazardly managed.
What does this mean for you?
Time to re-evaluate with an objective eye.

You’ve probably heard about this – an individual – traveling on employer business – was injured while having intercourse, filed a work comp claim, and will receive benefits.
I kid you not.
Now gifts like these show up in a blogger’s inbox rarely – if ever. Like all precious gifts, one has to be very, very careful handling them, lest the gift is squandered, crushed by heavy handling or allowed to slip thru one’s fingers. So, I’ll try to preserve this gift, giving it the care it so richly deserves…
So, you’re in the throes of passion, when the light fixture over the hotel bed comes crashing down, smacking you in the face hard enough to cause some significant injuries. Rather than allow this to kill the mood, you rejoice, knowing you’ll be able to stick your employer with the bill for this unfortunate event.
This actually happened, and no, it wasn’t in California…it was in Australia.
(and no, no Secret Service agents were involved…)
According to press reports, the unidentified woman (a human relations (!) worker) was traveling on business, called a gentleman friend, went out to dinner, came back, and one thing led to another. Well, rather than me trying to explain, let’s go right to the source (which in this case is a man referred to by the victim as an “acquaintance” she’d met a few weeks previously:
“the man said they were “going hard” and he did not know if they bumped the light or if it “just fell off”.
“I think she was on her back when it happened, but I was not paying attention because we were rolling around.”
Wait, did he just say he wasn’t paying attention? Was the telly on too?
This description came to light (pun intended) in testimony before one of several judges who’ve been involved in the case. After the initial judge ruled that the “victim’s” injuries were not compensable, the appellate judge demurred, determining
“If the applicant had been injured while playing a game of cards in her motel room she would have been entitled to compensation, even though it could not be said that her employer induced or encouraged her to engaged in such an activity,” he said.
“In the absence of any misconduct or an intentionally self-inflicted injury, the fact that the applicant was engaged in sexual activity rather than some other lawful recreational activity does not lead to any different result.”
With all due respect, one could argue that yanking a fixture off a wall while in the throes of passion is indeed a “self-inflicted injury”, especially if it results in injuries to the nose, mouth, and teeth, as well as a psychiatric injury, specifically an “adjustment disorder”. (Uh, what adjustment was disordered?)
We may well find out; the work comp folks have 28 days to appeal the ruling.
We’ll keep you posted.

Anthem workers comp bill review, UR, and case management businesses will be/has been sold to ISG, owner of Stratacare and Bunch. The deal has been in the works for some time, with customer discussions occurring over the last couple weeks. Don’t know the details; Anthem did provide the following comment in response to my inquiry:
“”I want to let you know that Anthem Workers’ Compensation is currently working on a number of projects that will best meet the needs of our clients. As soon as we are in a position to provide a detailed response to your question, we will reach out to you first to let you know.”
The fallout from this will affect Xerox/CompIQ; they provide the platform for Anthem’s bill review and I’d expect StrataWare to supplant CompIQ’s technology when contractual and transition issues are worked out. This is a good move for ISG, as it adds bill volume to their bill review platform, cements a relationship with a very solid network partner, and takes share from a competitor. As ISG owns StrataWare, they will see an immediate (or rather as-soon-as-they-move-to-StrataWare) bump up in operating margin as they don’t have to ‘pay’ for access to a bill review system.
It’s also notable that Anthem decided to exit businesses that have operating margins considerably more modest than those enjoyed by networks. Case management and bill review operations generate 15% – 30% margins; well-run networks should more than double those levels as variable costs are so low. The big healthplan company has been looking to expand its workers comp business into additional jurisdictions; this will generate capital that could be used to help pay for that expansion in addition to reducing the number of issues management has to pay attention to.
I did contact Xerox/CompIQ and ISG earlier but did not hear back.
Details to come as they’re made available.

The single biggest crisis facing workers comp is NOT the market cycle, employment, rate adequacy, or regulatory changes.
It is opioids. As Gary Franklin MD, Washington state fund’s Medical Director says, this is a “hair on fire” issue.
I’m not talking about the $1.4 billion employers spend on these drugs, nor am I referring to the other medical costs incurred by claimants on opioids or the dollars wasted on diverted drugs or the hundreds of claimants dead from opioids prescribed for their injury; not even the disastrous personal impact on claimants and their families.
It’s what opioids do to disability duration – that’s what’s going to drive up rates, kill off carriers, and jack up employer’s premiums.
Claimants on opioids are NOT going back to work; not to their original job, a new job, any job. They can’t drive, operate machinery, think clearly, function physically. Most employers can’t or won’t re-employ opioid-taking claimants out of concern for their safety and additional liability. Can’t blame them either.
The issue is this – the industry has not accounted for the financial impact of the explosive growth in opioid usage among long-term lost time claimants. Sure, a couple of big insurers have figured this out and are moving very fast (and very quietly) to assess the risk and try to mitigate the impact, but the vast majority of carriers, employers, reinsurers, actuaries, and regulators have yet to catch on.
While some are beginning to implement programs in an attempt to reduce the initial use of opioids for injuries, that’s closing the proverbial barn door after the herd is long gone. These programs are often pretty ineffective as well; even if the medical director/case manager/guidelines recommend against approving opioids, adjusters usually approve them anyway. That’s not really the adjuster’s fault; they just don’t have the experience/education/training/support to make the right call.
The real killer is the claim backlog, those old-dog, legacy claims where the claimant has been on OxyContin, Fentora, Actiq, hydrocodone and god knows what else for five years, where the doses have been escalating, there’s been no drug testing for compliance, and the treating doc has no long term plan other than ‘more’.
What does this mean for you?
If you aren’t already deep into a financial analysis of the real impact of opioids on claim closure, disability duration, indemnity and medical expense, start immediately. Not this afternoon, not tomorrow, not after next month’s planning call.
Now.
And don’t settle for platitudes, for “not to worry we’ve got that figured out” statements. Demand projections based on actual experience backed up by real data. And be prepared for some very, very bad news.
But better to get that news now then a couple years down the road from your favorite rating agency. While they haven’t figured this out yet, you can be sure they will.

Texas will be publishing ‘report cards’ for physicians treating workers comp patients, but won’t include opioid prescribing patterns as a criterion. That’s unfortunate – at best.
According to a piece by Bill Kidd in WorkCompCentral, the DWC – not the group tasked with developing criteria – made the decision to exclude opioid prescribing patterns, which will include data on timeliness and completeness of filing paperwork (really…), release to return to work, and use of MRIs for low back claims. This despite the ‘bi-partisan’ backing of the metric by theTexas Medical Association and the Insurance Council of Texas. (I really don’t like the term ‘report cards’ as it is viewed by many providers as pejorative and somewhat insulting, thus the information can, and often is, given short shrift by providers who hate the term.)
The good news is DWC will consider adding opioid prescribing patterns in 2015 and has already decided to include the criterion in the “medical quality review audit plan’. [opens pdf] However, the group working on the report cards had been actively discussing including assessing opioid prescribing two months after the date of injury and surgery; that discussion is now moot. Including opioids in the report cards would have sent a clear message to providers, one that is long overdue and critically important.
This is unfortunate. WCRI data indicates the Lone Star State is well above the median in almost all opioid utilization categories: volume of narcotics prescribed; number of narcotic scripts per claim; number of pills per script;percentage of claimants prescribed narcotics. Despite the lower potency of narcotics prescribed in Texas, the greater volume of claimants prescribed these drugs, longer duration of care, higher volume of scripts and pills per scripts combined to give Texas claimants more morphine equivalents than the median WCRI state.
Hydrocodone usage alone in Texas has gone up 350% over the last ten years while the death count from other opioids increased over 400%.
Inclusion of the metric would certainly help payers and claimants avoid the worst of the worst; for example, an Oklahoma physician was just indicted for the deaths of five patients after they died of prescription drug overdoses.
There’s very little credible evidence that long term (more than six months) opioid use is appropriate treatment for work comp injuries. These are drugs primarily developed – and approved by the FDA for – treating end-stage cancer pain. Not much cancer in work comp.
There’s ample evidence that long term opioid use leads to longer claim duration, long term disability, higher costs and much more medical expense. And that’s on top of the damage it does to relationships, families, and society.
What does this mean for you?
By not adding opioid prescribing patterns to the assessment of physicians, DWC is missing a chance to shine more light on what may well be the biggest problem in workers comp today.

Two top positions in the work comp industry will be occupied by new people this spring. Ken Martino, long-time CEO of TPA Broadspire is resigning to take a new position in his home state of Connecticut, and CorVel CEO Dan Starck is departing the company to assume the role of CEO of Apria Healthcare. Starck’s new job, announced earlier this month, takes effect mid-April.
No public announcement from CorVel on succession plans, and no information on their website either. Notably they did file an 8-K with the SEC noting that former CEO Gordon Clemons Sr will be assuming the role. (that notice is not on CorVel’s website as of today). That’s a bit unusual as CorVel is a publicly traded company and one would expect they’d let the market and investors know that a) the CEO is out and b) who’s taking over long-term, or at least that they’re working on it. I did email Clemons to get his comments, as usual he’s been non-responsive.
Martino’s been a very effective leader for Broadspire, navigating the TPA through a very difficult market. After a tough 2010, they’ve had notable sales growth over the last few quarters, landing several large self-insured employers. Martino repositioned Broadspire as a TPA focused on medical management; they broke away from the usual “national contract with Coventry plus a few other networks” model to identify, contract with, and build connections to a multitude of networks; their pharmacy program is solid and internally managed, and they’ve developed medical management applications inhouse as well.
This continues with Danielle Lisenbey’s appointment as Martino’s successor; her years of experience in medical management is a clear indication that Broadspire sees leadership in this key area as critical to the company’s continued growth. She may well be the only TPA CEO with a degree in industrial engineering; this has served her well as Broadspire has re-engineered the medical management and claims processes.
CorVel, the work comp managed care services and TPA company, is likely searching for a more permanent successor to Starck; Clemons is probably not in the seat for the long-term. Gordon junior may be on the list, but the delay in announcing a new boss may indicate an intention to look outside for more experience, particularly in leading a publicly-traded company.
Starck et al have been able to keep the company’s P/E ratio right around 20 for quite some time; this may prove a challenge for his successor, as their most recent report indicates CorVel earnings tumbled in the last quarter. The company’s gross margin declined by 410 basis points while operating margin (down by 320 basis points) and net margin (180 basis points decrease) also worsened.
While the somewhat-hardening comp market may help CorVel’s TPA business, the company’s recent loss of a significant managed care services account has yet to be fully felt on the books.