Category: Workers Comp

Aug
5

Jobs…but…

Posted by Joe Paduda on Friday, August 5th, 2022 | Comments

Over half a million jobs were filled in July, far exceeding expectations.

We have now recovered every job lost during the pandemic – a darn impressive record given inflation, higher interest rates – the unemployment rate now matches its 50 year low. 

Things are looking pretty good, although people remain  concerned about inflation. The good news there is fuel prices have dropped appreciably over the last few weeks, with gas prices falling 50 days in a row.

The result is a very mixed economic picture, although things seem to be trending in a positive direction on the inflation front.

What does this mean for you?

More jobs -> more payroll.

Aug
1

Just the facts, ma’am…

Posted by Joe Paduda on Monday, August 1st, 2022 | Comments

Today we’re doing a very quick recap of stuff we learned over the last couple of weeks…no opinion here (yeah that was really hard for me…)

Extra credit for identifying the man in the picture…

But first, for those of us perennially mad at ourselves because, well, we screw up and aren’t perfect, read this. Short take – perfectionism…

“…makes for a thin life, lived for what it isn’t rather than what it is. If you’re forever trying to make your life what you want it to be, you’re not really living the life you have.”

Drug prices

Make for great politics…even when all the caterwauling is wrong. The issue is what we – the consumer – pay is NOT what insurers, PBMs, and other payers pay.

That’s due to the “gross-to-net bubble”, a term popularized by the estimable Adam Fein Ph.D.

When rebates and discounts were factored in, brand-name drug prices declined—or grew slowly—in 2021.

So…you getting those rebate checks?

COVID’s origins

Remember the theory that COVID came from a Chinese lab? It is looking increasingly sketchy.

A comprehensive, detailed, and multi-factor analysis by scientists from four continents found

the emergence of SARS-CoV-2 occurred via the live wildlife trade in China, and show that the Huanan market was the epicenter of the COVID-19 pandemic.

The peer-reviewed research published in the journal Science covered molecular epidemiology and spatial and environmental analyses.

Investors and physician practices

Private equity investment in physician practices varies a lot by specialty and region. Quick takes…

  • about 5% of physicians were in private equity-acquired practices
  • The highest percentage was in D.C. (18.2%)
  • More than one in ten docs in AZ, CT, FL, MD, and FL were in PE-acquired practices

The researchers wrote…

“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration may be associated with reduced physician competition, which could lead to increased prices, [emphasis added]

An interactive map and the research report are here.

Gun violence

Gun makers earned over 1 Billion (with a B) dollars from sales of military-style assault weapons over the last decade. A report to Congress found:

  • gun makers marketed to young men by claiming their weapons will put them “at the top of the testosterone food chain”…
  • the weapons were described as an “apex predator”
  • some ads for these weapons “mimic first-person shooter video games popular with children.”

source here

The AR-15 is the most common of these weapons…the NRA named it “American’s Rifle” back in 2016. (and here I always thought it was Davy Crockett’s flintlock rifle…)

(disclosure – I hunt and have several rifles – none are semi-auto like the AR-15)

Workers’ comp physician fee schedules

…are all over the place…Louise Esola at Business Insurance reported on a recent WCRI analysis that found:

About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state…

The study – authored by Olesya Fomenko and Te-Chun Liu and up to date as of this spring – is here. (sorry for misspelling of Dr Fomenko’s  name in  earlier version…darn spellcheck!)

Clearly politics trumps policy…unless someone can tell us why it makes sense for Florida to pay docs below Medicare, while paying hospitals many times Medicare… I’ll stick to politics, campaign contributions, lazy legislators and hand-cuffed or ineffective regulators as the main driver of work comp fee schedules. (oops opinion inserted into post…just can’t stop myself)

Happy August!

Jul
25

A creative way to generate work comp PBM revenue.

Posted by Joe Paduda on Monday, July 25th, 2022 | Comments

The work comp Pharmacy Benefit Management business has become hyper-competitive; total drug spend has dropped 6 of the last 7 years, there’s been massive consolidation of PBMs, margins are declining…all signs of a very mature industry.

Sounds like a not-very-attractive-business…right?

Well, due to accounting rules, PBMs are still wildly popular among work comp service companies.

They love PBMs because the companies get to count the cost of the drugs as well as their margins as top-line revenues – which makes those service companies look bigger than they really are.

The problem is…once you buy a PBM, you get a big one-time increase in revenue. But – and it’s a BIG but, unless you figure out how to grow that PBM revenue in a business that is declining, your top line flat-lines.

If you’re looking to sell your work comp service company, or otherwise tout strong financial performance, that is not a good look. Which brings me to a creative way a PBM is generating script volume without adding new payer customers.

Occ med clinic giant Concentra’s providers are writing scripts that direct the pharmacy filling the script to send it to Mitchell Pharmacy Solutions for administration.  (I looked for a company link, but couldn’t locate any mention of Concentra’s OccuScript program on their website)

According to Concentra, the OccuScript program:

  • has been in place for quite some time;
  • is mostly – but by no means exclusively – used in states where physician dispensing is not allowed (e.g. Texas);
  • appears to primarily address initial prescription fills which are mostly generics prescribed for a limited time;
  • about one of every nine scripts written in the company’s 520 clinics and 120 onsite centers flows through the program. Mitchell is the current administrator, providing network access and the claim adjudication platform. To be clear, Mitchell does not use its own pharmacy network…they contract with Script Care.

Injured workers treated at this clinic may be – or more likely are not – covered by a payer that contracts with Mitchell. (Mitchell is one of several work comp PBMs  – and far from the largest.) If it’s a Mitchell-contracted payer this form/process is helpful indeed.

In an email conversation with Concentra, the company noted “OccuScript supports medication compliance which is fundamental to evidence-based care delivery and positive patient outcomes.”  (note Concentra stated in an email “We have national employer customers whose injured workers are never processed through the OccuScript program…(some payers instruct Concentra on how to process scripts for their injured workers.))

Medication compliance is important indeed, but there are several potential issues/concerns/problems if the injured worker is NOT covered by a Mitchell-contracted payer.

  1. The payer gets a bill from a non-contracted billing entity which adds a lot of work for claims adjusters who have to figure out what to do with it.
  2. Unlike scripts processed by the PBM contracted by the injured worker’s employer/insurer/TPA, the payer finds out about the script AFTER it is dispensed. The drug(s) actually dispensed may – or may not – be:
    1. duplicates of other scripts,
    2. contra-indicated due to other drugs prescribed for the injured worker (while prescribers are supposed to ask about other meds, many patients aren’t able to recall drugs they are taking), and/or
    3. an expensive version of the prescribed drug (there are literally dozens of companies making ibuprofen, many at different prices for the same pill; contracted PBMs control for this with MAC lists.)
  3. The injured worker’s payer/employer/insurer is usually billed at a rate that is higher than their contracted PBM price – sometimes MUCH higher…driving up the employer’s/insurer’s/taxpayer’s work comp costs.
  4. Concentra’s OccuScript contracts with Mitchell who in turn contracts with Script Care…
    1. all of whom have to get paid,
    2. and adding communication challenges as issues have to pass through several entities.

So what to do?

Concentra avers it is ready and willing to work with payers and employers to route scripts to their PBM. It is also interested in working with PBMs. Sure, most “first fills” are “one and done”…but many are not. Getting on the claim as quickly as possible is an industry-wide best practice.

Note – Concentra execs were quite responsive to my queries about the program; kudos to CEO Keith Newton and Charles Bavier – who runs Concentra’s OccuScript program – for jumping on this.

What does this mean for you?

If you aren’t a Mitchell Pharmacy Solutions customer, get with Concentra ASAP to get those scripts routed to your PBM.

For those unfamiliar with this space…Insurers and TPAs hire Pharmacy Benefit Managers (PBMs) to ensure injured workers get the medications they need to recover and return to work. PBMs contract with pharmacies, operate call centers and employ pharmacists – all in an effort to deliver the right drug at the lowest possible price.

Jul
21

California’s Med-Legal Mess

Posted by Joe Paduda on Thursday, July 21st, 2022 | Comments

In the esoteric world of workers’ comp, California’s “med-legal” issues rank near the top of issues bound to frustrate/infuriate.

Med-legal (analogous to physician review or independent medical exam) may have even moved up a notch or two, as expenses have zoomed after a change in the med-legal fee schedule that went into effect in April of 2021.

The change was intended to:

  • simplify the payment structure by replacing several variations with one flat-fee
  • increase the number of QMEs – Qualified Medical Examiners
  • and increase the number of oncologists and toxicologists,
  • reduce overuse of “supplemental” reports
  • do this all without more than a 25% increase in aggregate med-legal fees.

CWCI’s research indicated that results appear to be far less than intended…

  • the number of QMEs increased slightly – up 134 – with most ortho surgeons – NOT oncologists and toxicologists
  • there was no decrease in supplemental report services (e.g. billing for more pages reviewed)
  • and the average paid per month for comprehensive evaluations went up more than 50%.

Thanks to CWCI for sharing the details…need more details?

Sign up for CWCI’s webinar on Wednesday, July 27 at 10 a.m. (Pacific). Senior Research Associate Stacy Jones, who authored the study, and CWCI General Counsel Sara Widener-Brightwell, will review those changes and discuss the results of the study.  The program will be followed by a live Q&A session.

What does this mean for you?

As if we needed it, another entry in the Hall of Unintended Consequences tells us – YET AGAIN – regs have to be carefully thought through, responses anticipated and planned for, profiteer strategies gamed out, and then – AND ONLY THEN – finalized.

Jul
19

Healthcare costs are…

Posted by Joe Paduda on Tuesday, July 19th, 2022 | Comments

heading up.

First, a bit of background.

Big health insurers that sell insurance via the Exchanges have to file their rates with the Feds now. While they don’t insure a lot of people, their filings are detailed, public, and cover 13 states – Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Texas, Vermont, and Washington DC.

The fine folks at the Kaiser Family Foundation did a lot of analysis, here are the key takeaways.

  • many insurers are projecting a medical cost trend of 4-8%.
  • “A substantial share of the increase in premiums is from rising health prices and utilization of health care”
  • one insurer said “Medical Care Services CPI in March 2020 (pre-pandemic) was 5.5% and as of March 2022 is 2.9%. This data suggests a correction is imminent as labor and supply cost increases directly impact hospitals and physician offices.” [emphasis added]

Oh, and that COVID thing? “many insurers are projecting the pandemic will have a net neutral or only slight impact on health costs and premiums.”

So…what does this all mean?

My view.

  • for this year, increased utilization and prices will drive trend north of 5%
  • we’ll see a bump in Q3/Q4 as increased labor costs work their way thru the system
  • 2023 trend will likely settle around 5% as inflation in other sectors eases off.

The wild card is – brace yourself – politics.

Sen Manchin – the mercurial-I-can’t-make-up-my-mind-and-it-sure-is-fun-being-the-center-of-attention Senator from West Virginia will determine if 13 million Americans can no longer afford health insurance.

If legislation doesn’t pass, health systems will have to care for more people without health insurance; some systems and hospitals will raise prices to cover their losses.

What does this mean for you?

Higher healthcare costs for the privately insured, workers’ comp insurers, employers, and taxpayers.

Jun
17

Things work comp can/should learn

Posted by Joe Paduda on Friday, June 17th, 2022 | Comments

In addition to my focus on work comp medical management I’m deeply involved in governmental programs (Medicare/Medicaid/dual eligibles) and related businesses.

Here’s a few things work comp would do well to understand/explore/pursue.

  1. Auto-adjudication of medical bills – the standard target for auto-adjudication of medical bills is 90%.  That’s far higher than any workers’ comp bill process, and about twice as high as the average.
  2. Medical bill turn-around time (TAT) – average is at or below 20 days from receipt of complete “claim” (defined as a medical bill and needed documentation)
  3. Administrative expense ratio – <10%. yes, I understand work comp is a lot more litigious, blah blah blah. But seriously – 28-35%??
  4. Value-based care – is taking over the big governmental programs and corporate plans as well. Yes there have been a ton of misjudgments, errors, problems and failures, but make no mistake – in the near future VBC will be the dominant form of contracting and basis for reimbursement. (those who declare VBC isn’t going to happen in work comp may want to look outside their bubble)
  5. The impact of provider consolidation – this is one area where recent articles/briefs/research are starting to scratch the surface – but only just. Reality is consolidated markets are much more expensive and WC payers have way less ability to “manage” care in those markets. WC needs to get a whole lot smarter and more agile.

Whether this actually happens is up in the air. We veterans with decades in this business recall all too well what happens to claim counts/claimdurations when recessions hit.

What does this mean for you?

This is rarely helpful.

Jun
14

It’s getting real, real fast

Posted by Joe Paduda on Tuesday, June 14th, 2022 | Comments

The impact of global warming on climate change is happening faster than anyone thought.

And that will lead to more occupational injuries and illnesses.

Today’s early heat wave is smothering much of the country in brutally hot and oppressively humid conditions; as the heat and humidity shifts west and north, the southwest is getting a bit of a reprieve while the eastern US is blanketed with heat warnings.

It’s not just the heat – it is the unexpected/unprecedented storms, droughts, high winds, and resultant floods and fires that are becoming all too common.

credit CNN

Yellowstone is closed, and some roads are impassable  – and will remain impassable for some time due to flood damage. The Yellowstone River reached an all-time high Monday – more than 2 feet higher than the previous record. This in an area that’s been parched in a drought.

flood damage in Gardiner Montana, credit CNN

Hundreds of thousands of Ohioans and West Virginians are without power.

Winds gusting north of 80 mph hit Chicago yesterday – exceeded by a 98 mph guest in Fort Wayne Indiana.

Six months ago I wrote this:

the biggest long-term concern for workers’ comp is global warming...yet this is getting zero attention.

There’s going to be an inevitable increase in issues related to heat, flooding, fires, drought, tornados and hurricanes. This is getting more real every day yet remains all-but-ignored by pundits, policy-makers  and rate-makers.  We can expect more heat-related claims. Hurricanes, fires, and tornados will increase in number and severity; affecting logistics, labor, construction, and claims. The research is clear.

It didn’t have to be this way, but thanks to big oil and its ability to manipulate people and pay off politicians, we failed to take action.

And let’s not forget people were willing to be manipulated.

Now, we are paying the piper. More specifically, workers in public safety, manufacturing, healthcare, construction, logistics, agriculture, forestry, mining, transportation and other sectors will be the ones suffering from the lack of foresight and inability/unwillingness to believe science exhibited by far too many of us.

As of last summer, only three states had adopted standards for workplace heat exposure – kudos to California, Minnesota and Washington. The Feds have yet to set federal requirements.

Jeff Rush of California Joint Powers Insurance Authority and I will be discussing the impact of global warming on workers’ comp at National Comp 2022; thanks to Michelle Kerr and her colleagues for inviting us to speak.

What does this mean for you?

  1. Denying the reality of human-caused climate change will have devastating effects on all of us – with worse consequences for our kids and grandkids.
  2. States and the Feds will enact heat/humidity exposure standards, which will drive big changes in risk management.

 

Jun
7

Those damn facility fees

Posted by Joe Paduda on Tuesday, June 7th, 2022 | Comments

If you are a work comp payer, you don’t have to pay those ridiculous facility fees when care is delivered outside the hospital – at least not in Pennsylvania.

That’s the decision rendered by the Pennsylvania Bureau of Workers’ Compensation in a case dating back to 2017. The case arose when a hospital (which I promised not to identify) tried to get reimbursed for care delivered by an affiliated provider, which was NOT “located within XXX hospital”.

The details

The hospital, a “Part A provider and billing entity” didn’t provide the billed services, rather a

“part B provider whose clinic [was] not located with[in] XXX hospital performed, billed, and was reimbursed for services.  XXX hospital is not entitled to payment as XXX hospital provided no medical services…”

The actual provider – a “part B provider” affiliate of XXX hospital, delivered the services, submitted a bill and supporting documentation, and was reimbursed.

The hospital also submitted a bill along with documentation that the treating provider had a professional services agreement (PSA) in place with the hospital.

Notably, the PSA “designates that all care and treatment is rendered by [the affiliate’s] personnel, therefore the payer’s attorney questioned exactly what XXX hospital was “providing.”

There’s a LOT more to this; location codes, provider details, Medicare regulations, bill types and the like are all important. The knowledge level required to correctly reimburse and successfully uphold a denial of payment for facility fees in PA is quite impressive; the entity providing that expertise has a wealth of experience and expertise in the Keystone State.

The cost reduction is equally impressive .

What does this mean for you?

  1. If you are paying facility fees for care delivered outside of a hospital (Part A) provider, you better get your act together.
  2. Expertise is way more important than price or throughput.
May
27

Things I missed while despairing

Posted by Joe Paduda on Friday, May 27th, 2022 | Comments

We’ll get to what we missed in a second; first this – The slaughter in Buffalo and Uvalde had me focused elsewhere, as it did for many.

That focus must not shift as we celebrate Memorial Day with friends and family; we cannot just move on, as tempting as that is. Rather I’d encourage you to commit to doing something, to be a difference maker.

Please don’t just move on. Please.

  • Get the facts about gun violence here.
  • Support the Sandy Hook parents’ efforts here.
  • Support Moms Demand Action here.

WCRI published two excellent studies this week…thanks to Andrew Kenneally for sharing the news.

The craziness of workers’ comp extends to the prices you pay doctors and therapists for care…how crazy you say?

Bonkers.

Docs in Florida are getting screwed (but FL hospitals are rolling in dough), while their counterparts in Wisconsin are making bank. Like so many things in comp, this makes zero sense.

Download Rebecca (Rui) Yang PhD and Olesya Fomenko PhD’s insightful study – for free – here.

There’s far too little information on the outcomes of chiropractic care. WCRI just published a multi-pronged analysis of chiropractic care’s impact on low back pain, with a comparison of costs and disability duration for patients treated by chiros vs other care givers.

An intro video is here.

The study, authored by Kathryn Mueller, Dongchun Wang, Randall Lea, M.D., and Donald R. Murphy is available for purchase here.

Have a safe weekend, and remember – Democracy depends on your involvement.

May
19

The invasion of the techies

Posted by Joe Paduda on Thursday, May 19th, 2022 | Comments

Artificial intelligence.  Block chain.  Wearables. Smart phones. Chatbots. Various combinations thereof.

All these tech wonder-things are working their way into workers’ comp…or at least trying to. I’ve been tracking this sporadically (who has time to monitor all the press releases announcing this revolutionary app or that whiz-bang solution??) and have come to a few conclusions.

  1. With rare exceptions, the companies developing and offering these “solutions” are founded and run by either a) clinicians or b) techies.
  2. Those run by techies seem to think they can stitch together a wearable thingie connected to a smartphone app and voila’! they’ve built a substitute for/adjunct to physical therapy.
    Of course, the techies KNOW tech, understand AI and video tracking of movements and integration of smart-phones with remote devices. What they do NOT know is medical stuff, what really happens in rehab, the role of the therapist/prescriber/patient, the realities of the therapy process, where things break down in the patient/therapist process/interaction and why. And a lot of other stuff I can’t think of this second.
    Oh, and patient engagement.  That’s kind of super-important.
  3. Those run by clinicians really understand the care process, clinical issues, the reality that effective therapy and recovery is driven largely by patient compliance. What they don’t get are the tech challenges, the singular importance of reporting information back to other stakeholders, the limits of technology and adoption/effective/consistent use of technologically-driven “solutions”.

So, tech-centric approaches rarely address patient engagement, compliance, or the obstacles thereto.

It doesn’t matter how great your tech is if people a) can’t figure out how to download it; b) don’t have a smartphone; c) can’t figure out the app/wearable/bluetooth connection/whatever; d) it isn’t specific to the needs of each individual patient (language, physical characteristics/comorbidities/functional limitations/pain levels, reading level, therapy needs and evolution of same…).

And it doesn’t matter how great your clinical expertise/knowledge/experience is if: a) the tech is clunky, b) your staff has to onboard/explain/coach/be tech support for your patients, c) the data collected isn’t automatically shared with stakeholders, and d) the data isn’t entirely secure yet accessible for reporting/analysis/research.

On that last point, no device/app/tech is helpful if other stakeholders (the therapist/prescriber/case manager/claims handler/employer) don’t get reports on progress and alerts on potential problems – especially if those reports and alerts aren’t easily accessible/pushed to them so they don’t have to go looking for them.

What does this mean for you?

Apple beat Microsoft because it made using a computer easy. Adoption of tech-enabled “solutions” requires making the entire process/use by all stakeholders “easy”.

Put more succinctly, Ideas don’t matter – execution does.