Insight, analysis & opinion from Joe Paduda
Ohio’s Bureau of Workers Comp (BWC) could take a lesson from the State of Washington’s own workers comp fund. While the two state funds have some similarities, their results are quite different.
How different? Read on…
Florida is one of, or perhaps the only, state to have as an official elected position a state CFO. The incumbent is supposed to oversee state spending, review state contracts and investigate insurance fraud among other functions. Florida’s CFO is also part of the four person cabinet along with the governor, attorney general, and Commission of Agriculture and Consumer Affairs.
Obviously, the CFO would have a broad and deep impact on the state’s insurance industry, the provision of same, and purchase of insurance by the state. That makes it interesting for we insurance types.
For readers interested in workers comp, news from Effect Measure to whet the appetites of litigators looking to subrogate workers comp claims.
It seems that the highest levels of the Federal government were intimately involved in publishing information about the safety, or lack thereof, of the air around the WTC in the days after 9/11. And by all accounts they got it wrong.
Liberty Mutual, among other workers comp insurers, was, and is, on the risk for many of the people affected by the clouds of noxious substances resulting from the Towers’ collapse. Perhaps they are already subpoena-ing away…
Medicare Set-Aside (MSA) vendor Health Advocates (HAI) has been sold to drug supplier Amerisource Bergen (ABC) for about four times projected 2006 revenues, or $83 million. Yes, that seems awfully pricey, but HAI is also quite profitable, with margins above 50%.
Based on an EBITDA multiple in the 5x – 6x range, the price doesn’t seem quite so outrageous.
Actiq, the lollypop pain killer, is rapidly becoming the biggest problem drug in workers comp. FDA approved only for treating cancer pain, the potent narcotic is now on most payers’ top 5 drug list (ranked by dollars spent).
There are likely several factors that have enabled a drug clearly not approved for musculo-skeletal conditions to achieve this high “honor”.
If you have yet to shower, you may well need one after reading this.
Just in time for election season, another chapter in Ohio Bureau of Workers’ Comp scandal is heading for court. The latest news comes from the Toledo Blade, which reported last week that the BWC’s CFO is alleged to have accepted bribes from brokers for investment firms eager to invest the Bureau’s funds.
The Cleveland Plain Dealer has published an article that is highly critical of Ohio’s workers comp managed care program. The analysis performed by the paper (and subsequently reported by AP and other news outlets) notes that administrative costs associated with claims management have gone up much faster than the rate of inflation,while medical costs have experienced a similar trend.
Several other papers inside and outside Ohio are also focusing on the BWC managed care program.
Continue reading Has workers comp “managed care” worked in Ohio?
The mess, and it is a real mess, that is the Ohio Bureau of Workers Compensation scandal has spread its ugly tentacles. The latest is the innuendo that the present head of the North Dakota state workers comp insurer has been unfairly linked to one of the accused felons involved in the Ohio BWC corruption. (ND is a monopolistic state, where WC insurance is only available from the state itself).
I have no personal knowledge of the ND fund situation, but find it most distressing that an individual who once had the misfortune to work with one of the sleazy officials in Ohio would be somehow tainted by that link.
Fortunately, an upcoming audit report will provide an objective review of the ND fund’s operations (link is the past report, new report is due shortly) and results. Here’s hoping that it finds nothing even close to the swamp of misdeeds and corruption that was Ohio’s BWC.
With the news that Aetna has entered into the work comp pharmacy benefit management business, there are now officially a bazillion WC PBMs doing business. Maybe even two bazillion.
Aetna has been in and out of the WC business in the past, and now appears to be in it, at least as a managed care vendor. Aetna Workers Comp Access is the brand name for the company’s PPO network, one that is gaining some traction in certain jurisdictions. The new PBM venture appears to be an attempt to use Aetna’s group health-oriented PBM to deliver drugs to comp patients. But the WC PBM business is much much different than group health. There are no deductibles or copays in comp, identifying the patient’s PBM is much more of a challenge, and the country is a crazy quilt of different regulations, as each state sets its own rules, reimbursement levels, and operating standards.
The strategy is to cross sell the PBM to Aetna’s (group health) employer clients. One of the touted benefits is the ability to identify potentially harmful drug interactions across both group health and WC medical treatment. Aetna has landed their first customer, CostCo, and are also bidding on carrier business (several of the larger insurers have been or are out to bid for PBM services).
Aetna is not doing this on their own, but has contracted with Rockville, MD based CatalystRx to provide the WC expertise needed to operate in the comp market. This is a somewhat puzzling choice; Catalyst is not a big player in WC and does not have a lot of experience in the space. Their contribution will be key if Aetna’s newest venture is to become a viable option for comp drug buyers.
What does this mean for you?
Another option in the already-crowded WC PBM industry, albeit one with a different twist.
As a public service, I’ve put together a (partial) list of firms that repackage drugs for physician dispensing. This is primarily a workers comp issue, as comp insurers and TPAs are increasingly concerned about the cost of drugs dispensed by physicians. In some circumstances, the billed and payable amount can be several times higher than the cost for the same type of drug dispensed through a pharmacy.