Category: Workers Comp

May
31

Thursday catch-up

Posted by Joe Paduda on Thursday, May 31st, 2018 | Comments

Lots going on out there – here’s what you may have missed…

Opioids…

The awful people at Purdue Pharma knew damn well their opioids were being misused, repeatedly denied it, and kept pushing their pills on doctors and patients. They lied to investigators, manipulated data, and are directly responsible for today’s opioid disaster. This from Barry Meier’s piece:

credit NYTimes

But the Feds aren’t blameless; in 2007 the US Justice Department allowed Purdue officials and the company to plead guilty to misdemeanor charges.

Think of that – misdemeanor charges for those most responsible for the opioid epidemic. Street corner drug dealers go to jail for years, and these fat cat execs with their lavish lifestyles and fancy lawyers pay a small fine.

I cannot put into words how much I hate these bastards, and how furious we all should be about a Justice Department that let them get away with it..

Breathe…

WCRI is hosting a webinar on the impact of opioids on disability duration on Thursday June 21 at 1pm eastern. Bogdan Savych PhD will address the following questions:

  • Do opioid prescriptions increase duration of temporary disability benefits?
  • Do longer-term opioid prescriptions increase duration of temporary disability benefits?
  • What role do local prescribing patterns play in determining whether injured workers received opioid prescriptions?

The study examines the effect of opioid prescriptions on the duration of temporary disability benefits among workers with work-related low back injuries using data from 28 states, for injuries between 2008 and 2013.

Register here…free for WCRI members, a nominal fee for others.

If you’re wondering why Congress isn’t doing more to attack the opioid crisis – and it isn’t doing much at all – blame the lobbyists, including those working for the AMA, the seventh highest lobbying spender in 2017, with $21.5 million spent.

The AMA is fighting 3-day opioid script limits, mandatory use of Prescription Drug Monitoring Programs, and mandatory opioid education for prescribers.

WTF??!!!

Twisting words to blame the victim

Poor people are less healthy than people who aren’t poor. That’s because their diets aren’t as good, they have poor access to care, their lives are far more stressful, substance abuse is more prevalent, and they are more often victims of crime.

These factors have long been known as “social determinants of health”, the idea that just being poor means moms, kids, dads are going to be less healthy than you and me.

The “work for Medicaid” crowd is attempting to steal the term “social determinants” by using it to claim that forcing people to work for Medicaid is good for them.

That’s just not true. In fact, forcing Medicaid recipients to go thru a maze of paperwork and administrative hurdles to prove they can’t work  – and if that recipient messes up the paperwork, fails to submit it on time, or isn’t able to accurately document their disability,

BOOM! they lose Medicaid coverage.

And they get sicker, and we end up paying for their care in the ER.

And the data shows folks who HAVE Medicaid are better able to find work! From the HealthAffairs piece:

illness and disability are among the primary reasons working-age adults are not employed and this problem is exacerbated when people lack access to the health coverage they need get care for their health problems. Enrollment in health coverage has been shown to be a significant factor in helping individuals find jobs, with over 75 percent of unemployed Medicaid enrollees in Ohio reporting that gaining access to health coverage made their job search easier.

Oh, and at least one state’s policies is blatantly racist.

There’s more, but I have to get to work.

 

May
30

King v CompPartners and the Duty of Care

Posted by Joe Paduda on Wednesday, May 30th, 2018 | Comments

To what extent are utilization reviewers care providers?

That was NOT the central question argued yesterday in the King v CompPartners case before the California Supreme Court.

The case appears straightforward; the plaintiff was prescribed Kolonopin, which was denied after going through the UR and IMR process. When he stopped taking the drug, he suffered several grand mal seizures which led to additional injury. The plaintiffs are arguing the UR physician who wrote the final denial should have authorized or otherwise recommended a gradual withdrawal, as seizures are not uncommon when patients suddenly stop taking Klonopin (Mr King had been taking it for two years).  In the view of the plaintiffs, failing to do that amounted to medical malpractice .

The central legal issue in this case is the exclusive remedy nature of workers’ comp, with the defendant arguing that he cannot be charged with malpractice as the UR determination and related processes took place within the workers’ comp system. While that’s the central issue, it’s not my focus.

Rather, I’m interested in the “duty of care” issue. I’ll leave the exclusive remedy issue to the lawyers; the health of the patient – and who is responsible for that – is what’s important to me.

There’s some pertinent case law in California that speaks to the “duty of care”, a phrase that infers the physician doing the review  is responsible  – to some degree – for the medical treatment and results thereof associated with his/her UR determination. In fact, the first court ruling verified that the UR physician owed the patient a duty of care.

The question seems to be, how broad and deep was the duty owed the patient?

The case went to appeal, and the court asserted that the UR physician did have a duty of care. From my reading, it based that assertion on the court’s view that a UR physician is implicitly acting as a medical provider.

However – and this is where it gets sticky – the duty of care varies depending on the patient’s specific situation.  

There’s a legal and an ethical issue here. First, that “standard” is pretty nebulous, ripe for disagreement and litigation.

Ethically it’s more clear. The UR entity should always consider the implications of its decision, the potential negative health consequences, as well as the narrower workers’ comp medical considerations of relatedness, appropriateness, and causation.

Because at the end of the day, it’s about doing the right thing for the patient.

Here’s where the reality that is California’s work comp screws things up; payers often base their decisions on which UR vendor to use largely on price.  UR is seen as a commodity, a necessary evil, especially in California where medical management costs account for way too much of the claims dollar.

Payers are looking to get the cheapest UR they can, while some providers and their legal/lobbying supporters scream about high administrative expenses, inferring those dollars should be spent on patients.

What does this mean for you?

What patients need is careful, thorough UR by physicians with the time and training to foresee and speak to potential consequences of their determinations. And that costs money.

Both payers and their adversaries would be well served to acknowledge that fact.

Note – I haven’t read the UR/IMR determination itself, so I don’t know if or to what degree the UR physician delved into the Klonopin withdrawal issue, nor do I know if that was discussed with the treating physician.

Rather my perspective is how these things should be handled and what the primary consideration should be.

 

 

May
23

Hartwig on the economy and workers’ comp

Posted by Joe Paduda on Wednesday, May 23rd, 2018 | Comments

Dr Bob Hartwig of the University of South Carolina gave his annual whirlwind tour of all things economic. The net – his talk was an exuberant paean to the US economy – and the impact of that economy on workers comp.

My view –

  • the data doesn’t indicate the economy has noticeably strengthened over the last year or so;
  • consumer and small business confidence levels are notoriously fickle; and
  • there are lots of warning signs out there that merit close attention; warning signs that weren’t adequately addressed in the talk.

While he briefly noted several potential issues with the economy, overall Bob painted a picture of businesses investing, consumers spending, profits abounding, and sunshine and happiness all around.

I’m not so sure.

For example, he cited as one reason for the nation’s positivity this datapoint; GDP growth was north of 3 percent for two quarters last year. Well, that’s true. However…

He chose two quarters where growth was over 3 percent – but in reality annual growth was 2.6% last year.

And 2.3 percent for the first quarter of 2018.

And last year’s 2 quarters paled in comparison to the 3.5 percent growth in 4 out of 5 quarters we saw in 2013-2014.

A 2.6 percent annual increase is solid, but by no means a boom.  Bob did cite the high consumer confidence index, small business confidence, and a variety of other factors as support for his overall very positive outlook.

While people may be “confident”, confidence is a state of mind that can change really quickly…and there are dark clouds on the horizon.

For example – wages remain low; consumer debt levels are at historic highs (26% of earnings); the Federal debt and deficit is going to soar, driving up interest rates; and there’s a real risk of trade wars.

If consumers feel strapped and stop buying, things will get ugly. Given the record levels of consumer debt, I don’t see how the buying surge can keep going unless wages increase and interest rates stay low – which isn’t happening.

Bob briefly noted the issue of wage stagnation, but did not discuss the impact of this – and the fact that this is a chronic problem for consumers and businesses. In fact, the financial gains are not going to workers, but to investors and owners…who are less likely to use their newly-gotten tax gains and profits to buy pickups and groceries and movie tickets.

He talked about job openings, specifically the 6 million job openings today – perhaps those jobs are open because employers aren’t willing to pay enough to get people who have left the workforce back in the job market.

He did address the the long-term unemployed, sort of.  Hartwig stated that the number of folks not looking for work is not going to change due to a number of factors (citing the U-6 unemployment rate, which includes those not actively looking for work – slide 17).

Got to admit this was confusing… the overall labor force participation rate, which has been pretty flat since 2014, was often cited by Obama critics as proof that the “recovery” was no recovery at all.  Now we hear that the unemployment rate – which is the inverse of the labor force participation rate – isn’t likely to change. [I emailed Dr Hartwig Monday asking for clarification; haven’t heard back yet but will update the post if I do]

Well, which one is it – will people return to the workforce or not?

Here’s a detailed discussion of labor force participation rates; note that the rate today is exactly what it was in January 2017 – 62.9%. And here’s why labor force participation is viewed as a better measure than unemployment.  Here too.

Clouds on the horizon

Hartwig did note a few potential issues…

  • the possibility of trade wars affecting employment; those industries most at risk – aircraft, electrical equipment, fabricated metals are among the top potential victims,
  • infrastructure improvements likely won’t have much of an effect.
  • the pending huge increase in the Federal debt  – Bob said that interest rates “may” have to increase.

May???

Not only will interest rates go up (for businesses and the Feds), but a much larger percentage of Federal spending will go to debt service. In fact, we can expect the Fed to increase rates this year.

What does this mean for you?

The data points cited by Dr Hartwig don’t indicate the economy has strengthened appreciably over the last 18 months. Yes, consumer and small business confidence indicators are strong, but they appear to be based not on real economic conditions but on emotion.

Emotions can change fast.

May
22

Swedlow on work comp networks…they are NOT equal

Posted by Joe Paduda on Tuesday, May 22nd, 2018 | Comments

The best was saved for last at NCCI’s Annual Issues Symposium. After Gen (ret) Colin Powell warmed up the crowd, NCCI’s Barry Lipton and CWCI’s Alex Swedlow took to the stage to educate us on networks and outcomes.

First, California. Average medical costs have gone up 4.3x in CA since 1990; while there have been lots of regulatory and legislative efforts to add guidelines, enable managed care, and increase network usage, ultimate medical costs now are over $37k.

Network penetration in CA is now around 84% for physician services – where it looks like it has peaked.  Along with this increase has come an increase in administrative expenses.  WC Admin expense in CA now accounts for 53% of work comp costs, more than twice the average across the nation.

41% of those costs are for med management (31% for defense attorney expense). Bill review and network account for 47% of those medical management costs, UR is the remainder. (these percentages have been pretty static over the last decade).

So, what are you getting for all your millions?

Fortunately, CWCI’s done a lot of work to evaluate that very question. And they dug really deep. The slide below describes the data points CWCI used in their network evaluation.

Swedlow et al then looked at individual networks, comparing 11 different networks’ outcomes for claims (case mix adjusted, incurred between 2011-2014, developed thru 2017). Lots of takeways that will be published in a few weeks after final editing.

But here’s a spoiler –

There’s a huge amount of variation between networks, and some are delivering excellent results while others are worse than no network at all.   I direct your attention to the right side of the picture; note that average case-mix-adjusted cost per claim varied by 82 percent.

If you used the MPNs on the left side of the graph, your medical loss costs per claim would be over $11,000 lower than if you used the MPNs on the right.

And, your patients would get back to work two months earlier.

My takeaway is this – there are two types of MPNs; the State Fund and Kaiser Permanente On-The-Job type that is outcome-based, highly selective, and focused on care. This Outcome-based MPN, Or O-MPN is on the left of the screen.

And the revenue-based, that are focused on generating dollars off savings below fee schedule and other meaningless standards. On the right of the screen, the revenue-based MPN, or R-MPN, is huge, includes every provider in the book and some who haven’t been in the book for some time, is completely unmanaged, and generates beaucoup bucks for the payers that use it.

Lots of other great insights in the session which I missed – I had to run to get to the airport.

What does this mean for you?

Depends…Is your MPN an R-MPN or an O-MPN?  

 

 

May
21

Risk Managers and work comp outcomes

Posted by Joe Paduda on Monday, May 21st, 2018 | Comments

Walt Disney, Darden, and Publix’ risk managers gave their views on a variety of topics at last week’s NCCI AIS – including provider networks and outcomes.

Walt Disney direct contracts with providers, evaluates outcomes, and monitors those providers on an ongoing basis. The company also administers its own claims, has its own medical management staff, and tightly coordinates with it’s PBM – myMatrixx/Express Scripts.

Got to say, I’m pretty impressed with this approach, the depth of understanding of real costs drivers it shows, and the investment made by Disney.  Kudos to Risk Management VP Michele Adams and her colleagues.

That said, Disney has a major advantage over other employers – tens of thousands of workers located in one place equals huge buying power. I heard from several risk managers at the break that Disney’s situation is unique and one that doesn’t really apply to them.

My take – there is ALWAYS something you can learn from well-run programs. Instead of focusing on what you can’t do, focus on how you can adopt principles of successful programs in your situation. For example, buying power is a function of dollars per provider; the fewer dollars you have, the fewer providers you need.

Allocate your dollars to a few providers and you will get their attention. And yes, you can soft channel in so-called “non-direction” states.

Publix’ Marc Salm reported that his workers sometimes complain about specific providers they use, and those providers are often the ones with poorer outcomes.  Salm also seemed to infer that most large employers are focused on outcomes, and select providers based in large part on that criterion.

Marc may talk with different folks than I do; suffice it to say I haven’t encountered more than a handful of large employers that are engaged to any measurable degree in provider selection or network evaluation, much less outcomes.

My sense is this is the primary reason outcomes-based networks haven’t taken off; there just isn’t the demand.

That said, there are several companies – Albertsons’ being one – that rely on Kaiser Permanente On-the-Job (KPOJ) for all or a large chunk occupational care.  They’ve made the decision to work exclusively with KPOJ because the care model works, the providers’ incentives are appropriate, and most importantly, the outcomes are superior. So, perhaps Marc and I are talking with the same folks – at least in California.

Darden outsources network selection and pretty much all managed care functions to its claim administrator.

 

May
18

Blockchain’s getting more real in work comp

Posted by Joe Paduda on Friday, May 18th, 2018 | Comments

Kudos to NCCI for including an excellent discussion of blockchain in this year’s Annual Issues Symposium.

(Prior posts on blockchain are here.)

This is starting with reinsurance; a good summary is in presenter Paul Meeusen’s summary slide below.

Meeusen and his colleagues and business partners have moved very, very quickly. Many of the bigger names in insurance, reinsurance, and other service entities came together in December 2016 to figure out if and how to work together on blockchain.

Now, less than 18 months later, a company is working to set standards, coordinate communications, and define working processes.

Rather than get into the nits of this, I’ll focus on impact.

Remember – P&C insurance’s administrative expense load is stupid high.

And work comp is perhaps the worst offender; about 30% of premiums go to stuff other than paying claims. That administrative expense is, in the view of blockchain advocates, proof that WC is very inefficient. Therefore there is a significant opportunity to strip out costs while improving data quality, speeding up transactions, and reducing employers’ and taxpayers’ expenses.

The business case for blockchain – which I’m using here as a description of a broader use of technology to replace today’s cumbersome, error-prone, and high-friction administrative system – is so compelling as to render it inevitable.

It also means there are going to be a LOT more opportunities for consumers to insure things that are valuable to them – objects, events, structures, trips, you name it.

What this means for you:

  • Many of us who are “frictional cost” are going to lose our jobs.
  • Service companies who make their money doing admin work are going to lose their customers.
  • And other vendors, especially small ones who can’t afford to adapt to blockchain, are going to find they can’t service their customers.
  • But there are great opportunities for creative insurers to find new niches to service customers.

 

May
17

Opioids, marijuana, pain, and workers’ comp

Posted by Joe Paduda on Thursday, May 17th, 2018 | Comments

NCCI’s Raji Chadarevian discussed opioid utilization, price, and cost at NCCI’s AIS 2018.

6 percent of opioid medications used in workers’ comp is for treating opioid use disorder; methadone and suboxone are the drugs of choice.

The older the claim is, the more opioids are prescribed. For 15 year old claims, about 2.5 oxycodone pills were prescribed per day. As a result, claims that are more than 10 years old accounted for more than 50% of all oxycodone pills. And, the top 10% of users consumed 79% of pills.

Those heavy users also get a lot of other medications to help them deal with side effects of opioids (and other conditions). These users get about 7 non-opioid scripts for every 10 opioid scripts.  These drugs include gabapentin, benzos, and muscle relaxants.  Fortunately, Raji reported that there’s been a change over time as prescribers have shifted to non-benzo anticonvulsants and made other changes to reduce health risks.

Raji handed the mic off to Dr David Deitz (good friend and colleague). Dr Deitz gave a trenchant and informative description of marijuana, noting that way more is not known about marijuana’s (and its included compounds’) effects on humans than we do know. Some of the effects are reduced anxiety, reduced inflammation, euphoria, appetite stimulation and others you may have experienced yourself.

Dr Deitz then reviewed the state of the science on cannabis – there is substantial evidence of benefit for the treatment of chronic pain and the treatment of nausea due to chemotherapy.  Moderate benefit for anxiety, sleep loss, and appetite/weight loss due to HIV/AIDS has been found.

Evidently there are a lot of restrictions on research into marijuana by the FDA – some seem nonsensical.  These restrictions are screwing up research, and perhaps leading to wrong conclusions.

For work comp, cannabis may be useful as an adjunct, or secondary treatment for:

  • Chronic pain
  • Anxiety
  • Spasticity related to spinal cord injuries

Couple other key points.

Opioid mortality and the use of opioids for Medicare and Medicaid patients both declined in states with legalized use of marijuana.

58% of voters support legalization of marijuana, and 70% oppose enforcement of federal laws in states that have legalized marijuana.

The net – we don’t know much about cannabis, but we do know it absolutely helps in certain conditions, and most folks want it legalized.

May
17

Work comp is doing well. Really well, because claim counts are dropping.

Posted by Joe Paduda on Thursday, May 17th, 2018 | Comments

That’s the first top takeaway from NCCI’s Annual Issues Symposium.  Over the last 30 years the average pretax operating gain has averaged 5.5%; last year the return was more than four times higher.

 

The big news came from Kathy Antonello, NCCI’s Chief Actuary. (the bullets below are derived from different data, complete presentation is here). Note “NCCI states” does not include several large states; California, New York, Pennsylvania, Ohio, and others.

  • Claim frequency dropped precipitously – 6 percent, on top of last year’s 6.2%…over the last 20 years, frequency drops 3.7% per year (for carriers and state funds in NCCI states).  According to Antonello, “barring major unforeseen events, we do not expect this trend to change.” (I may have slightly misquoted her) Private carriers’ work comp premiums declined marginally…adding State Fund premiums still resulted in a marginal decrease.
  • WC combined ratio for private carriers improved to 89 – the lowest result in over 50 years.  That is a pretty amazing number.
  • Two big states – FL and NY – saw premium increases north of 9% (rates are available for all states)
  • Medical inflation for lost time claims increased 4 percent for funds and carriers in NCCI states.

A couple underlying stats reveal much more.

Comp premiums are driven by payroll and losses; payroll jumped 4.4 percent, while loss costs dropped by 4.2%. So, despite more pay to more workers, losses stayed flat.

Put another way, the frequency decline more than offsets increases in employment. So, the total number of claims likely declined significantly.

The result – filed premiums in the vast majority of states decreased last year, so most employers’ costs are decreasing. And, this may continue, as reserves are in very good shape, so insurers won’t have to raise rates in future years to build up reserves for past claims.

Finally, Kathy’s presentation was terrific. Great use of graphics, videos, and slides to communicate some pretty complicated and dense information. Kudos to the folks behind the scenes who developed the data, put together the graphics, and made it all understandable.

I’ll give my take on what this means next week; suffice it to say that this is:

  • great news for employers and taxpayers,
  • bad news for case management and other claims-centric businesses, and
  • going to force insurers to think very carefully about future capital investments.

There is a wealth of information in the presentation, SSDI and work comp, residual markets, BLS v WC claim rates – download it here.

May
16

Headed to NCCI

Posted by Joe Paduda on Wednesday, May 16th, 2018 | Comments

After the boys’ annual mountain bike trip – this time to Sedona AZ – its back to work.

Off to Orlando to take in NCCI’s Annual Issues Symposium; I’ll be live-blogging a few of the sessions, starting with the State of the Line Report where we’ll get a first look at last year’s work comp results, medical inflation rates, premium changes and various other key metrics.  Kathy Antonello does a bang-up job on this (supported by her able staff) so very much looking forward to it.

Bob Hartwig will follow; I’ll type as fast as I can but he’s always moving at warp speed…If I only miss half of Bob’s trenchant observations it will be a good day.

And we’ll be on top of our game for Dr David Deitz’ and NCCI’s Raji Chadarevian’s session on pain, opioids, and marijuana.

Rather than stuff your inbox with all of this at once, expect I’ll send them out over the next few days.

Beware…

May
4

Fast facts about work comp pharmacy

Posted by Joe Paduda on Friday, May 4th, 2018 | Comments

We’re pushing to finish CompPharma’s Annual Survey of Prescription Drug Management in Workers’ Comp next week. After cleaning up the data, we’ve got final figures.

Quick takeaway – we workers comp types are doing a MUCH better job controlling drug usage than the rest of the world  – and MUCH MUCH better controlling opioids.

Here are a few key data points:

  • Total drug spend was down almost 10 percent last year; drug costs are down 22 percent over the last six years
  • In contrast, other payers’ spend dropped 2.1%.
  • Opioid spend decreased by a third over the last two years.
  • Other payers’ opioid spend dropped by less than half that – 14.9%.

While decreases in opioid spend have been dramatic, payers are still extremely concerned about opioid consumption – especially among long-term patients.

There’s a widespread and deep concern among respondents (29 payers of all types) that we’re a long way from figuring out how to help long-term opioid users reduce/eliminate their drug consumption.

This year we dug deep into that issue, and one key takeaway is the current regulatory focus on formularies and utilization review is focusing on a problem – initial prescriptions of opioids – that, while not solved, is much better controlled.

Where payers, patients, prescribers, and PBMs need regulatory help is with chronic opioid patients. Respondents had a raft of suggestions…

  • mandatory urine drug testing done by labs not affiliated with the prescribing physician
  • prescriber documentation of improvements in pain and functionality required before continuing dosing
  • allow payers to reimburse for opioid recovery services while eliminating responsibility for non-opioid related psychological issues

What does this mean for you?

Work comp isn’t known as an innovative or progressive – yet here you are, well in front of other payers and work comp regulators.

Well done.