Before we jump into the above-cited topic, courtesy of the ever-enlightening Alex Swedlow, are Myths and Facts about work comp

• States with larger work comp agencies do NOT have higher work comp costs.  Nor is there a correlation due to red- or blue-state status.
• There is no correlation between fee schedules and total medical costs
• The arrival of an attorney on a claim (a quarter of CA claimants have attorneys) directly and significantly increases claim costs.
• There’s a strong correlation between attorneys per capita and work comp costs. Alex shared a great heat map illustrating this in various regions of Cali; shockingly SoCal has higher attorney involvement rates.

So, why is California’s WC medical so hard to manage?

1. It’s a very big state in terms of people and size
2. Almost no shared risk; copays, deductibles, etc that influence buying decisions
3. Disputes and dispute resolution have been a major issue

It’s this last issue that has gotten much of the attention – so CWCI has done a lot of research and published numerous studies on UR, IMR, dispute resolution and related matters.

There are two key takeaways – the vast majority of requested services flow thru the system without any review, and there’s a core group of bad actor docs who are flooding the dispute resolution system with requests for services that they know full well are going to be rejected. (this last is my interpretation).

Typically, once a utilization review system is put in place along with clinical guidelines, providers learn what will and will not be approved, and modify their behavior accordingly. For some reason, that hasn’t been the case in California, where the volume of IMR decisions increased by 15% from 2014 – 2015 – the opposite of what happened in TX.

Digging deeper, the aberrant behavior is concentrated in SoCal, due primarily to a relatively tiny number of physicians in Los Angeles.

In fact a mere 10 providers were responsible for one of every eight IMR decisions. And, 128 docs generated 48% of all IMR decisions.

These appeals are driven in large part by pharmacy – California’s annual spend on WC drugs is around a billion dollars, and about half of IMR decisions revolve around pharmaceuticals.  If CA implements a formulary, this spend could be cut by 15% to perhaps 50%.

Clearly the issue in California is NOT the wholesale denial of necessary care. Rather, it IS the fact that a very, very few providers are abusing the system while trying to deliver crappy medicine to their work comp patients.

That’s the top takeaway from the second presentation at WCRI’s annual meeting.

The researchers interviewed 6000 injured workers on topics including access to and satisfaction with health care, recovery of health and functioning, and speed/sustainability of return to work. (preliminary findings, results may change); efforts were made to control for factors that might affect results.

Across the 15 states, “substantial” return to work varied from 91% in IN to 81% in GA (sustained across at least 30 days, with the median of 14%.

My reaction is probably same as your’s; that’s awful.

Digging into the data indicates there’s a lot more to this.

• there’s a very solid improvement in health status across the surveyed population post injury;
• however the average respondent is still significantly less functional/has a significantly lower health status post-injury
• on average one in six injured workers reported “big problems” getting the medical services they wanted. (I know, that care may or may not be medically necessary or indicated)
  • a third of those workers said the problem was due to their employer or insurer discouraging them from going to a provider they wanted to see or getting a procedure (again, paraphrasing).
• 14% of workers were “very dissatisfied” with overall medical care
• Wisconsin consistently ranked better than most or all other study states; it’s also one of the highest medical cost states.
  • David Deitz MD noted that all the research into health care costs and quality show no correlation between expenditures and outcomes.

Kudos to WCRI for conducting this research; ultimately the work comp system and stakeholders therein should be judged based on outcomes.  That said, don’t make the mistake of taking results at face value.

Digging into data always reveals details that may confound or contradict initial impressions.

WCRI’s annual meeting began with a presentation on the relationship of fee schedules to case shifting.  Put another way, does physician compensation affect categorization of claims as work comp?

This followed their previous study (discussed here) on the impact of capitation on case shifting (kudos to WCRI for allowing me to present a different view in their webinar on the topic).

(note the report discussed herein is based on preliminary findings and subject to change)

The basic question addressed was “do higher fee schedules increase the number of workers’ comp cases?”  More specifically, do treating docs categorize claims as work comp because they make more money under work comp?

The research looked at knee arthroscopies across a couple dozen states; there was some consistency in prices paid in those states for group health claims; notably several states had much higher reimbursement for work comp than group health (CT, IL, NJ are three).

Key finding – “A 20% growth in WC reimbursement rates for office visit related services equates to a 6% increase in the odds of a soft tissue injury being called work related.” [paraphrase, may not be exact quote]

In contrast, there was no difference in trauma-related cases, which implies providers

David Deitz, MD noted a key consideration not addressed – the microgeography of health care varies quite dramatically within states and may be an important driver; this may be a fruitful area for further investigation. (the Truven database doesn’t allow for this type of analysis) Dr Deitz also noted the American Academy of Orthopedic Surgeons evidently recommends physicians consider type of coverage when determining whether or not to perform surgery.  (paraphrasing Dr Deitz)

Notably, patients may get significantly richer benefits if the claim is determined to be work comp due to indemnity benefits.

The researcher, Dr Olesya Fomenko, determined that two states in particular saw significant financial impact of this; there was a multi-million dollar impact in IL and TX due to the higher medical costs AND indemnity expense associated with the “higher number” of work comp cases due to case shifting.

A key question not addressed is this: how is the treating doc’s pay affected by the payer type?  Not the overall reimbursement differential, but the payment to the doc who actually makes the causation determination.

Late last week I sat down with WCRI President/CEO John Ruser to get his views on his first few months at the helm, find out what’s on the agenda at the WCRI conference next week (if you haven’t registered, get your fingers over here), and learn about future areas of focus.

MCM – What has been the most eye-opening for you as you’ve moved from the Bureau of Labor Statistics to WCRI?

Ruser – First off, it is an honor to take the helm of such a well-regarded organization with such a diverse membership and to be working with such an intelligent and talented group of colleagues who are committed to publishing high-quality, credible and independent research. Along those lines, what has been most eye-opening has been the tremendous support for the research from all stakeholders in the workers’ compensation community. I’ve always knew WCRI was well-regarded, but when you are in the position I am in and interacting with people all across the country, you really understand how truly special WCRI is and how important the mission is to provide policymakers and other stakeholders with the data they need to make more informed decisions.

MCM – What has been the most fun?

Ruser – Working for BLS, you put out data and that is it. However, WCRI has so much interaction with the workers’ compensation community through their rigorous quality assurance process (i.e., reviewers, state advisory committees, etc.). The other thing that makes WCRI different is our mission, which is to be a catalyst for significant improvements in workers’ compensation systems. So that is what is fun, to see the research being used by the community it is seeking to help.

MCM – What will attendees learn at WCRI’s conference next week?

Ruser – A big area of interest this year is opt-out. We have two sessions on opt-out that will provide a deep dive from multiple viewpoints. In addition, researchers from the Dartmouth Atlas project and NCCI will join our staff to discuss interstate variation in medical treatments. The conference will also include the latest research on prescribing of opioids across the country, which is an issue that garners great attention in and outside the workers’ compensation community. We are hopeful that presentations on the issue lead to changes.

MCM – Do you see changes in the research focus of WCRI going forward?

Ruser – Over the next two years, I expect we will be doing a lot of work on treatment guidelines; their impact on outcomes, procedures, costs, and injured worker outcomes. We are also working on an update on injured worker outcomes with surveys of injured workers. Areas covered by the surveys include access to and satisfaction with medical care, return to work timing, and earnings loss. There has also been a lot of interest in our work on case-shifting, so we will be doing a study to see if there is evidence of case shifting due to high deductible health plans.

MCM – Can you give a bit more detail on treatment guidelines? What’s driving that focus?

Ruser – In discussions with our members and other stakeholders, treatment guidelines have risen to the top of the priority list. There is interest in learning what leads providers to use treatment guidelines and to what extent treatment guidelines affect outcomes. Utilization review (UR) and compliance issues affect the former. We want to better understand what kind of programs are out there and how are they being used, do treating physicians comply with guidelines?, are denied services paid?, what are providers’ views of these programs.

We have begun semi-structured interviews with physicians in Louisiana re guidelines, and have seen a wide range of responses. We are learning a lot about providers’ views and, at the same time, gaining experience and expertise in collecting, analyzing, and using information from free-form surveys.

I expect we will use what we’re learning about text mining in another area – triggers of claimant attorney involvement. This gives us an opportunity to explore using broad questions to collect unstructured data, and then code that data to provide information. There is tremendous opportunity to use less-structured information in our research.