Category: Workers Comp

May
19

Is ACA affecting work comp medical waiting times?

Posted by Joe Paduda on Tuesday, May 19th, 2015 | Comments

Research to date says no.

Equian’s Glen Boyle shared some research with me that indicates there doesn’t seem to be any delays in claimants getting physician appointments.  Glen was following up on my post on NCCI’s research report at last week‘s AIS which also didn’t find any ACA-related delays.

Here’s Glen:

I tracked 10,000 claims for [an insurer client] (2012-2013 – matured 24 months with a minimum of 6 months maturity).  

The study focuses on Indiana, Iowa, Minnesota, Illinois, and Wisconsin.

The claims were placed into agreed benchmark categories and we are measuring dozens of data elements. Aside from DOI to first medical visit (and the time between subsequent visits), we are tracking the time to first major surgical service, the time to first PT (and the time between subsequent visits), and the time from the first medical treatment to the last medical treatment.  

 The 10,000 claims created our “foundational benchmarks”, and we just completed our first comparison of claims from the 1st quarter of 2014 (post ACA) with maturity through 9/30/14. We’ve also just completed another data pull with two additional quarters of new data, while updating the claims already in the mix. We were able to take our first look at some post-ACA benchmarks – many are still VERY immature, but DOI to first DOS develops immediately (FYI we show no delays to first office visit in any of the jurisdictions). [emphasis added] You had pointed me to the Robert Wood Johnson report and that seems to indicate that newly insured patients are NOT flooding into waiting rooms – so you wouldn’t expect any delays from that perspective.  

(this references a previous post on the RWJ study; excerpt below)

A Robert Wood Johnson Foundation report (thanks to AthenaHealth) report indicates docs are not getting swamped with newly-insured patients seeking primary care.  Key findings include:

  • New patient visits to primary care providers increased from 22.6% of all appointments in 2013 to 22.9% in 2014.
  • The percentage of visits with patients with complex medical needs decreased from 8.0% of appointments in 2013 to 7.5% in 2014.

So far, doesn’t look like primary care providers are overwhelmed – HOWEVER that is national data, and things certainly vary from region-to-region.

While primary care isn’t being overloaded, the health care delivery system is undergoing wrenching changes – with small, safety-net hospitals probably the most affected. Expect to see closings, consolidation, and takeovers as these most-vulnerable providers lacking scale, resources, and brand find they can’t survive.  For a glimpse into the near-term future, track what’s happening in California.

What does this mean for you?

17 months into full ACA implementation, there’s no indication that WC claimants are seeing delays in getting medical care.

May
15

Where’s the economy going?

Posted by Joe Paduda on Friday, May 15th, 2015 | Comments

In MCM’s ongoing effort to help you, dear reader, know things that will likely greatly affect your work world, here’s a quick review of economic predictions and implications thereof.

Moody Analytics is pretty optimistic about the future of hiring, employment, wage growth and the economy in general.

However that optimism is somewhat dampened by concerns overseas as key players in Europe and the BRICs are entering or going thru recession.

One key data point is the “quits rate”, which is simply the rate at which people are leaving jobs.  This is tracking higher, indicating people are moving among employers – according to Moody’s Adam Kamins this presages higher wages as employers have to increase compensation to attract and keep good workers.

Housing starts are a very big part of the recovery, and part of the reason things haven’t gotten better faster. There’s a good bit of pent-up demand, driven in part by millennials living with their parents at historically high rates. Obviously, houses can’t be built without construction workers (at least until 3-D printing of buildings gets a lot more prevalent – which it will…). According to Kamins, we are about 40% below the level we should be for housing construction – which equates to perhaps a couple million workers.

Expect this to be most heavily felt in the west and south, where construction permits have moved up nicely over the last few quarters.  Not surprisingly, the west has led in job creation for several years, with the south catching up over the last year.

Internationally, China’s economy is slowing – which isn’t surprising as it has been growing at a breakneck pace for several years.  Interestingly, Kamins said (I’m somewhat paraphrasing here) “Fortunately, the Chinese government has pretty tight control over the economy.”  With other countries’ economies in a bit of trouble, the dollar is strengthening leading to problems with trade – our stuff is really expensive, while their’s is cheap.  In turn this could hurt domestic manufacturing as demand for US goods drops off.

The dollar’s strength hurts tourism too; it’s really cheap to travel abroad for us but the US is a pretty pricey destination for Europeans and Asians these days.

May
14

NCCI’s PM sessions – hard core research geeks only

Posted by Joe Paduda on Thursday, May 14th, 2015 | Comments

NCCI, with the assistance of payer medical directors (shout out to Employers’ Dwight Robertson MD and David Deitz MD among others) presented on 4 research topic areas late Thursday afternoon.

After a long day of great talks (this NCCI has been the best I’ve been to in a dozen plus years) it was time for the real dense, pithy stuff.  I’ll summarize so you don’t have to write your own notes…There’s some really good stuff here.

Joint injuries

Barry Lipton discussed an analysis of knee surgery across six states; you may be surprised to hear costs, even after correcting for price variations, ranged rather dramatically across the six – by around 60 percent.  What’s a lot more surprising is the variation in diagnoses, particularly among strains.  The percentage of knee injuries that were attributed to strains varied by somewhere around 20 points from highest to lowest state.

Shoulders exhibited differences as well, however there were similarities between the two joints.  Namely, the variation in utilization for both was driven by surgery and physical medicine.  A question from the audience asked why there is such variation when treatment should be uniform…

Therein lies the issue.  According to the handout, “Utilization differences across our selected states are driven more by differences in the treatment for given diagnoses than to the mix of diagnoses.”

There was quite a bit more to Barry’s presentation; check out NCCI for more.

Next up, Drug Fee Schedules

NCCI looked at differences in the prices paid for drugs in an effort to assess the effect of fee schedules [FS] on prices paid.  Some quick highlights from Natasha Moore’s talk…

  • Just because states have similar fee schedules doesn’t mean the prices paid for drugs will be similar.
  • Prices in high FS states are generally higher than states without fee schedules
  • There’s quite a bit of variation in prices paid even a) after correcting for drug mix and b) among states with similar fee schedule levels.
  • However, lower fee schedules are correlated with lower prices paid.
  • Brand drugs are 22% of scripts, but 56% of cost

Time from injury to treatment – preliminary results

NCCI is workign on a long term study on the impact of the Affordable Care Act; their first effort focuses on time from injury to treatment.  Highlights are from data between 7/1/2010 – 12/31/2012:

  • 85% of trauma cases are treated within 3 days from date of injury
  • there are longer “delays” in seeing some specialists in some states

My view is this is not likely to bear much fruit; looking at time to treatment by specialist as a way to somehow evaluate the impact of ACA is likely to be confounded by multiple issues, including:

  • practice pattern variation
  • supply of various provider specialties
  • expansion of Medicaid – or not
  • state support of ACA enrollment e.g. California vs those antipathetic to ACA e.g. Texas

Perhaps an analysis holding provider populations level and using the uninsured rate would be more illuminating.

Impact of report lag on claim severity

Following on the ground-breaking work by the Hartford’s Glen Pitruzzello fifteen years back, NCCI looked at the impact of claim reporting lag on claim severity.

There’s a wealth of data shared; the net is the longer the delay, the more likely the claim will cost more – HOWEVER, the correlation is by no means linear and varies by type of injury (e.g. the most expensive fractures are those reported on the actual date of injury, next is during the first week).

A long day indeed…

May
14

First up at NCCI – Work comp is looking better…

Posted by Joe Paduda on Thursday, May 14th, 2015 | Comments

Workers’ comp net written premiums for funds and insurers were up substantially – 6 percent – over 2013, making for the 4th consecutive year of premium growth.

Meanwhile, the combined ratio for private carriers improved as well – down 4 points to 98, driven by a drop in loss adjustment expense, underwriting expense and loss costs.  State funds saw their combined stay flat at 115.

And yes, the industry returned a pre-tax operating gain  of 14% – NOT to be confused with “profits” or “return” – more on that in a later post.

This was driven in part by a decline in claim frequency – a continuation of a two-decade-plus downward trend in frequency.

This was the introduction to NCCI’s 2015 AIS provided by President and CEO Steve Klingel.  Klingel noted that the industry is rarely able to sustain profitability for very long; factors that may drive changes include the Feds’ moves on interest rates, employment growth, and changes in what defines “employee” and “employer”.

Noting the March OSHA document – essentially an indictment of workers’ comp, legal challenges in FL and OK, and press reports about individuals apparently mis-served by the work comp system (likely referring to the ProPublica/NPR series, much of which has been challenged here and elsewhere), Klingel’s sense is there may well be storm clouds in the near future for work comp.

Next up – the State of the Line…

 

May
12

Work comp in North Carolina – lessons learned

Posted by Joe Paduda on Tuesday, May 12th, 2015 | Comments

WCRI has done it again.

Carol Telles‘ just-published report on the North Carolina work comp system should be required reading for anyone looking to understand why and how costs and care change in response to regulations.

A couple of items make the point…

  • Hospital costs were “among the highest of the states we studied” – despite fee schedule and other changes in 2009 and 2013. There was an 11% drop in 2013 in outpatient surgery payments however whether that’s sustainable is questionable (my interpretation, not Ms Telles’.)
  • NC’s work comp claimants receive the highest income benefit payments among all 17 CompScope states – because settlements are higher and disability durations are longer. (there were reforms in 2011, but we don’t know the impact yet)
  • From 2009/10 to 2013/14, total costs/claim didn’t change much at all – in contrast to 8% annual increases seed in the prior 6 years.
  • There has been substantial reform over the fast six years…

There’s a lot more detail in the report, including the finding that the main reason medical costs haven’t moved much since ’09 is a reduction in utilization – primarily for outpatient hospital services per claim.

One other notable finding; there was a dramatic increase – 21% – in reimbursement for evaluation and management services in 2013.  My take is paying docs to actually talk with and “evaluate” patients may help hold down medical costs, and help reduce the longer-than-average disability duration seen in the Tar Heel State as well.

What does this mean for you?

Reform can effectively mitigate cost drivers IF that reform targets specific factors influencing costs.  

May
12

Off to NCCI…

Posted by Joe Paduda on Tuesday, May 12th, 2015 | Comments

The annual NCCI Annual Issues Symposium starts later this week in Orlando, where we will learn:

  • how the industry performed last year, thanks to Chief Actuary Kathy Antonello ;
  • what will drive workers’ comp in the coming years from several guest speakers;
  • how many slides the estimable Bob Hartwig can cram into an hour, yet remain both entertaining and informative;
  • whether ProPublica and NPR will attend to find out what is really happening in workers’ comp
  • what works – and what doesn’t – in containing costs from Rick Victor and Alex Swedlow

Along with NWCDC, CWCI, and WCRI’s annual events, the AIS is one of the four-fecta of must-go-tos for those looking to find out what’s really happening in workers’ comp.

I – and others – will be live-blogging from AIS, so get ready for a flood of feeds.

There will also be a good bit of live tweeting and probably myriad other social media feeds emanating from Orlando – but it just isn’t the same as being there on-site.

May
7

Medicaid and Workers’ Comp

Posted by Joe Paduda on Thursday, May 7th, 2015 | Comments

21 states have not (yet) chosen to expand Medicaid; one can (and I have) argued that this is nonsensical at best, as

  • the Feds are paying for ALL of the additional cost for another two plus years, and
  • the vast majority of the cost (90% +) thereafter; and
  • the savings to the states for uncompensated care would be anywhere from $4 to $9 billion;
  • health care providers in non-expansion states are in dire straits due in large part to the “non-expansion.”

My sense is the non-expansion states will eventually decide to accept the Medicaid deal as the financial cost to hospitals and health systems will force them to. And, the Feds will work with the states to create different models that will be ideologically palatable, providing cover to those politicians obsessed with such things.

But until – and unless – Texas, Florida, Virginia, Wisconsin and the rest expand Medicaid, there’s a raft of problems created by their principled if (in my view) wrong-headed position.

Mostly, these problems are due to two things.  Over the short term, the cost pressure placed on facilities and health systems and the fallout therefrom will lead to increased pressure to cost shift – and yep, work comp is a pretty soft target.

And long term, the 6.4 million adults who remain uninsured will be less healthy, have more incentive to get care under workers’ comp, and heal more slowly with more complications if they do get injured on the job.

What does this mean for you?

For work comp payers, nothing good.

May
4

Work comp pharmacy – it’s getting complicated

Posted by Joe Paduda on Monday, May 4th, 2015 | Comments

That’s the one-word takeaway from a read of Healthcare Solutions latest Drug Trends report.

A decade ago work comp pharmacy was driven overwhelmingly by utilization; ever-increasing volumes of pills prescribed and dispensed to claimants was the primary cost driver.

Now, price and drug mix have become the main concern.

Healthcare Solutions reported drug price inflation rate exceeded 8.6%; 12.4% for brands and 7.9% for generics. Overall, drug costs were up about 4%, indicating efforts to control the type and volume of drugs counterbalanced a good chunk of the industry’s price increase.

In particular, utilization decreased by 3.1%, a result that would have been unthinkable just a few years ago.

In part that was driven by a 1.4% drop in utilization of opioids, led in turn by a 2.1% decrease in usage of hydrocodone/acetaminophen, the most commonly-used opioid.

For those not steeped in the details of drug pricing and work comp, it’s important to understand that what work comp pays is based in large part on prices set by drug manufacturers; these manufacturers do NOT have prices specific to workers’ comp. Essentially all states with fee schedules for work comp drugs base those fee schedules on AWP (which is set by the manufacturer). And, PBMs’ contracts with pharmacies are based to a large extent on AWP; MAC (maximum allowable cost) is also used extensively for some generics)

A great example of price’s impact is the recent introduction of several wildly expensive Hepatitis C drugs; according to HCS, these drugs, “while not common in workers’ compensation, can be significant to a client’s overall drug spend if they do have a claim.  This is especially troublesome for healthcare clients [e.g. hospitals, emergency services].  Treatment can be upwards of $100,000.”

Another notable cost driver was the higher volume and prices for compound drugs; this is consistent with other payers’ experience.

I’d note that Healthcare Solutions’ clinical programs are quite good; I’ve audited those programs twice in the last few years and both the programs and results are excellent.

What does this mean for you?

Managing drug usage requires a lot more expertise, analysis, and intelligence than it used to.  It also requires payors listen to and work closely with their PBM.

Apr
28

California’s workers’ comp UR process is working.

Posted by Joe Paduda on Tuesday, April 28th, 2015 | Comments

CWCI’s just-released analysis of the Independent Medical Review program’s 2013-2014 results indicate it is working well – despite being flooded with requests from a relatively small group of docs.

Let’s stipulate that the IMR process is not fool-proof.  There’s no question errors have been made and it is likely some patients’ care has been adversely affected.  More on that below…

Here are the key data points:

  • 94.1% of all medical service requests are approved
  • 36% of requests were from the Los Angeles area but only 24% of WC claims
  • Of the requests that are NOT approved;
    • 45% are for drugs (29% for opioids, 12% for compounds)
    • 10% for DME
    • 9% for PT
  • 1 out of 17 medical service requests are modified (the treating doc agrees with the reviewer to do something different) or denied
  • review encompassed 260,889 medical services requested for 76,718 patients
  • 75% of reviewers’ guideline summaries cited the CA Medical Treatment Utilization Schedule; 80% of those cited either MTUS alone or MTUS and non-MTUS guidelines (there’s a lot of additional info in the report on pp 19-21 re guideline usage)

Okay, that’s the data, big-picture stuff.  What’s perhaps even more revealing is what some docs wanted to do to patients.  For example;

  • one wanted to administer Propofol to a patient getting a steroid injection because the patient gets “anxious”.  recall Propofol killed Michael Jackson, and is by no means appropriate for an ESI.
  • another wanted to fuse “every vertebra from the pelvis to the middle back in a 76-year old patient”, despite no documentation of a lesion, neural compromise, or “other clinical finding supporting the procedure”
  • I’ve also heard from a credible source (not in the report) that aspirin was denied to a patient because that patient was already on blood thinners…

What’s abundantly clear is the UR/IMR process has undoubtedly prevented medical catastrophes; opioid addiction, failed back surgeries, adverse drug reactions.

As noted above, we can also stipulate that the process is by no means perfect, however the reasons for those errors are by no means clear.  It certainly appears that the huge volume of IMR requests (the top 1% of docs accounted for 44% of all requests; 10 physicians alone accounted for one out of every seven requests!) overwhelmed the system initially, altho of late requests are being processed on a much more timely basis.

The exhaustive, 24-page review concluded with this statement:

The Workers’ Compensation Insurance Rating Bureau of California recently announced a significant decrease in medical benefit development coupled with a significant increase in expenses related to the delivery of medical benefits. IMR is likely to be associated with both trends. [emphasis added]

What does this mean for you?

Evidence-based medical guidelines backed up by a tight UR process prevents a lot of crappy medical care.  It can also be cumbersome, and is by no means perfect.

Apr
24

Friday catch-up from the (still) frozen northland…

Posted by Joe Paduda on Friday, April 24th, 2015 | Comments

Hello all!

Well, (or rather, HELL!) it’s snowing in upstate New York…hopefully it’s a bit brighter where you are. Lots happened this week, so here we go.

First, this really needs a series of posts, but it’s so important that better fast than thorough. There is yet more evidence that the earning power of the vast lower-middle class (and poorer folks too) has been steadily declining.  And that’s a major issue for workers’ comp. Here’s the money quote from Neil Irwin’s piece in the NYTimes:

there really is a shift away from the sectors where less-educated workers can earn a decent living. [emphasis added] In 1990, 40 percent of the prime-age male workers without a high school degree worked as operators and laborers, a number that declined to 34 percent in 2013. Jobs in food service, cleaning and groundskeeping nearly doubled in the same span, to 21 percent from 11 percent. But it wasn’t an even trade: Pay for operators and labors was $25,500 in 2013, compared with $20,400 for the food, cleaning and groundskeeping category.

You’re not imagining it. The jobs that are being created for less-educated workers really do pay less than the ones that are being lost. [emphasis added]

What does this mean for work comp?   A few things come to mind.

  • if good-paying jobs continue to disappear, it is going to be increasingly hard to re-employ injured workers in positions where they earn the same pay they did pre-injury
  • comp premiums may decline slightly due to lowered covered payroll
  • we may see more longevity and less movement among workers currently in those jobs, meaning there are fewer opportunities for experienced workers to get re-employed
  • it’s theoretically possible that people working at jobs that are disappearing may see workers’ comp as a safety net

The net is the work comp system is going to be dramatically affected by this economic trend.  We need to be talking about it now, thinking about the potential implications, and seeking solutions – now.

The Catamaran acquisition of Healthcare Solutions was followed almost immediately by United Healthcare’s announcement that the company is going to buy Catamaran. Personally, I think HCS was the linchpin of the Catamaran – Optum deal; HCS’ unique position in the WC PBM, bill review, network, and related businesses made Catamaran so darn attractive UNH ponied up $14 billion just to get in the WC game.

Well, maybe not.  More seriously, UNH will own the third largest PBM, trailing only CVS/Caremark and Express Scripts, Inc.  The combination of OptumRx and Catamaran will fill about a billion scripts this year.  Catamaran itself was a relatively small player a decade ago; it grew rapidly via acquisition and diversification (along with ESI it is the only PBM active in the work comp and auto sectors).

With this transaction, UNH continues to diversify; the chart on page 2 provides a rather striking view into just how diversified this former HMO company has become.  For some, $14 billion seems like a lot of cash.  Not to UNH; this is a company with revenues that will likely hit close to $150 billion this year.  For you work comp folks, that is about 180% of total US WC premiums. 

(full disclosure – I owned a tiny bit of equity in HCS from a prior role on the Advisory Board of predecessor Cypress Care)

The good folks at Washington Labor & Industry (and other state agencies) are asking for public comment on their revised Prescribing Guidelines for Opioids. The pdf briefly summarizes changes from current guidelines, and is well worth your perusal.  Kudos to the Agency Medical Directors’ Group; they continue to lead the way for the rest of the country.

There’s a rather troubling piece in the latest Health Affairs about the cost and implications of over-diagnosis and over-treatment of breast cancer.  As one who is somewhat troubled by the proliferation of pink everything everywhere (cue the calls for my summary execution as insensitive and uncaring), I see this as evidence of a movement in danger of running amok.  From the article:

The average expenditures for each false-positive mammogram, invasive breast cancer, and ductal carcinoma in situ in the twelve months following diagnosis were $852, $51,837 and $12,369, respectively. This translates to a national cost of $4 billion each year. The costs associated with false-positive mammograms and breast cancer overdiagnoses appear to be much higher than previously documented. Screening has the potential to save lives. However, the economic impact of false-positive mammography results and breast cancer overdiagnoses must be considered in the debate about the appropriate populations for screening. [emphasis added]

Is breast cancer a major problem? Yes. As a major killer of women, and a disfigurer that does deep psychological damage, breast cancer is one of the major public health issues nationally.  That said, telling women who DON’T have breast cancer they do, and treating them for it, is awful indeed.

Finally, Darrell Bruga of LifeTEAM asked me if there is any technology platform already being utilized in workers’ compensation that is designed with the end user being the INJURED WORKER? Does anything like that exist where the claims examiner, caae manager, etc interacts with the injured worker digitally to communicate, provide information, provide health information, etc.

I don’t know of any such app; if you do please let me know – email at jpadudaAThealthstrategyassocDOTcom or just comment below.