Category: Workers Comp

Jan
23

UPDATE – Friday catch up, and follow up on the Aetna-CWCS story

Posted by Joe Paduda on Friday, January 23rd, 2015 | Comments

Congratulations to Accident Fund’s Jeffrey Austin White – Jeff has been named Director of Innovation at the top-ten workers’ comp insurer.  I’m honored to consider Jeff a good friend.  He’s also one of the smartest people I know, and has two other all-too-rare abilities; he gets to the crux of knotty issues very, very quickly, and communicates really technical, complex stuff clearly and simply – so much so that we far-less-brilliant folks can actually understand it.

Kudos to Lisa Corless, AF’s Chief Administrative Officer for creating the position.  Innovation at a work comp carrier – there is hope for the industry yet!

Thanks to WorkCompWire for highlighting Liberty Mutual Research Institute’s recently released Workplace Safety Index.  The top two causes of injuries – overexertion and falls.  C’mon folks, let’s get in better shape!

Health Reform Implementation and health insurance

Great article by Steve Davis in Health Business Daily on the public health exchanges – couple key data points:

  • the average benchmark health plan premium increase this year was 0 percent.
  • this despite only a 1 percent increase in the average deductible
  • a lot more health insurers are offering plans on the Exchanges; McKinsey reports a 27% increase in available plan options and 19% bump in the number of insurers participating.

It’s about the prices, stupid!

It’s long been known that the primary reason health care costs in the US are so much higher than in other industrialized countries is that medical services prices are way higher.  The good news is there’s more price transparency now than ever.

The latest comes to us from WaPo’s Wonkblog, reporting the price of a knee replacement varies from $17k to $62k – in the same city (Dallas). Hip replacement costs in Boston show an even greater range – $18k – $74k.

What’s interesting about this report (which comes originally from the Blue Cross and Blue Shield Association) is it is based on the price PAID for the service by Blues plans.

UPDATE – after a query from sharp-eyed reader PW, I spoke with the Blues about the price v cost question. Media contact Robert Elfinger told me the dollar figures are, in fact, the Blues Claims Rate.  That is, what was PAID for the service.  The report was not clear on this as it mixed “price” and “cost” repeatedly.

For those who bitch about “narrow networks”, this is precisely why narrow network plans will become the industry standard in the near future; health insurers must identify low-cost, high-quality providers and direct their members to those providers if they are going to survive in the hyper-competitive Exchange-based health insurance marketplace.

Low cost or wide networks – pick one.

And health insurers are doing just fine, thank you.  From UBS comes a brief summary of Unitedhealth Group’s recent financials, and they look pretty darn good. Medical costs are coming in lower than projected despite a pretty nasty flu season, and membership growth has been higher than projected (in part due to narrow network products).

Aetna and the layoff at Coventry Workers’ Comp Services

Last week I wrote about Aetna’s decision to raise the company’s minimum wage to $16 an hour and the subsequent layoff of 11 workers at subsidiary CWCS’ office in Franklin, TN.

I’ve been talking (via email) with Aetna’s Communications folks in an effort to a) make sure I get the details right; b) get their side of the story; and c) find out what the future holds.  To their credit, my sense is they’ve been really trying to be helpful – however for some reason they’ve not been able to provide much information.  Of late, they’ve been radio silent. Here’s what I have so far.

First, I said there were 11 workers fired; Aetna says there were only 8.  It appears that there were indeed only 8 laid off, however sources indicate an additional 3 will be.

Second, in their internal announcement of the increase in the minimum wage, Aetna said there would be no layoffs, that these would of happened in December if we were going to do anything like that.”  I reviewed all press releases after April 2013, and didn’t see anything about CWCS layoffs.  In talking with some of the laid-off workers, they told me they had no indication a layoff was coming and couldn’t recall any communication of any kind about a layoff. I’m not sure the “communication” over a year ago about “targeted job reductions” can be counted as a notice by any reasonable standard. Via email, I asked Aetna if the CWCS layoff had been communicated, and was told:

in the fall of 2013 after we closed [on the deal to purchase] Coventry (in May), we communicated integration activities over at least three years, including targeted job reductions as business units conducted the activities. 

This is obviously just an oversight; CWCS is a tiny part of Aetna, and on balance Aetna is clearly doing the right thing for the vast majority of its lower-paid workers.  For several thousand employees, the wage increase is a very big deal and one Aetna should be lauded for.

CWCS is a slightly different matter.  Clearly Aetna is looking to unload the division; equally clearly (at least to me) unless they accept a very low price, that’s not going to happen. While things play out, CWCS management is doing the cash-cow thing; slashing costs and outsourcing whatever they can in an effort to maximize profits.  I get it; it makes sense from a business perspective.  However, one would hope that CWCS would follow mother Aetna’s kinder and gentler employee relations philosophy.

Note – I informed my Aetna contact I’d be posting about this today and asked three questions about possible future layoffs and any efforts to help laid-off workers find other jobs; as of now they’ve not responded.  Fortunately, after reading the post, two area employers got in touch with some of the laid-off workers as they have open positions.

 

Jan
21

Drugs dispensed by docs may well be dangerous

Posted by Joe Paduda on Wednesday, January 21st, 2015 | Comments

Greg Jones has done a masterful job finding out just who is manufacturing the new “novel” drugs being dispensed by docs to workers’ comp claimants.

In his piece in today’s WorkCompCentral, Jones finds there are just seven companies manufacturing the three novel drugs with unique strengths about which WCRI concluded “it is likely that financial incentives drove some physicians to choose the strength for their patients.” [link leads to abstract, full report available for purchase here]

According to the piece;

Several of the companies [manufacturing the novel drugs] have been fined or warned by the federal government for engaging in unsafe practices, while another paid $12 million to resolve allegations that it paid kickbacks to doctors to prescribe its products. [emphasis added]

We aren’t talking minor misdemeanors, the FDA’s equivalent of parking tickets.  Here’s a quick summary of just a few of these companies’ transgressions.

  • Ranbaxy pleaded guilty to seven felonies and paid fines of $500 million for shipping drugs that weren’t tested for impurities and making fraudulent statements about quality-control tests.
  • Victory Pharma paid $11.4 million to settle criminal and civil allegations re paying kickbacks to prescribing physicians
  • Bryant Ranch was warned by the FDA for failure to put in place systems to prevent contamination during drug manufacturing.  Bryant was also manufacturing at least 10 drugs that were unapproved by the FDA.

There’s much more in Jones’ article, which should be required reading for legislators and regulators dealing with workers’ comp.  

The net is this – putting price controls on doc dispensing doesn’t work; it is blatantly obvious the doc dispensing industry has figured out how to keep generating huge profits despite legislation or regulations in 18 states intended to limit profiteering.

Those profits come from employers and taxpayers, and they come at the risk of sickening or killing claimants.

Thanks to Greg Jones and WorkCompCentral for this – it is wonderful to see that investigative reporting isn’t dead. It is also inspiring to see how real reporters work.

What does this mean for you?

Just say no.  Refuse to pay for doc dispensed drugs.  If providers in your network are dispensing, kick them out.

If your state forces you to pay, use whatever legal methods exist – and every state has them – to delay and deny payment.

Oh, and subscribe to WorkCompCentral, too…

 

Jan
14

TRIA’s renewed, and this means…

Posted by Joe Paduda on Wednesday, January 14th, 2015 | Comments

Well, that’s a relief. In a welcome display of bipartisanship, Congress passed and the President signed into law a six-year renewal of TRIA.  Here’s how AIA described the key elements and changes to the program:

Under the six-year extension in the bill, starting in 2016, there will be phased-in increases to the program’s trigger (raising it from $100 million to $200 million in annual aggregate insured losses) and the insurer co-share (raising it from 15 percent to 20 percent).  In addition, the bill phases in an increase in the aggregate amount of insured terrorism losses required to be borne by the private sector from the current $27.5 billion to $37.5 billion. Any use of taxpayer dollars to fund those losses would be recouped post-event.

I interviewed AIA Associate General Counsel and work comp expert Bruce Wood via email to get his take on the news.

MCM – What does this mean for workers’ comp?

Bruce – The extension of TRIA eliminates the uncertainty hovering over workers’ compensation insurers in providing coverage where the ultimate risk of loss is unascertainable because of the inability to exclude terrorism losses from workers’ compensation.

MCM – Some have criticized TRIA as unnecessary; can you speak to that?

Bruce – Some critics of TRIA have said not to worry, that employers would simply be written through residual markets.  But, it is insurers who backstop the losses in residual markets. In a state with a state fund serving also as the market of last resort, the backstop is either the state’s taxpayers or the state guaranty fund.  And, who backstops the guaranty funds?  The same insurers.

The ultimate irony for those who have criticized an extension of TRIA because it puts the government at risk is that without TRIA, the government is at even greater risk, as all losses would end up being socialized.

MCM – What about large, self-insured employers?

Extending TRIA also is beneficial to employers self-insuring, because they will be able to secure sufficient excess coverage to remain self-insured.  After 9-11, we saw some migration from the self-insurance market to the insured residual market because self-insured employers were unable to secure adequate excess coverage.  These included here is Washington, high-profile risks such as the Washington Post and the Kennedy Center for the Performing Arts.

What does this mean for you?

Six years of certainty – at least about this exposure.

Jan
9

Friday catch-up

Posted by Joe Paduda on Friday, January 9th, 2015 | Comments

The first week back from a couple of pretty slow weeks is always hectic – here’s a brief recap of what happened while we all were working.

The big news in the comp world is Congress passed the TRIA extension.  The President will certainly sign it, and we all can relax just a bit.  The six-year extension, which passed with overwhelming support in both Houses, includes a higher deductible and lower Federal cost-share in each of the next five years. The result will be more risk especially for smaller insurers who have less ability to cover potential claims from a major incident.

That said, the 9/11 attacks were just about the worst-case scenario, and the industry was able to absorb the financial hit without too much difficulty.

actually, that wasn’t the biggest news.

That was yet another announcement that the employment market is accelerating ; a quarter-million MORE jobs were added last month, lowering the unemployment rate to 5.6 percent. That bodes well for the insurance industry; the recent evidence that wages are improving is more good news.  Consumers’ energy costs down are dramatically, effectively increasing the average person’s annual wages by about $1000.

Expect consumer spending to increase; if moves to reduce the cost of housing bear fruit, that will help the construction and durable goods industries as well.

Here’s hoping our politicians don’t screw this up…

Thanks to Rob McCarthy for the heads-up on an op-ed piece by Ezekiel Emanuel recommending we skip that annual physical – they cost billions but there’s little evidence they have a positive impact on health or cost. Here’s the conundrum; from a societal perspective Dr Emanuel’s prescription makes sense, but as individuals we make decisions based on our own perceptions of risk and value...

A devastating piece about what it’s really like to be poor is making the viral rounds.  If you have ever blamed someone for being poor, having “too many kids” by “too many fathers”, for not using Medicaid or a free clinic, for smoking or not doing anything else you think they shouldn’t do, and not doing the things they should, read it. The whole thing. As one who is guilty far too often of these judgments, it was a virtual ice bucket in the face. 

Dec
31

The California comp world has lost a great one.

Posted by Joe Paduda on Wednesday, December 31st, 2014 | Comments

Anne Searcy MD passed away recently.

Dr Searcy had held various key roles in California’s work comp system; Medical Director, practitioner, regulator, program administrator.

By all accounts, Dr Searcy was a terrific physician, committed to the care of her patients she treated and the ones she touched in her myriad roles.  A close friend described her as a “wonderful woman, a real giant and decent person.  Definitely one of the good ones.”

A presentation she gave back in 2011 provides a bit of insight into her approach to medical care for workers’ comp claimants, one that is measured, careful, and focused on quality of care.

I never had the opportunity to get to know Dr Searcy outside of a couple of brief encounters.  My loss.

Her passing reminds us all that there are many people striving every day to do the right thing for the right reasons. They aren’t looking to make millions on the back of the work comp system selling too many drugs or doing too many surgeries; over-charging for services or undercounting employees.  They just figure out what needs to be done and go about doing it.

Dec
29

Pharmacy Management in Worker’s Comp – 11th annual survey

Posted by Joe Paduda on Monday, December 29th, 2014 | Comments

Is up and available for your downloading pleasure here.

Among the highlights are the following…

  • drug spend for the 25 respondents declined year-over-year, marking the fourth year of flat or decreasing spend
  • despite that good news, payers remain more concerned about drug costs than other medical cost areas
  • opioids and related issues again dominated the conversation (the survey was telephonic and took about 20 minutes) with respondents noting issues related to addiction, drug testing, fraud/waste/abuse/diversion, cost, delayed recovery and increased indemnity expense as concerns
  • compound drugs were identified as the biggest emerging issue
  • respondents also noted that regulations and legislation have not kept pace with developments in work comp pharma such as the growth of physician dispensing

The report contains a host of statistics, data, and insights from the respondents, along with perspective gained from doing the survey for over a decade.

Happy reading!

Dec
10

Work comp in 2015 – predictions from around the web

Posted by Joe Paduda on Wednesday, December 10th, 2014 | Comments

Before I make my annual predictions for the coming year, I decided to find out what other experts are saying and what external factors may drive the industry.  Here’s a quick summary.

Overall, combined ratios are looking good, premiums will increase due to relatively stable pricing, rising wages, and rising employment.

Next up, my take on what else will happen next year.

Dec
3

York’s acquisition of MCMC is done

Posted by Joe Paduda on Wednesday, December 3rd, 2014 | Comments

There won’t be an official announcement, but word will go out to employees tomorrow – the long-pending York-MCMC deal is done.

I spoke at length with a (very) senior York executive earlier today; this person did not want his/her name used, not to maintain confidentiality, but to keep the focus where the company wants it to be – on MCMC and Wellcomp and management of those organizations.

MCMC will remain intact, as will Wellcomp, York’s medical management subsidiary.  Mike Lindberg will continue to run MCMC and Doug Markham stays in the top spot at Wellcomp with no changes to management or operations at either organization.  Unlike other “business as usual” pronouncements we’ve read of late (TechHealth, Genex among them), I take this at face value.  The parent company is looking to enhance MCMC’s offerings with services provided by Wellcomp and vice versa, the idea being prospects and customers can get a broader array of services from the overall entity.

From an organizational standpoint, both MCMC and Wellcomp will report up to the overall holding company.

One concern I’ve heard is that York will pull MCMC back from some of their carrier/TPA relationships, this will NOT happen.  First, it makes no sense financially; a lot of MCMC’s revenue comes from other payers.  Second, York currently provides claims and other services to lots of insurance carriers and other payers; MCMC’s diverse client portfolio sort of mimics York’s.

What does this mean for you?

Back to the lede – no official announcement is coming because York and MCMC don’t want to raise concerns about potential changes.  That’s also one of the main reasons they didn’t hurry to get it done so it could be announced in Las Vegas; it isn’t about creating a PR buzz, it’s about stability.

From what I hear from people I trust, there shouldn’t be concerns.

Dec
1

What I learned in Vegas – great marketing wins

Posted by Joe Paduda on Monday, December 1st, 2014 | Comments

Great marketing wins.

myMatrixx’ limo service has done wonders for the company’s brand recognition; their ubiquitous limos were all over the place.  Very well organized, efficiently run, and impossible to miss at the airport or hotels.

MedRisk’s booth has featured magician David Harris for several years; he knows their products and services well, is incredibly skilled at capturing a crowd, and for many is a must-see; “I’ve got to see what he’s come up with this year!” (MedRisk is a client)

If you’re going to announce something “big”, make sure it really is – otherwise you’ll be the proverbial boy-crying-wolf.  To be meaningful, announcements should be either a) really big news (and not just what YOU think is big news) and/or b) really meaningful to prospects and customers.  A new product, venture, website, white paper, hire is NOT news – and no one important really cares.

Except – if it is really well done, notable, and timely.  Rising Medical’s Workers’ Comp Benchmarking Study is one of those all-too-rare reports that is truly newsworthy.  That’s because it covers key issues, is authored by a highly-regarded expert (Denise Zoe Algire), is not overtly self-serving, and the launch was very well done.

A few takeaways:

  • there’s always another opportunity for branding; yet another cocktail party or dinner or booth giveaway isn’t getting it done.  be creative.
  • find something great and stick with it.  You don’t need something new every year – unless what you’re doing isn’t working.
  • take a risk.  I know, I know, risk is anathema to work comp folks, but no risk, no reward.
  • it’s about execution.  The best idea will flop unless the details are done right. Those companies that spend the money (yes, effective marketing is expensive, that’s because it is worth it)
Nov
18

Women in Work Comp

Posted by Joe Paduda on Tuesday, November 18th, 2014 | Comments

The first Women in Work Comp Forum took place today.  As Healthcare Solutions CEO Joe Boures said: “long overdue.”

The good news is there was a similar meeting held a block or two away, so we’re catching up quickly.

Some are focusing on the “conflict” between these two meetings, a focus that is misplaced.  Rather, it’s a good thing – two separate sets of people motivated to bring attention to an ongoing issue/opportunity.  There were about 300+ in attendance, indicating there’s a big demand…

A few observations from panelists worth remembering.

  • Danielle Lisenbey, CEO Broadspire – be flexible and adapt; be true to yourself; know the numbers too
  • Nanette de la Torre – VP Zenith – embrace opportunities as they come; don’t take things so much to heart, not everyone’s going to like you and that’s OK.
  • Nina Smith-Garmon EVP Mitchell Int’l – have sponsors who will support you and mentors who will provide direction – and don’t worry about titles.
  • Michelle Weatherson – Director Claims Medical and Regulatory Div, State Fund of CA – take risks, temper what you do when necessary
  • Eileen Ramallo EVP Healthcare Solutions – don’t ignore conflict, address it and seek to understand issues

An impressive group with some very useful insights.  As the father of two smart, motivated, successful professional women, I was wishing the younger Padudas were in attendance.

Kudos to Healthcare Solutions for taking the initiative.