Category: Workers Comp

Aug
7

Physician dispensing in work comp is roaring back

Posted by Joe Paduda on Monday, August 7th, 2023 | Comments

mostly because insurers and employers have a been asleep at the switch.

Republishing a post with minor edits from two years ago…LOTS more on the sleazy business of physician dispensing here…

WCRI’s latest report finds:

  • Physician-dispensed drugs (PDDs) accounted for more than half of drug costs per claim in Q1 2020 in four states – Florida, Georgia, Illinois, and Maryland.
  • In 12 states, doc-dispensed dermatological agents accounted for most payments for this drug class.
  • Louisiana is worst-off, with employers paying $190 per claim for dermo drugs in the 1st quarter of 2020…Illinois is right behind at $181.
  • Kansas and Connecticut saw payments for those dermo drugs triple from Q1 2017 to Q1 2020.

That profit-sucking prescribing by docs in Connecticut is why total drug spend increased 30% in the Nutmeg State – making it one of two states that had drug spend increases. Florida – the home state of PDD – was the other. (Across all subject states, drug costs dropped 41%.)

Having lived in CT for over 20 years, I’m really stumped by the precipitous increase in skin care drugs.

What could POSSIBLY be driving this massive need for occupationally-driven skin care/topicals?

  • Did sun spots create a pandemic of skin cancer but somehow only affect the second-smallest state?
  • Did a massive refinery accident expose tens of thousands of workers to burns or skin infections?
  • Did a hyper-virulent new breed of poison ivy run rampant, affecting thousands of landscaping and municipal workers?
  • Did the emerging cannabis industry fail to protect its workers from fertilizer burns, exposing thousands of workers to painful blisters?
  • Did everyone in Connecticut suddenly become unable to swallow a pill?

Of course not.

The real question is this:

why haven’t insurers, TPAs, and self-insured employers used CT’s Medical Care Plan to ban physician dispensing? Payers including the Workers’ Comp Trust of CT have pretty much eliminated physician dispensing.

It’s not just Connecticut.  PDD costs are outrageous, and all credible research indicates PDD is totally unnecessary, increases medical costs, and prolongs disability.

WCRI’s research should be a call to action.  Legislators, regulators, and payers are doing their policyholders and clients a disservice by failing to aggressively attack physician dispensing.

And those clients and policyholders are equally at fault – it is up to you to work with your PBM and payer to stop this rampant profiteering. 

What does this mean for you?

Yeah, I know it’s hard.

Stop whining and get serious.

Aug
3

Survey of workers’ comp bill review – Fourth edition

Posted by Joe Paduda on Thursday, August 3rd, 2023 | Comments

Our fourth (!!) Survey of Workers’ Comp Bill Review is nearing completion…one of the good things about doing this every few  years is we can identify trends and the industry’s evolution.

This year we surveyed both executives and front-line staff. Shockingly, they didn’t always agree…

a few initial takeaways…(ratings are 1 – 5, with 5 being the best)

  • The Bill Review industry generally held its level of support from 2018. Overall average (all vendors grades from all respondents) was 3.2, just above, equal to 2018.
  • Despite respondents’ overall view not changing, there’s less differentiation among the major players; scores have compressed.
  • New entrants are making inroads
  • Customer service remains absolutely critical to a successful bill review relationship: considered the top reason a company would change bill review vendors and consistently ranked near the top for “most important bill review attribute”.
    • this is consistent across the dozens of surveys of all types HSA has done over the last 2+ decades…
  • There is a noticeable difference between executives and front line employees when evaluating customer service – front line average score 3.6 vs. 4.2 for executives.
  • Front line employees have different criteria for quality customer service than executives’…: front liners do not seem to care much about soft skill aspects of customer service but rather customization and timely updates while executives have a more traditional sense of customer service.
  • Automation is on most people’s minds – but it isn’t all positive. While nearly all talking about it want more automation (for TAT/auto-adjudication/quality reasons) some still need it to handle the basics better than it currently does.
  • E-billing, for largely the same reasons as automation, is getting more popular – especially among larger respondents and internally run bill review respondents.
  • Bill review vendors are seen as quite transparent – especially compared to 2018. 90% of respondents believed their bill review vendor to be transparent vs. just 52% in 2018. This is despite several complaints about how convoluted % of savings can be.
  • Flat rate pricing is rising in popularity while % of savings is not viewed favorably in most cases.

Cautionary note – these highlights are just that – highlights – and there’s often a lot of nuance underlying respondents’ views and perspectives. That will be described in the final report …a public version of the report will be available in a few weeks. (Respondents get a much more detailed version).

What does this mean for you?

Customer service.

Aug
1

RAND’s report on Alternative payment models in work comp…oh my…

Posted by Joe Paduda on Tuesday, August 1st, 2023 | Comments

RAND’s long-awaited research paper on Alternative Payment Models for California Workers’ Comp is out.

It is…underwhelming, incomplete, doesn’t focus on key metrics, did not include actual examples of APMs in WC (of which there are many), makes inappropriate comparisons, and…I could go on.

Yeah, I know it’s an initial study, but C’mon…

First, a couple intro notes…

    • in laypersons’ terms, Alternative Payment Models (APMs) are different payment schemes/methodologies used in an attempt to improve care/patient experience/save money.
    • APMs include pay for performance, bundled payments (e.g. flat fee for a surgical episode), per member per month flat fees, global payments and other models.
    • APMs are quite commonplace in Medicare/Medicaid, group health, and exchange healthplans and have been for years.
    • Broadly speaking, despite LOTS of different approaches, studies, methods and work, to date APMs’ impact on those metrics has been marginal.

OK…initial takes on RAND’s report. (note I haven’t thoroughly reviewed and analyzed all 95 pages, but wanted to get this out ASAP)

APM in WC

Most importantly, there have been numerous experiments AND long-standing programs with “alternative payment models” in California and other states…somehow RAND missed these. Yes RAND noted Ohio and Washington have done work on APMs, but RAND missed:

  • Carisk’s Pathways2Recovery Program (Carisk is an HSA client)
  • Paradigm’s HERO programs. – models include full risk transfer and episode of care payment for shoulder, back, knee and other diagnoses.
  • Medrisk has had an episode-based managed physical medicine reimbursement model in place for decades. (Medrisk is an HSA client)
    • other specialty network/service companies have had similar programs
  • and others I don’t have time to get into.

I note that these are very patient- and condition-specific and narrowly focused – similar to many group health/Medicare/Medicaid APMs…yet should have been included.

Inpatient vs outpatient

Across all payer types, care has been shifting from inpatient to outpatient settings. Unfortunately RAND spends a lot of time on inpatient APMs and nowhere near enough on the outpatient side. 

Outcomes

What is critically important in workers’ comp (and I argue SHOULD be across all payer types) is sustained and rapid return to functionality. There is precious little discussion of the central importance of this primary goal – and how it might/might not be affected by myriad different APM models/studies discussed in RAND’s report.

Comparisons

RAND relies extensively on comparing hospitals in the Hospital Value-Based Purchasing Program (HVBP) to critical access hospitals that are not in that program…without much discussion of the key differences between these facilities, differences that – I would argue – make comparisons sketchy at best.

One issue – poorer patients are more likely to get care at and represent larger percentage of the patient population at critical access facilities…that demographic also consistently rates patient experience lower than wealthier patients. Thus, comparing HVBP program patient experience data to critical access hospital data is difficult – at best.

Access to care

RAND makes a major point about “stakeholders” concerns about access to care. Actual real scientific research paints a different picture.

Let’s get real.

There’s a whole shipload of factors that RAND mentions (very briefly) that deserve a LOT more discussion.

One example – less than a penny of the US healthcare dollar is spent on workers comp medical. That, dear reader, makes it really hard to get the vast majority of health care providers to do ANYTHING.

What does this mean for you?

There are APM in WC…and a lot of history and knowledge and research and expertise around them. Much could have been learned if they were fully considered. 

For a lot less money.

 

 

Jul
27

Things you may have missed…

Posted by Joe Paduda on Thursday, July 27th, 2023 | Comments

The recession…or lack thereof.

News this morning that our economy grew at 2.4%…further encouraging news as it appears we are heading for a soft landing (ie very limited or no recession).

Also, personal income growth grew nicely at 2.5%…

From NYT:

“If you’re looking for a working definition of ‘resilient,’ look no further than the American economy,” said Joseph Brusuelas, chief economist at RSM. “This is absolutely rock-solid.”

Good info on the impact of the soft landing from HBR here.

What does this mean?

A good economy = more good-paying jobs and better lives for many.

From the desk of GB’s Dr Gary Anderberg comes an excellent summary of global warming’s impact on specific jobs.  Gary is excerpting from a KFF research report published in January…

“highlights” include:

  • We estimate there are over 65 million nonelderly adult workers in occupations at increased risk for climate-related health risks, accounting for over four in ten of nonelderly workers.
  • Among nonelderly adult workers, many people of color, noncitizen immigrants, and workers with lower educational attainment and income levels are disproportionately likely to be employed in jobs with increased climate-related risks.
  • Nonelderly workers in at-risk occupations are about twice as likely as their counterparts in less at-risk occupations to lack health insurance (16% vs. 7%)

And the temps just keep on rising...this summer will break all records for heat, deaths from heat, heat-related injuries…

and it’s only going to get worse.

What does this mean?

This global warming thing has real consequences – as in higher occupational injuries and illnesses.

Last – and most awful, “the greatest country in the world” – at least when comparing American kids dying by gunshot to other industrialized nations…

from KFF

What does this mean for you?

More of us know of more families devastated by gun violence. 

Jul
26

2023 predictions for workers’ comp – how am I doing? part 2

Posted by Joe Paduda on Wednesday, July 26th, 2023 | Comments

Loyal readers know I hold myself accountable…if I call out others, I need to do the same for my own errors and misjudgments.

also – I dumped my Twitter account and moved to Threads – joe_paduda is the handle.

so here’s the second half of my predictions for work comp in 2023 (first 5 are here)

6. The growing impact of global warming will force changes in risk assessment, management and mitigation; technology adoption; and claims.
The predicted (heat injuries, wildfires, hurricane intensity, sea level rise) and unforeseen (atmospheric river-driven flooding, landslides, and destruction and others) changes in climate and weather will lead to more and different injuries and illnesses, higher risks for fire fighters and public safety workers, and unpredictable problems related to polluted storm water runoff, water-borne disease and perhaps invasive species.
Yup. See reports of heat-related injuries in Texas, including this tragedy that led to a lawsuit. Much more to come…(he said with no joy)

And an excellent analysis by the brainiacs at Milliman...

credit the Guardian

7. Payers and perhaps regulators will make significant efforts to address rising facility costs.
As for-profit healthcare systems look to pad record profits and not-for-profits seek to survive, payers will be looking for better cost control answers than simply doing more of the same stuff they’ve been doing for the last two decades. Network discounts (NOT THE SAME AS SAVINGS) are declining as facilities wise up to most payers’ lackadaisical/ineffective attempts at employee direction and unsophisticated contracting strategies.
Smarter payers will deploy multiple payment integrity layers  – both pre- and post-payment. All should demand more – much more – from their bill review vendors/technology suppliers, all of whom have long refused to entertain the thought that they could do better – much better.

Inconclusive…some evidence but not anything indicating a trend…

8. Premiums will increase – mostly late in the year.
As infrastructure, green energy, re-shoring of chip manufacturing and EV incentives ramp up in the fall so will employment. While there’s disagreement among economists (yeah, who woulda thought??) expect big hiring in categories from archeologists and bridge builders to wireless broadband construction workers.  Manufacturing, heavy construction, trades, logistics will all be hiring…as these tend to be higher frequency (more claims than average) and higher severity (claims are more severe and costly) this means higher premiums and more claims.

Good news indeed for my friends in Cincinnati!

Too early to tell.

Oh, and mark me down for one who does not see a significant recession in our near future.  I know, I’m no economist (who disagree a lot about this) but hiring is too strong, these major investments are on the horizon, and inflation is coming under control  – all indications that a “soft landing” is more likely than not.

Somewhat inconclusive, although more economists are following my lead (ouch! sprained my elbow patting myself on the back!)

9. SB1127 – aka the CAFE Act (California Attorney Full Employment Act) will cause heartburn and consternation among Golden State employers and tax payers.
SB1127 shortens the time period for employers to determine the compensability of claims, a change which will lead to – among other problems – more initial denials and less time for injured workers to receive medical care while their employer researches the claim. Further, AB1127 appears to allow for penalties of up to $50,000 for claims that are “unreasonably rejected” by the employer – but the bill a) doesn’t define what constitutes an “unreasonable rejection” and b) doesn’t exclude claims that are already closed.

Expect attorneys to look for the Golden Ticket case – one that they think will establish precedence – and pursue it like a starving person at a Vegas buffet (or Cafe’).

Too early to tell

There’s good news too…I don’t see much else on the regulatory horizon that is cause for concern.

10. More consolidation among payers and service providers.

Yup. Enlyte bought Anthems workers’ comp network, accuro Solutions acquired Spashlight, Bardavon is looking for someone to buy them before it’s too late, and there are at least two other “processes” in process. 

Jul
24

Research on wearable tech – it’s the data too!

Posted by Joe Paduda on Monday, July 24th, 2023 | Comments

Two recently-published peer-reviewed studies give more insight into the utility and effectiveness of wearables/digital health.

Key takeaway – digital health will affect care management and patient recovery in ways we are just beginning to grasp. 

One study examined 864 patients’ use of Plethy’s Recupe program.

Top takeaway – The better a patient’s mood, the lower their pain level and the more they comply with their exercise programs. While correlation is not causation, the connection between mood and recovery is clear.

While this may be obvious, the real takeaway is wearable technology can be an early-warning system, giving care givers and other stakeholders (i.e. claims adjusters, care managers) real-time insight into their patients’ mood and pain level.

Instead of waiting for the practitioner’s notes, reading and interpreting those notes, and (hopefully) determining the patient’s mood and pain level, wearable tech can alert care givers and case managers to potential recovery-delaying issues and intervene before problems become entrenched.

Digital health – specifically a wearable sensor plus Recupe app – is also associated with strong adherence to a home exercise program, significant decreases in pain and improvements in range of motion. This descriptive study looked at total knee arthroplasty patients, finding “Recupe patients recovered to lower pain levels with fewer patient visits and health care utilization [than reported by other published information].”

What does this mean for you?

Taken together, these studies show digital health’s effects are broad indeed…the instant access to key data points can help stakeholders quickly respond to patients’ needs and issues.

note – Plethy is an HSA consulting client.

 

 

Jul
21

2023 predictions for workers’ comp – how am I doing?

Posted by Joe Paduda on Friday, July 21st, 2023 | Comments

Time to check in and see how well/poorly my predictions for 2023 are panning out…

  1.  The soft market continues…
    And it won’t harden in 2023. Medical costs remain very much under control (with  an exception), rates continue to drop, employment remains very strong (essential for return-to-work) and there’s lots of payers fighting for market share.
    So far so good…this is a done deal.
  2. Medical spend is NOT a problem – and will NOT be in 2023.
    With a couple notable exceptions – to be covered in a future post – medical inflation will remain under control. In part this is driven by much lower drug spend and more specifically the continued decline in opioid spend. The latter has a big impact on claim closure and total medical spend.
    Yep. Done deal #2
  3. Behavioral health and its various iterations will gain a lot of traction.
    More State Funds, carriers and TPAs will adopt BH programs, more patients will benefit, and more dollars will be spent. There’s a growing recognition that medical issues aren’t hindering “recovery” near as much as psycho-social ones. This is great/wonderful/long-needed and will really benefit patients and payers alike. Kudos to early adopters, and LETS GO to you laggards!
    No conclusive evidence one way or the other…
  4. One Call will be sold. 
    I keep forecasting this…and one day I’ll be right.  It has to be this year. CEO Jay Krueger and colleagues have OCCM on a better track, but structural problems (i.e. declining claim volume) and internalization of One Call-type services by Sedgwick and others make the future…less than promising. Couple that with recent ratings actions by Moody’s and S&P and it’s time to do the deal.
    Not yet…but increasingly likely.
  5. New technology will make its impact felt.
    Wearables, chatbots (I HATE THEM), and Virtual Reality-driven care are three ways tech platforms/systems/things will significantly ramp up in ’23. Expect several large/mid-tier payers to adopt new tech in a major way – aka not just a small pilot.
    Structural issues with health care (try to find a LCSW or Psych-trained counselor), lack of trained adjusters, and frustration with rising rehab expenses are all contributors.
    Ramping up is happening…albeit from a pretty low starting point.  Expect more to come in coming months

Monday – the rest of 2023 projections…

Jul
18

The cost of heat

Posted by Joe Paduda on Tuesday, July 18th, 2023 | Comments

While ignoramuses continue to deny we humans are changing the planet’s climate, folks with P&L responsibilities are calculating the cost of heat and heat-related injuries.

The direct cost of one “heat prostration” claim is about $38,000.

The average company has to generate $1.2 million in revenue to cover each heat prostration claim.

Want specifics?

Excessive heat also creates more injuries of all types…injuries to cherry harvesters in Washington State increase 1.5% for every 1 degree C above 25 C (77 degrees F) – mostly from falling off ladders.

California data shows:

    • compared to days with temps in the 60s,
      • on days when the temperature was between 85 – 90 degrees Fahrenheit…the overall risk of ALL types of workplace injuries was 5 to 7 percent higher.
      • when temps topped 100 degrees, the overall risk of injuries was 10 to 15 percent greater.

OSHA has a very handy calculator employers can use to estimate their costs – especially useful for the half of the country broiling under record temps.

Oh, and the workers most affected by heat? That would be the lowest paid workers, those leases able to afford time away from work…you know, the ones the work comp industry should be “advocating” for.

What does this mean for you?

Ignore science at your financial peril.

Jul
14

Work comp and workplace mass shootings

Posted by Joe Paduda on Friday, July 14th, 2023 | Comments

Sorry to end the week on a bad note – kudos to Texas’ Department of Workers’ Comp for highlighting workplace mass shootings in their just-concluded annual conference. The presentation is here.

The Lone Star state is all too familiar with these awful events [subscription required]…the most recent saw 23 killed and 22 others injured when a racist gunman opened fire in a Walmart store in El Paso.

It isn’t just Texas; we’ve had more than one mass shooting every day during the first three months of this year, with more than 600 victims.

California’s State Fund insured the Borderline Bar & Grill back in 2018; the State Fund’s handling of the awful situation provides a blueprint for all insurers…you would be well-advised to study up on that.

Compassion, creative engagement, empathy and doing the right thing no matter what were the basis of the State Fund’s response.

Until some measure of sanity emerges from Congress, the work comp industry will have to rely on improving the way it handles these disasters.

What does this mean for you?

Once again, work comp is left to handle society’s failings.

Jul
12

Quick hits – AI in WC, Automating construction, Junk healthplans and other misadventures

Posted by Joe Paduda on Wednesday, July 12th, 2023 | Comments

A week away from the blog is now past…here’s what I missed.

myMatrixx’ Chief Innovation Officer Cliff Beliveau – one of the smartest and most articulate tech people I have ever met – penned an excellent summary of AI’s potential uses in and impact on workers’ comp in yesterday’s WorkCompWire.

Cliff highlights key opportunities and challenges in claims, medical management, fraud detection and claims oversight…download his piece and save it.

Will automation disrupt construction? A better question might be “when will automation disrupt construction?”

Even better “when will what parts of the construction industry be disrupted by automation?”

All are addressed here.

Net is this – the author isn’t convinced we’ll see massive automation within the next decade...but points to a key use of technology that is already speeding up construction  – and making it more efficient to boot.

Surprise! medical bills and Junk healthplans – defined as plans with significant limits which often aren’t clearly identified up front – are facing increasing scrutiny. The White House is proposing strict disclosure standards and time limits on junk plans…

“The new proposed rules would close loopholes…that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most,”

The two – surprise! bills and junk plans, sort of complement each other…the junk plans don’t protect families from healthcare providers’ aggressive billing practices.

The proposed rule would highly limit duration of the plans, requiring clear disclosure of policy terms (as in written in English), and close coverage loopholes.

And one more note of interest for smaller employers looking at self-funded plans, and especially level-funded plans...AM Best’s April 28 2023 Market Segment Report indicates:

  • 2 out of 5 small employers (3 – 199 employees) are in level-funded plans
  • Just a year ago it was 1 out of 8 employers…
  • stop loss insurance loss ratios jumped to 85% in 2021 driven by new and very expensive specialty drugs and a lot more million dollar claims.

Just in the last year, 5 specialty drugs, each costing more than a million dollars annually per patient – have come to market.

What does this mean for you?

Smaller employers be very, very careful of self-insuring…