Category: Workers Comp

Feb
26

A very busy week – physician dispensing, WCRI, and the sequester

Posted by Joe Paduda on Tuesday, February 26th, 2013 | Comments

Here’s what’s up this week:

1. I’m at the Physician Dispensing Summit today in Boston hosted by PMSI and Progressive Solutions.  There are around a hundred attendees including regulators, payers, physicians,  researchers, retail pharmacy chains, and other stakeholders.

Among the sessions is the kickoff – Leigh Ann Pusey, CEO of the American Insurance Association – is doing the honors.  When the CEO of a group dealing with Dodd-Frank, the Terrorism Risk Insurance issue, flood insurance, and the sequester takes a day and a half to attend an event, you know the issue is vitally important.

Later on this morning CWCI’s Alex Swedlow will present the result of their research, which demonstrates the impact of physician dispensing on claim costs, outcomes, and disability duration. Tip – the research does NOT support dispensers’ claims that the practice improves outcomes…far from it.

2. WCRI’s annual meeting kicks off tomorrow – sure to be packed with timely info and research on cost drivers.  Nerd heaven…

3.  The sequester will affect workers comp – working on that post but no time to finish it before Friday (sorry!)

Feb
22

Opioids – the IAIABC responds, and others do too…

Posted by Joe Paduda on Friday, February 22nd, 2013 | Comments

After failing to approve model language developed by many volunteers working many hours over many months, the IAIABC’s Executive Committee came out with a press release discussing their decision.

First, kudos to the EC for the release. This is a very contentious and highly visible issue, so the release helps explain the decision.  However, the explanation itself has done little to tamp down the furor over the non-decision.

Second, the entire workers comp world had this as a no-brainer; of COURSE the IAIABC would approve model language; opioids are widely recognized as one of if not the biggest problems in workers’ compensation, the model language development process had been going on for over a year, and there was no real indication from the EC that they had significant problems with the language.  As the trade group for WC regulators, the IAIABC absolutely would be out front on this.

The guidelines were going to be discussed in a session at Operation Unite’s National Rx Drug Abuse Summit in April, a session that has been cancelled.  They were also going to be reviewed in another session at the same conference; obviously that’s not going to happen either.

And that’s why the Executive Committee’s failure to approve the model language was such a shocker.

The press release did say the EC wants the language re-done;

“adopting model legislation and regulation on opioid use could be interpreted as too narrow and restrictive for jurisdictions. The Executive Committee was concerned the models could unintentionally create conflict in jurisdictions that may be already taking steps to initiate regulations for appropriate guidelines. However, they contain valuable information, and as such the Executive Committee is asking that the issues addressed in the drafts be re-framed to offer policy considerations rather than a single policy response.”

Michael Gavin, who worked long and hard on the guidelines wrote at PRIUM’s Evidence-based blog that the EC’s failure to approve the model language:

is absolute nonsense and an abject failure on the part of this organization.

I cannot understand how “model” legislation would in any way harm a jurisdiction.  Can the elected leaders in any one of our great states not resist the vast power and influence of the IAIABC?  Is there no way that a suggested regulatory framework could be changed to the suit the needs of a specific jurisdiction?  Does the IAIABC hold such incredible sway over state legislatures throughout the land that the mere mention of controlling opioid abuse through model laws would cause political, cultural, and clinical mayhem?

Normally a reserved and diplomatic individual, Michael is saying what many others are thinking.  I’m guessing some members of the EC may have been surprised by the reaction to their decision.  IF they were, they shouldn’t have been.  This was, and still is, an opportunity for the IAIABC to lead from the front, to use its considerable influence to begin to stop the dying, the ruining of individual lives and families, the outrageous expense, the societal damage.

If the IAIABC moves quickly to publish comprehensive, specific, and definitive language, the damage – to the organization and its reputation – will be minimized. Call it model language, an example, a guideline, a framework; whatever.  If the process is extended and the result in any way nebulous, ambiguous, vague, or equivocal the damage done will be extensive and lasting.

The IAIABC has done much good work over its long history. The people who work at their offices in Madison, Wisconsin are dedicated, positive, very knowledgeable, and committed.  I’ve met and worked with several members of the EC and been impressed; these are individuals who’ve spent their professional lives working in a highly politicized environment yet succeeding more often than not in making progress on key issues.

To the EC members who blocked approval, I beg of you – get this done, and get it done now.

 

 

Feb
21

WCRI’s latest research says…

Posted by Joe Paduda on Thursday, February 21st, 2013 | Comments

 

The good folk at WCRI were kind enough to send me their latest CompScope research which covers workers’ comp cost drivers, components, the impact of regulatory changes, and trends in 16 states.

Needless to say, there’s a LOT there.  And I’d be ‘less than truthful’ if I said I’d read them all.  So, here’s what I gleaned from reviewing what I could in between working on client stuff.  The reports examined data from 2005/06 to 2010/11 for lost-time claims, providing insight into trends, the impact of regulatory reform, and changes in provider practice/billing patterns

  • Inpatient hospital payments per episode – a measure of price inflation – were up 36 percent on average over that period.  Remember, price is but one component of cost – others include intensity of services (e.g. using an MRI instead of an X-Ray) and utilization (how many MRIs per episode) plus the percentage of all claims that get that service (frequency).
  • Outpatient hopsital average payments per claim were up about 31 percent – but fewer claims used outpatient services…
  • The average payment per claim for hospital outpatient treatment/OR/recovery room services increased about 62 percent.
  • The variation in the use of opioids was striking.  17% of Louisiana claimants who started using opioids were still using them 3-6 months later, compared to about 3 percent in Arizona.
  • Less than a quarter of all long-term opioid users were tested for drugs via urine drug screening.
  • Surgical claims were pretty interesting.
    • Average payment for claim for major surgery (not including hospital providers) increased 27.6 percent; however there was essentially no change in the percentage of claims that had major surgery over the study period
    • However, utilization – the volume of services delivered to each claimant who did have surgery – was up about 10 percent.
    • So, we have price and utilization up, but not frequency (the percentage of claims that had surgery)

So, what does all this mean?

Well, surgical costs were driven more by utilization and price than frequency.  Outpatient hospital costs look to be all-but out of control. Clearly, payers need to do a much better job addressing these cost areas.

There’s wide variation in drug usage, indicating one-size-fits-all approaches probably will be too much in some areas and far too little in others.  Payers and their PBMs who understand regional differences will be better able to address this critical cost driver.

A good chunk of the research period was undoubtedly affected by the Great Recession.  Teasing out the impact of the recession will help drive deeper understanding in two ways; the impact of that most powerful of external factors, and structural drivers v macro drivers.

Feb
20

Opioids and the IAIABC’s need to lead

Posted by Joe Paduda on Wednesday, February 20th, 2013 | Comments

The International Association of Industrial Accident Boards and Commissions is the trade group for workers’ comp regulators, the folks who have assumed the responsibility of  advancing “the efficiency and effectiveness of workers’ compensation systems.”

By failing to approve model language for regulations/legislation addressing opioids, the IAIABC’s Executive Committee failed to meet that responsibility.

This may seem like a very small issue, one scarcely deserving of attention or even note.

It is not.

Opioid overuse and abuse kills claimants.  Ruins families.  Destroys lives.  Keeps claimants out of work far longer than they should be, while dramatically increasing employers’ and taxpayers’ costs.  Everyone knows this, understands the implications, and realizes that we must do everything we can, as fast as we can, to address the issue.  Yet the model language, developed carefully and wisely in a structured process by a group of committed experts and dozens of stakeholders working hundreds of hours, over a year-long period, for reasons unfathomable, was not approved by the Executive Committee.

I asked the EC why.  They told me via email that “the models would be overreaching on the part of the IAIABC…We believed the consequences of advancing this prescriptive approach could potentially harm jurisdictions more than help.” Frankly, I don’t see the issue. Model language is just that – language that provides a basis, a framework, a starting point  – it is NOT the final word, the only way, the best practice.  Each state takes that language, refines it, adapts it to meet their unique situation, environment, current laws and regulations, and does so in a process that works for them.

How model language could “harm” states is beyond me – and everyone else I’ve spoken with.  When I asked for specific reasons for their decision, the EC responded:

“adopting model legislation and regulation would be too narrow and restrictive. We were concerned the models that were presented could unintentionally create conflict in jurisdictions that may be already taking steps to initiate regulations for appropriate guidelines.” [emphasis added]

What conflict?  How?  Someone in some state might ask “Hey, how come our regs are different from IAIABC’s model language?” As if this never occurs, and is somehow a problem?  Would highly experienced, capable, intelligent, articulate regulators be stumped, unable to articulate a reasonable response, like “Things here in Texas/California/MIssissippi/Maine/New York are different than the rest of the states; we already have regulations/our laws require a different process/we have to address the issue primarily via utilization review/other intelligent response?”

I asked if this means the IAIABC will no longer promote model language, and got a nebulous response; “This decision will not impact future decisions to promulgate models and standards when appropriate.” 

Well.  If opioids are not “appropriate” than what, pray tell, is?

If you get the sense that I’m holding back here, you’re right.  I – along with many others who did a lot more work on the language than I did – are frustrated, angry, disappointed.  Yet I hold out hope that the EC will reconsider their decision, understand that this issue is far bigger than any individual concerns about how the model language may cause them a bit of stress, and approve the language.

The clock is ticking…

Feb
15

California State Fund’s great work on opioids

Posted by Joe Paduda on Friday, February 15th, 2013 | Comments

70 doctors are writing one-third of the scripts for opioids in California.

Most of those scripts are for conditions where opioids are NOT appropriate treatment.

Those claimants that get opioids are off work 3.6 times longer; litigation is 60 percent higher, and their claim costs are twice as high as claimants who don’t receive opioids.

Hopefully you’re not so jaded by the flood of bad news about opioids that you yawn and move on to updating your facebook status; given the ongoing flood of bad news about opioids that wouldn’t be surprising.  Most fortunately, California’s state workers comp fund (SCIF), is on this issue like white on rice.

Here’s some of what SCIF is doing:

Kudos to SCIF for their assertive stance; it is great to see a payer take this on with a comprehensive and well-designed approach.
What does this mean for you?
If SCIF can do it, so can you.  And yes, the CA rules may be different, but there are ALWAYS things payers can do to address opioid overuse.

 

 

Feb
14

Variations in medical care – it happens in PT, too.

Posted by Joe Paduda on Thursday, February 14th, 2013 | Comments

There’s yet more evidence that treatment patterns vary significantly across providers.  Today’s evidence comes courtesy of two academic institutions and Medrisk, Inc. (consulting client) which reported significant differences in the type and duration of physical therapy provided to workers’ comp claimants.

The study looked at several variables contained in billing data: location of service, duration of care, type of care, and other data points; the data was case-mix adjusted.

There are several key takeaways:

  • corporate physical therapy centers billed for more visits and more units per episode than other practice settings.
  • there was a “large difference in treatment utilization between geographic regions regardless of practice setting, diagnosis, body-part treated or surgical intervention”
  • these corporate centers billed for “a lower proportion of physical agents indicating a greater use of those interventions supported by evidence-based guidelines (exercise and manual therapy) compared to other practice settings.”

These findings were consistent across diagnoses and after controlling for surgical v non-surgical cases.

Let’s look at the second takeaway.  It should come as no surprise that the type, volume, and delivery of medical care one gets varies a lot from region to region.  While one would like to think that the care we get is based on science, in many instances the care you receive depends more on where your provider was trained, the local standard of care, and the personal opinion of the treater than what has been scientifically proven to work.

That said, the final point – that treatment in line with evidence-based medical (EBM) guidelines is more common in corporate settings is…intriguing.

Increasing the use of treatments for workers comp claimants that are in line with evidence-based medical (EBM) guidelines is a primary goal of many payers, regulators, and other stakeholders; WCRI’s just-published review of state workers’ comp regulations provides ample evidence of this trend.  While there could well be reasons the use of treatments supported by EBM were more common in corporate-based settings, the discussion in the report appears to address some of the key factors; delay in initial treatment, severity, and acute v chronic status.

Let’s be sure to recognize that these findings are general, overall, and based on statistical analysis.  Undoubtedly there are clinic-based, private, facility-based, and other PT practices that are quite focused on EBM and rigorous in their application.  And, to reiterate, there may well be sound and valid reasons for the differences noted by the stdy authors.

What does this mean for you?

1.  Good to see research focused on this key area of workers’ comp; with 15 to 20 percent of medical dollars spent on physical medicine, the more we know, the better.

2.  Payers should talk to their network partners to find out what type of care their PT providers deliver.  If they don’t know, find a network that does.

Feb
13

Medical malpractice and physician dispensing

Posted by Joe Paduda on Wednesday, February 13th, 2013 | Comments

So, here’s a question for you.  Given the patient safety issues inherent in physician dispensing of repackaged drugs to work comp claimants, are medical malpractice liability carriers considering this issue when underwriting coverage?

If not, why not?

Here are some of the problems with physician dispensing…

  • as research from CWCI and WCRI illustrates, prescribing patterns often change when dispensing rules and reimbursement change. If a patient is harmed, and the prescribing pattern changed before that event, is there added risk for the carrier?
  • the doc often has never seen the patient before, so they don’t know what medication the patient is taking, their medical history, or situation. If they dispense meds, they have to do so without full insightinto
    • the patient’s medical history
    • current drug regimen and possibly dangerous drug-to-drug interactions
    • other treatments the patient is receiving from other providers
  • most dispensing docs only give drugs to their workers comp claimants. So, if a workers comp claimants gets meds and has a problem, and a group health patient with the same diagnosis is treated differently, the plaintiff’s lawyer is going to ask, why? what was the motivator?
  • in many states, docs can and do dispense addictive drugs – opioids particularly.  There’s obviously a financial incentive for the doc to dispense meds to a patient, and if and when one of the doc’s patients is diagnosed as an addict, the plaintiff’s lawyer may well raise the financial incentive as a possible factor.
  • if the doc is dispensing opioids to a patient, and those opioids are being diverted, is there an issue?

And that’s just what I can think of off the top of my head.  I’m guessing underwriters and risk managers can come up with a few more…

 

Feb
12

Variation in hospital results – how to use the data

Posted by Joe Paduda on Tuesday, February 12th, 2013 | Comments

It has long been known that there’s wide variation in the type, quantity, and outcomes of medical care across providers.  A new report – research done by Dartmouth, and funded by the Robert Wood Johnson Foundation – looks at variations in re-admission rates among and between hospitals, and provides some striking insights.

The researchers used 2010 Medicare data; the overall results indicate one of eight surgical patients were readmitted within 30 days of discharge.  Non-surgical patients were readmitted more often; one out of six was back in within 30 days.

According to the report, the “issue of patients being readmitted to the hospital is considered important because many are avoidable and, as the report notes, can occur because of differences in patient health status; the quality of inpatient care, discharge planning, and care coordination; the availability and effectiveness of local primary care; and the threshold for admission in the area.” [emphasis added]

CMS recently began reducing reimbursement to hospitals with high levels of readmissions – which will make it really important for those hospitals.

So that’s kinda interesting, but not really. Here’s what’s really interesting.

The good folks at Dartmouth have published the re-admit rates for all hospitals, and you can download the spreadsheets.  Now before we go picking the best hospitals based only on their numbers, let’s look a little deeper.

Looking at two hospitals in my home state of CT, one can see the readmit rate for St Vincent’s in Bridgeport is much higher than Middlesex Hospital’s.  One answer may lie in the population; Bridgeport is a lower-income area than Middlesex, and likely has a much higher proportion of patients without adequate primary care and/or insurance.  Dartmouth provides some insight into this – 82% of patients discharged from Middlesex after congestive heart failure treatment saw a primary care provider compared to only 60 percent at St Vincent’s.

A couple other stats looked interesting; the data for surgical re-admits for UPMC facilities indicates they do a pretty good job keeping readmits down – and therefore overall quality is likely better than most (again this is just one data point).  Similarly, patients discharged after a heart attack from Geisinger’s Wyoming Valley facility have a high incidence of primary care follow up – compared to other facilities in PA (58 percent v 48 percent.  However, they’d be just above average in Wisconsin (54.4 percent).

What does this mean for you?

While there’s a LOT to digest here, I’d suggest one use would be for network direction.  Identify the hospitals with statistically better results, assess them for confounding factors, and think about how best you can direct patients/injured workers to those better-performing facilities.

 

 

Feb
7

WCRI’s Annual Meeting; what you can expect

Posted by Joe Paduda on Thursday, February 7th, 2013 | Comments

WCRI’s annual meeting is coming up at the end of the month in Boston; this conference always delivers a deep dive into key issues facing workers’ comp.  The brain trust at WCRI have made several changes to the conference over the last few years, most notably the data on which their research is based is much more current and covers more states.

I spoke with WCRI’s Executive Director, Dr Rick Victor yesterday about the conference and what attendees can expect.  Here – paraphrased – is what I learned.

The conference begins with an extensive review of treatment guidelines and unnecessary care, featuring a presentation by Prof. Thomas Wickizer of Ohio State on the evidence of the impact of treatment guidelines.  As payers confront growing medical costs and higher utilization, there’s a lot of interest in guidelines. But not all guidelines are created alike, and how they are implemented can be just as significant as how they are developed.  When I asked Rick what attendees can expect, he gave a very brief answer: “like the other discussions, evidence.”

What will be especially useful is evidence from both the WC and non WC worlds, and how UR does or does not compliment the guidelines; in addition the plusses and minuses of different approaches will be discussed and compared.

Recent WCRI conferences have included more coverage of external influences on workers’ comp; that continues this year with a discussion between former VT Gov. Howard Dean and Sen Judd Gregg (R NH) about the political dynamics affecting workers comp and healthcare. I asked Dr Victor what led to this expanded focus on external factors.

His response: “In 2008 the world shifted in fundamental ways that affected the lives and fortunes of most Americans.  You can’t really address WC effectively without talking about the impact of the financial crisis on people.”  He went on to promise not to depress everyone again with another “surprise”, so this year the external factors discussion will focus on solutions. He went on to say “The problems are well understood, so now we need to talk about how to get out of it.  Two people with different perspectives but both very thoughtful and experienced will help us understand where the leverage points are in the political process for meaningful change, and provide their prognosis.”

Finally, there will be a thorough discussion of the Opioid Epidemic, focusing on the urgency and scope of the problem both nationally and in workers’ comp.  Topics covered will include prescription drug monitoring programs, opioid guidelines, education and prevention, and the treatment of dependency.

The net – this year’s WCRI conference looks to be a don’t miss event.  Be there.

 

Feb
6

The last Coventry earnings report ever

Posted by Joe Paduda on Wednesday, February 6th, 2013 | Comments

As Coventry prepares to become part of Aetna, Coventry’s earnings report marks the last quarterly report we’ll see from Allen Wise and Co.  As par usual, I’ll split my review into two parts; workers comp (of most interest to many readers) and the rest of their business in a future post.  There’s no earnings call scheduled, so no Q&A with investors or presentation from management to mull over…

First, overall it was a strong quarter for Coventry with revenues up 10% driven by big growth in public-sector programs; commercial membership declined slightly. Quarterly profits also rose, altho annual profits were down about 4 percent.

Today, it’s work comp.

As far as revenues a tough quarter for the work comp division, actually a tough series of quarters.  Revenues dropped each quarter, albeit slightly.  However, the total decline was over $14 million over the four quarters, and the year saw a drop of $26 million or 3.3 percent from the prior year.

There were several business losses over the last year that undoubtedly contributed to the drop in revenues.  ESIS switched PBMs from Coventry’s FirstScript to Progressive, and moved other services from Coventry as well.  The PBM move probably had the largest impact on the WC Division’s financials, as the entire pharmacy spend counts as top line for CVTY thus losing tens of millions of pharmacy has a big impact on reported revenues.  The loss may have been a wake-up call to management, as there have been some indications that FirstScript is working to elevate its game.  However, it has a ways to go to catch up to the offerings of its competitors, almost all of which have a pretty significant head start.

While that was a significant loss, it was likely a good deal smaller than one that has yet to be felt; the US Postal Service moved their PBM business from FS to PMSI.  The deal was done late last fall and it should hit the financials sometime early this year.

To the credit of the WC Division and boss David Young, they were able to add enough incremental revenue thru price increases and smaller account wins to mitigate a good chunk of the loss of the ESIS business  and other losses.

So, where does that leave Coventry work comp?

A recent re-shuffle will put the division under former-CFO-now-head-of-National-Business Joe Zubretsky. Interestingly, former Coventry CFO Shawn Guertin is now working for Aetna in a top finance slot.  Guertin’s experience with the WC business will likely be the subject of a discussion or two between these two gentlemen…

Zubretsky’s most recent public comments about work comp have been pretty positive.  I fully expect Aetna to embrace the business; it has less regulatory risk than their core business, zero insurance risk, and may have some strategic benefit as Aetna looks to the future of disability management. And let’s not forget the strong positive cash flow generated by the division, cash that will be sorely needed by mother Aetna as they continue to prepare for 2014.

Net is we can expect Coventry’s comp division to flourish under Aetna; there may be some changes but I’d expect them to be positive, and we may even see investment in the unit.