For those attending the National Work Comp and Disability Conference in Las Vegas next week, here are a few things you may want to check out.

Following up on last week’s webinar reporting the results of our Survey on Opioid Management in Work Comp, I’ll be discussing the report and answering questions at CID Management’s booth.  It’s an invite thing, so click here to get signed up.

Wednesday at 5:30 good friend and colleague Peter Rousmaniere will be discussing his new book, Work Safe: An Employer’s Guide to Safety and Health in a Diversified Workforce.  The event will be held in the Mandalay Bay Hotel; stop by either the Concentra or Broadspire booth to get details.

MedRisk (consulting client) will have their magician on hand; if you haven’t seen him do his stuff, it’s a must-see.

I’ll be at Millennium Labs’ booth (1245) Wednesday at 10 and 4, stop by to catch up on the latest in drug testing, new illicit substances making the rounds, and creative things folks are doing to try and fool the testers.

The AMA – American Medical Association is there.  You may want to ask them what their position on physician dispensing for profit is; I and others (thank you, American Insurance Association!) have been trying to get them to get real about this for years…their policy statement says it’s a no-no, but their lobbyists seem to support it.

Alkermes is the company that manufactures Vivatrol; the injectable intended to address opioid addiction.  I’ve heard some payers are considering the medication as part of a comprehensive treatment program – may be worth checking them out.

There are a ship-load of medical device companies on the floor, most with products intended for spinal surgical implants.  There are also a few companies offering solutions to the implant problem. You may want to visit one of the suppliers, then hop on over to a cost containment firm to compare and contrast… 

Gensco Labs – these are the wonderful purveyors of SpeedGel(r), that amazing concoction guaranteed to speed recovery, reduce pain, maybe even grow hair on turtles, and all for a price just ten times more than it’s almost-identical off-the-shelf competitor; Ben-Gay.

Ask them: How exactly is your stuff different and better than Ben-Gay? Show me the research!

Alas, Automated Healthcare Solutions (the folks who sued me for defamation in federal court, only to have the case thrown out), is not exhibiting; located in the same Florida ‘hood as Gensco, and sharing at least one corporate exec, perhaps they don’t want to steal the limelight…

I’m going to try and report from the conference, but with few minutes to breathe it will be difficult – at best.

Pleasant travels, and remember – what happens in Vegas, gets recorded on smartphones.

Specialty care is growing – in impact, popularity, valuation, attention. Meanwhile, the historically-dominant vendor, Coventry work comp, is shrinking.

Why?

I’d hazard a few guesses.

First, Coventry’s prior bosses starved the work comp unit, treating it as a cash cow but neglecting to ensure adequate feed for that cow. As a result, the bill review engine is rapidly running out of steam, the network is being overtaken by other generalists and hollowed-out by specialists, and little attention is being paid to case management, referral services, and other ancillary product lines.

A classic business situation, one that former Coventry CEO Allen Wise ordered with full understanding of the long-term consequences.

Now, it’s Aetna’s problem.

Word is the staff termination notices are starting to flow as the new owners look for ways to increase profitability.   Staff reductions may well hamper Coventry WC’s efforts to remain a  major player in comp – but that may not matter to the folks responsible for the business.  If their marching orders are to generate cash, then that they will do.

Meanwhile, One Call Care Management and Align sold for $3.2 billion. The entire work comp medical spend in the niches served by the new company is about $7.5 billion. 

I still have trouble wrapping my head around that.  And everyone – and I mean EVERYONE – I’ve spoken with can’t fathom that price for those assets.  By way of contrast, Aetna only paid $5.6 billion for all of Coventry – Medicaid, group health,  Part D, and work comp.

Leaving aside the price paid, does this mean specialty care is much more valuable/important/useful than the old-line generalist managed care firms?

Or is it just that Coventry’s lack of investment and neglect of product development has allowed other entrants into the market, entrants who have been able to capitalize on a market need not met by what was the company best positioned to do just that.

We don’t know what Aetna’s long term plans are for work comp, but the current staff reduction is an indicator – not THE indicator but AN indicator.  Meanwhile, the money is flowing into specialty care – and that’s where innovation, value, results, and progress will be.

What does this mean for you?

Work comp medical management will be fundamentally changed over the next two years.  It remains to be seen if that is a good thing.

The FBI caught two California politicians allegedly accepting bribes to stop legislation that would have drastically cut reimbursement for spine surgeries.

Here’s the money quote:

“We’ve been keeping him [a spine surgery hospital CEO] in business now for the last four years, because the governor kept pushing these regs (sic) to cut the funding on these spinal surgeries for workers’ comp,” [CA State Senator] Calderon was quoted as telling an agent during a conversation on Nov. 2, 2012.

“All we’ve been trying to do is hold off that cut so they continue paying for that. The way it is now, they are leaving it up to the administrator at workers’ comp to decide how much they pay for these implants, and if they get cut out of that, they are out of business. So that’s what we’ve been working the last four or five years. You know, we’ve kept them going. We’ve pushed it off, pushed it off, pushed it off.”

Now we know why employers have been forced to pay for the implants twice; a loophole in California WC reimbursement requirements allowed hospitals to bill for the devices as part of the facility bill then again separately (that’s not exactly it but pretty close).

The Calderon brothers allegedly accepted bribes well in excess of $28,000 from Pacific Hospital of Long Beach and related parties to stall or stop legislation that would have fixed the loophole.  According to an FBI affidavit obtained by Al Jazeera;

[State Senator} Ronald Calderon..accepted approximately $28,000 in bribes from [Pacific Hospital CEO Michael] Drobot in exchange for directly enriching Drobot’s business by supporting legislation that would delay or limit changes in California’s workers’ compensation laws relating to the amount of money medical care providers are reimbursed for performing spinal surgeries.

So, there was malfeasance perpetrated by plundering profiteers who were looking to suck money out of California’s taxpayers and employers.  That’s bad – very bad.  A complaint filed by California’s State Compensation Insurance Fund, Drobot and his affiliates “alleges that [Drobot] received $161 million through inflated surgery room and spinal implant reimbursement fees in what the state calls “multiple fraudulent schemes.”

What’s worse is it is likely many of the work comp back surgeries were unnecessary at best and harmful at worst. 

Most of the procedures involving devices (the driver of Calderon’s scheme) were spinal fusions, a highly controversial procedure.  In 2011, more than 465,000 spinal fusions were performed in the US, and “some experts say that a portion of them — perhaps as many as half — were performed without good reason. (WaPo)

According to the article in the Washington Post;

The rate of spinal fusion surgery has risen sixfold in the United States over the past 20 years, [emphasis added] according to federal figures, and the expensive procedure, which involves the joining of two or more vertebrae, has become even more common than hip replacement.

Kudos to Al Jazeera for breaking the news. Gotta love those local papers…