Julie Ferguson has posted the The Heatwave Edition of Health Wonk Review at Workers’ Comp Insider – it’s the only issue this July, so it’s chock full of wonkery. Check it out.
Jul
21
Insight, analysis & opinion from Joe Paduda
Jul
20
On the list of successful uses of social media in workers comp, one has to put Mark Walls’ LinkedIN Work Comp Analysis Group at the very top.
Mark’s group just passed 10,000 members. Yes, that’s ten thousand members – a pretty amazing feat considering the group is just a few years old.
Kudos to Safety National for accommodating, and encouraging, Mark’s work in social media. I have to believe it has been enormously productive for Safety National; Mark’s now hosting speaking symposia at the National Workers Comp and Disability Conference; the group has several ongoing conversations at any one time; Safety National’s name is far better known among the rank-and-file; and all at a cost of a few hours a week for one executive.
Safety National’s decision to promote and support the use of social media has been rather unique in the industry. I’m not aware of any other carrier or TPA of any similar size that has been so forward-thinking and, to be blunt, courageous. This is a very risk averse industry, yet the LinkedIN Group shows what can be accomplished if one has a bit of foresight, a good measure of dedication, and an excellent platform.
By way of contrast, this blog has just under 2700 subscribers and WorkCompInsider about the same. Notably, Roberto Ceniceros’ CompTime blog is gaining traction daily; it is likely among the leaders in any ranking. Undoubtedly this has greatly helped Business Insurance, which may be suffering from the same malady affecting all ‘old school’ media – a struggle to stay relevant and timely in the world of the internet.
I’d be remiss if I didn’t note WorkCompCentral President David DePaolo’s Work Comp World. David’s thoughtful discussion of contentious and complex issues is must reading for all execs in the business. He’s a professional with strong opinions, and the brains and diligence to back them up.
Finally, Pat Sullivan’s WorkCompWire continues to highlight the latest research and reports, coupling intel with advertising in a new blend that the rest of us are watching carefully.
Jul
18
Work comp PT network company AligNetworks has been sold to private equity investor General Atlantic. While terms weren’t disclosed, sources indicate the company went for a premium well above the ‘usual’ 6-7 multiple of EBITDA.
Butch Hofstetter and his team did a remarkable job, building a serious competitor to industry founder (and HSA consulting client) MedRisk and Universal SmartComp in a few short years. Leveraging their relationships, Butch and his team went after adjusters, relying on those relationships to drive transactional volume. The focus was a success, and the numbers certainly showed they’d carved out a solid niche.
While there were at least two strategic buyers in the mix, General Atlantic made the winning bid, leaving those entities looking to add to their portfolios to keep looking. While the GA people are undoubtedly very, very smart, this is also their first major foray into what is a pretty weird business space. My bet is they use of their additional capital (along with debt) to invest in IT and operational infrastructure. Align’s been able to handle their volume to date with a pretty thin operation, but they’ll need to invest if they want to move beyond pleasing adjusters to nailing down deals with some of the big boys.
That’s not to say Align hasn’t begun some relationships with larger payers; emphasis on the ‘begun’. However, that market has long been MedRisk’s sweet spot, and anyone who knows CEO Shelley Boyce knows taking share away from MedRisk will be a serious challenge. MedRisk has been working very hard to consolidate relationships with current large payers, while building the infrastructure necessary to deliver the same savings results to individual adjusters.
Regardless, this is good news for payers. More focus on physical medicine, which accounts for about a fifth of all workers comp medical spend, is a welcome thing indeed. And competition, especially between two such organizations, will produce better outcomes, more efficient processes, and lower costs for all work comp payers.
Jul
18
Five percent of people account for half of all medical costs.
That’s true for group health, Medicare, Medicaid, workers comp – pretty much every line of coverage.
You know that, I know that, we all know that.
But what do we DO about that?
Why do most payers use the same generic approach across all members, geographic regions, provider types, disease conditions, employers, when we all know health care is local, people are very different, surgical cases are quite different from medical ones, and non-specific back pain is NOT the same as a spinal injury.
Not surprisingly, there’s a strong correlation between obesity (and related conditions) and high cost claims. And half of the patients in the top five percent had hypertension, one-third had high cholesterol, and more than one-quarter had diabetes.
Here’s one idea. Identify patients with hypertension, hyperlipidemia, obesity (use BMI) and/or diabetes, and triage them to a clinical resource (nurse) trained in, and equipped to, address their issues. Whether you’re in the workers comp, group, or Medicare/Medicaid world, the impact of these unhealthy folks on your results will be mitigated if you pay attention right up front rather than discovering some months down the road that the ‘simple bad back’ has become a very expensive, long term, chronic pain case.
Jul
15
The Medicare drug program – Part D – was the largest expansion of entitlement programs since the Great Society.
And it was – and is – a Republican program. A political masterstroke, Part D undoubtedly helped George W Bush get re-elected along with many GOP legislators, as seniors loved the new program
It was also completely unfunded; short term, long term, any term. The GOP decided to NOT set aside funds, or raise taxes, or cut other programs; they just passed Part D, committed to paying for it out of ‘general funds’ and to hell with the future.
Well, the future is here, and to listen to Eric Cantor, you’d think he had nothing to do with Part D.
The latest Medicare Actuary report indicates the GOP-passed Part D program has contributed $21.5 trillion to the ultimate Federal deficit. (page 146)
I bring this up not to anger my conservative readers, but rather to educate some who aren’t aware that Part D, and the costs of Part D, are the handiwork of Eric Cantor, John Boehner, Mitch McConnell et al.
Yep, the strident voices screaming for cost control were single-handedly responsible for a program that’s added $9.4 trillion to the ultimate deficit.
Here’s how one Libertarian sees the GOP legislators who voted for Part D.
“In particular, anyone who was in a position to vote on it, and voted for it, can simply never, ever be trusted to guard free enterprise or the Constitution against the ravages of Washington’s welfare state…Every single one of these folks, without exception, is in no position to criticize Obamacare or claim to want to beat back the tide of socialism [emphasis added] that supposedly began only two years ago when Obama rose to power. Every single one of them voted to shovel tax dollars to the pharmaceutical industry and the wealthiest age demographic — the elderly — in unambiguous defiance of the Constitution, individual liberty, the free market, fiscal sanity and classical American values.”
Jul
13
While the news this morning is not good, I still don’t think Congress will fail to raise the debt limit; the economic consequences would be catastrophic, and there’s too much political risk for either party to allow it to go that far.
And really, this whole argument is pretty dumb. The fight is about whether or not the United States will pay for debts already incurred to fund defense, Medicare, the CDC, NOAA, the Veteran’s Administration, National Parks, the Corps of Engineers, the FBI… Congresses already authorized those programs and the costs thereof, Presidents signed them into law, and, like any responsible entity, we have to pay for them.
We can’t just tell the world, and our own citizens who hold the nation’s debt, “Never mind, we decided we don’t want to pay you back the money you loaned us.” That’s unethical, immoral, and by my read, illegal.
Lost in the nastiness is the simple fact that those refusing to consider raising the debt limit are going against the Constitution, specifically the Fourteenth Amendment, which reads in part “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” (The Fourteenth Amendment was passed after the Civil War, and this Section (4) was specifically designed to ensure the US paid its war debts, while repudiating those of the Confederate States.)
But, what if?
Here are a few ways a failure to raise the debt limit may impact providers, payers, and the rest of us.
1. payments to providers for services rendered to Medicare recipients could be delayed.
2. transfer of funds to the states for the Federal government’s portion of that state’s Medicaid obligation could be delayed.
3. other Medicare-related funding, including direct payments to hospitals, could be delayed.
4. Medicare fiscal intermediaries (the companies that process Medicare payments) may see their compensation delayed.
5. enforcement actions may be put on hold if they are deemed ‘non-critical’
6. payment of funds for graduate medical education may be put on hold, just in time for the fall academic term
Here’s hoping it doesn’t get that far.
Jul
12
From our friends on the west coast comes a story that demands much more discussion – the California State Fund’s (SCIF) decision to change its contracts with treating physicians in SCIF’s Medical Provider Network. [membership required] To read the response from a couple of California work comp groups, you’d think SCIF was stealing their kids and selling them.
It’s not like SCIF is imposing onerous terms, slashing payments by half, or requiring treating physicians to do anything immoral or illegal. What SCIF is doing is addressing the ongoing, rampant overuse of opioids in California, a disaster that has been well-documented by CWCI. Among other provisions, the new provider contract language:
“requires physicians to limit prescriptions for opioid medications to 60-day supplies unless they can show cause for a prolonged regimen. [emphasis added]
CSIMS [California Society of Industrial Medicine and Surgery] charged that such limitations potentially run roughshod over tenets of California’s statutory Pain Patient’s Bill of Rights.
In establishing the legitimacy of opiates in the treatment of pain, California Health and Safety Code section 124960 allows physicians to prescribe opiates in a dosage deemed medically necessary, the group noted.”
For several reasons, I’m having a very tough time understanding CSIMS’ position.
1. Physicians CAN “show cause” for prescribing more than a 60 day supply.
2. the Safety Code allows docs to prescribe if medically necessary; (we’ll ignore the likely unimportant distinction between opiates and opioids) one would think that the meds will be approved if ‘medically necessary’; the reforms earlier in this decade addressed the definition thereof and have been thoroughly clarified in regulations and litigation.
3. Physicians can freely agree to participate in SCIF’s MPN, or not. They have no legal right to participate, and SCIF has no legal obligation to include any specific provider or group of providers in their MPN.
4. Finally, and most troubling, is the head-in-the-sand attitude of CSIMS and their supporters. The widespread and wholesale abuse of opioids in California’s work comp system is not a theory; it is real, it occurs every day, it kills claimants, runs up employers’ costs, increases the tax burden, and does immeasurable harm to families.
CSIMS’ position is untenable, illogical, and indefensible.
There’s more to write on this, and I’ll expand on the topic in future posts. Of course, I welcome dissenting opinions, as long as they’re factual.
(thanks to Mark Walls’ LinkedIN Work Comp Analysis Group for the tip)
As if we needed more evidence of the problem, the latest in the ongoing litany of news about the impact of prescription drug abuse is this:457 people in Michigan died as a result of prescription drug abuse in 2009, a twelve percent increase from the year before.
That’s more than died from heroin and cocaine (and its various forms) combined.
Jul
8
The number of of people dead from opioid analgesic use quadrupled over the last nine years. Opioids are synthetic opiates, and include methadone, OxyContin, Percocet, Oxycodone, fentanyl, and Actiq.
11,499 people died as a result of opioid usage in 2007, up from less than 3000 in 1999.
That’s twice as many as died from cocaine, and five times more than died from heroin.
The data come from the CDC’s National Vital Statistics System, and was published in the CESAR bulletin of May 31.
Another study published in JAMA indicates significantly higher risk of death for those taking more than 100mg/day.
This dosage level is not uncommon in workers comp, and the high dosage, coupled with long-term usage of opioids, significantly raises the chance of death from overdose. In fact, in comp, – over a third of claimants who start using opioids are on them for more than a year; a fifth are on for more than two years; and a seventh are on for more than three years.
And the usage of opioids in comp is exploding – the number of scripts is up 500% in California – in only four years.
The unknown is how many workers comp claimants are dying from opioid overdoses. I’m thinking that ‘unknown’ will not remain unknown for much longer, and when the data does come out, there’s going to be a lot of ‘energetic’ conversation about who’s at fault and what to do.
Here’s hoping we get to solutions pretty quickly.
Jul
6
In the last couple weeks there’s been a wealth of new reports, analyses, and studies released about various aspects of the work comp world. Too many to give each the attention it deserves, so a synopsis of a few will – alas – have to suffice.
Yesterday David DePaolo posted on his contention that there aren’t “any valid scientific studies demonstrating that the introduction of an RBRVS fee schedule would result in a mass exodus of physicians from workers’ compensation”. After asking for examples of same, he received seven plus an article that his own WorkCompCentral published six years ago. (thanks to Mark Walls’ LinkedIn Group for the tip)
David hasn’t reviewed each of the “studies” he received, but a quick analysis indicates the scientific rigor of most is rather less than, well, rigorous. Several appeared to be telephonic surveys of doctors’ offices (several studies didn’t provide any information on methodology). At least one [opens google docs] made several conclusive statements without any discussion of how they arrived at those conclusions. Another authored by the same writer provided background on the methodology, which was a phone call to physician offices where the person answering was asked if the physician accepted workers comp patients.
A quick read indicates the methodologies used appear to be rather less than scientific, the conclusions based on opinions of cause and effect rather than rigorous analysis. That’s not to say that low fee schedules may well influence physician participation, but rather to point out there’s not much in the research provided to conclusively demonstrate the linkage.
From the good folk at WCRI comes the latest research on narcotic usage in workers comp. While this particular aspect of the subject (interstate variation in usage of narcotics) has been explored in some detail by NCCI, WCRI’s report looks specifically at usage for non-surgical lost-time claims in 17 states for the period 2006 – 3/2008. The report indicates usage on a per-claim basis was highest in LA MA NY and PA, with those four states plus CA, NC and TX showing a higher proportion of claims with long-term usage of narcotics than average.
Shockingly, few long term users were monitored according to medical treatment guidelines…
Meanwhile, the government shutdown in Minnesota means the state’s WC Division is closed for all but critical services.
On the good news front, the ‘low cost’ (well, it’s relative…) movement has entered the surgical device industry, with the WSJ reporting the emergence of a new business model; “Low-cost orthopedic parts [are] cheaper versions offered with a no-frills sales approach. This typically means not sending sales representatives into operating rooms to advise surgeons, which is a common but cost- and labor-intensive practice.”
I’d note that there are several companies currently focused on this space in workers comp, but with a different model. They find out about a scheduled surgery, identify the devices to be used, and order them on behalf of the insurer – usually at a much lower price point than that charged by the facility.
Jul
5
When Congress reaches agreement on a deal to increase the debt limit, there will almost certainly be parts that significantly affect workers comp. Medicare and Medicaid are on the table, with both likely to lose hundreds of millions in funding over the next ten years.
And as we all know, what happens in Medicaid and Medicare affects work comp via cost-shifting, fee schedule changes, reimbursement rules, and altered provider practice patterns.
It is not a question of ‘if’ these huge programs are cut, but rather “how much”. Accounting for 23% of the Federal budget, Medicare and Medicaid have to be on the table if there’s to be any measurable deficit reduction.
Here’s what may happen in the ultimate deficit reduction agreement. along with my assessment of potential impact on work comp
– Reductions in the amount Medicare pays hospitals for bad debts resulting from Medicare beneficiaries’ failure to pay deductibles and co-payments; right now CMS pays 70 percent of those debts after the hospitals make “reasonable efforts” to collect.
Impact – hospitals will look to increase reimbursement from work comp and other private payers; work comp is usually the most profitable payer for hospitals; I’d expect this to increase.
– Cuts to Medicare payments to teaching hospitals for physician training and other programs.
Impact – more incentive to seek additional reimbursement from work comp
– Allow or require CMS to negotiate directly with pharma for drug prices.
Impact – possible cost shifting to comp as pharma and other stakeholders seek additional funds to offset lower Part D reimbursement
– Reductions in Federal subsidies for Medicaid.
Impact – incentive for providers to cost shift; however Medicaid providers may not treat many work comp claimants so impact may be minimal.
– Give more power to the Independent Payment Advisory Board (IPAB) created by the Affordable Care Act; set a target of holding Medicare cost growth per beneficiary to GDP per capita plus 0.5 percent beginning in 2018.
Impact – possibly positive, as improvements in delivery systems, reimbursement, pay-for-performance, clinical guideline adoption and acceptance, and other tools/processes would help improve care and reduce errors.
– Reduce reimbursement for durable medical equipment (seen any scooter ads lately?)
Impact – lower margins for DME manufacturers and distributors will motivate cost-shifting, however fee schedules may mitigate those efforts. Watch for creative ways around fee schedules and ‘upselling’.
Public opinion will help shape the outcome; recent polls suggest the public is more willing to accept some reductions rather than a wholesale overhaul of Medicare and Medicaid. That said, the health industry’s various stakeholders are already hitting the phones hard to forestall – or more likely minimize – reductions to their favorite programs.
What does this mean for you?
We’re the mouse; CMS is the elephant; keep your head up, watch out for those big feet, and be nimble. Work comp will be affected by the ultimate deficit reduction agreement; success favors the aware and the well-prepared.
