The Senate version of AHCA – What to watch for

Senate Republicans are set to release their revised American Health Care Act today – here’s what we know about their version, and what to watch for.

An excellent summary is here.

Medicaid – the biggest, most significant, and most important changes are to Medicaid.

74 million Americans are covered by Medicaid, and about 2/3rds of Medicaid funds go to elderly and disabled Americans.  Reportedly the Senate bill will:

  • eliminate Medicaid expansion funds over several years, and
  • significantly reduce future federal funding for Medicaid

As a result, more than 14 million low-income, disabled, and elderly Americans will lose coverage for nursing home care, rehabilitation, and all other healthcare services.

Individual and employer mandate

The mandate would be effectively repealed by eliminating enforcement. Today individuals and employers with more than 50 FTEs have to provide coverage or pay a penalty. Note – there has never been a requirement that employers with fewer than 50 workers provide insurance.

Insurance subsidies for lower-income Americans

The Senate version reportedly has preserved some of the current income-based subsidy provisions, unlike the House bill.

Pre-existing condition coverage

Cloudy would best describe what we know about the Senate bill’s approach to ensuring people with pre-existing conditions are covered. There just aren’t enough details, however even if pre-ex conditions must be covered, it appears insurers will be able to charge much higher premiums for those with pre-ex conditions, and/or exclude treatment for those conditions from their insurance policies.


There are mandatory benefits in ACA; these would be eliminated in the Senate version, so your insurance plan might not cover mental/behavioral health and addiction coverage, and/or coverage for different types of care such as physical therapy or hospital services. While this provision would likely reduce premiums, it reduces coverage as well.

Tax changes and the federal deficit

All ACA-related tax increases are repealed with the exception of the Cadillac tax on high-value insurance plan, a change that will substantially increase the federal deficit.

Unforeseen implications – job loss

There’s been far too little coverage of one of the most important impacts of AHCA – the loss of close to a million jobs if this is signed into law. While employment would increase over the very-near term, over the next few years it will drop as fewer people have insurance and thus can’t get care.

What does this mean for you?

Millions of Americans will lose their health insurance, smaller hospitals will close, and cost shifting will explode as providers try to stay in business.

I don’t see the bill – in it’s current form – passing. But we are close to ACA’s death than we were a few weeks ago.

Why are Senate Republicans hiding their health care bill?

OK, let’s set aside the partisanship to objectively consider that question.

Senate Republicans are writing a bill in secret that would:

  • change one-sixth of our economy,
  • cause at least 20 million Americans to lose health insurance,
  • eliminate thousands of jobs in healthcare, and 
  • significantly change the insurance many of the rest of us have.

Many Republican Senators have yet to see the bill. HHS Secretary Tom Price has not seen the bill. The President has not seen the bill. The Wall Street Journal is upset with the process. The Conservative Review reports Orrin Hatch (UT), the second-highest ranking Republican Senator hasn’t seen the bill.

Senate Majority Leader McConnell has crafted a process to repeal-and-replace ACA that:

  • eliminates Senate requirements for debate,
  • doesn’t allow members of his own party or any Senate committee to review the bill before it hits the floor, and
  • avoids an accurate assessment by the Congressional Budget Office.

When ACA was passed back in 2009, there was:

  • 25 days of open public debate on the floor of the Senate
  • 13 days of open committee hearings
  • consideration of hundreds of amendments
  • months of meetings of the Gang of Six – three Republican and three Democratic Senators

Then-Minority Leader McConnell had this to say about ACA’s passage in 2009:

“This massive piece of legislation that seeks to restructure one-sixth of our economy is being written behind closed doors, without input from anyone, in an effort to jam it past not only the Senate but the American people…”

What does this mean for you?

Are you OK with this?

Concentra’s telemedicine move – part 2

Here’s the rest of my interview with Keith Newton, Concentra CEO.  Part 1 is here.

MCM – How has the market reacted to the launch of telemedicine?

Newton – Early adopters are coming on board; like other new services in work comp, everyone wants it then there’s a bit of a lag after initial launch [as the more cautious wait to see what happens]. Most of big players – TPAs and insurers – are [looking at or considering] coming on board. It is much easier to adopt [internet-based medical “visits”] if it is as familiar as possible to all users. Adoption will be faster if there’s less disruption to the normal medical process.

MCM – How will Concentra charge for this service?

Newton – There will be no change to reimbursement, it is based on normal fees for office visits. Payers will see savings in efficiency and time savings for employer. [There may be] Other savings from lower ancillary costs from lower utilization.

MCM – Talk about licensure and regulatory compliance. There’s a lot of movement towards telemedicine in many states, and it seems a lot of confusion about what is allowed, what entity regulates TM, fees, etc.

Newton – There have been some licensure and certification challenges, we have 5 coordinators doing intake for 4 full-time MDs dedicated to this to begin; 2 in CA, 1 in MD, 1 in NV. One example is we have a Maryland physician driving to one of our Washington DC centers to do their Telemedicine work from there…[we’ve done] lots of regulatory compliance work.

State regulations aren’t keeping up with changes in telemedicine. We evaluated this on a state by state basis, every legislative branch has something going on with telemedicine.

MCM – Is this partially a defensive strategy to protect Concentra’s occ medicine business?

Newton – We’ve got to protect our turf a little bit…there could be some cannibalization of own practice, but ultimately we know 1 of 8 workers will access a Concentra practice for injury care – and telemedicine will enable us to add more of those visits without bricks and mortars expansion and the expense of that.

Our goal by the end of the year is 320+ centers and 100 dedicated worksites.

What does this mean for you?

I expect telemedicine is going to be the next big thing – and unlike a lot of the other fads we’ve seen in comp, it will have a major disruptive effect.




Concentra’s major move into telemedicine

The largest occupational medicine company in the nation is jumping into telemedicine.

CEO Keith Newton and I spoke last week about Concentra’s rollout of its telemedicine program, following up on our in-depth discussion a month ago about the company’s plans and strategy.

The first patient interactions began a couple weeks ago with a limited rollout, and so far, patient reaction has been quite positive.  According to Newton, one of the first patients said “I love it so much I’m going to tell all my coworkers about it”.

Concentra is employing third-party technology vendor American Well’s web application to allow patients to “visit” Concentra’s physicians via the internet.

Here’s part one of our conversation.

MCM – What is Concentra’s approach to telemedicine today?

Newton – Our initial approach is to use telemedicine for [some] injury care and follow up rechecks with existing patients.  We have identified specific types of cases where [we will employ] telemedicine initially. Patients will be triaged 24/7 to an injury coordinator, then to an MD for secondary triage, then care [if appropriate via telemedicine]. We are also going to do PT and specialist care. There are a number of considerations including onsite staffing, load balancing, and reducing patient wait times. 20% or so of patients could be seen via telemedicine…California is our first state, we are initially doing visits from 7am – 11 pm; we’ll will add longer hours and multiple states over time.

MCM – Describe the technology you are using.

Newton -We met with 10-15 technology companies working in telemedicine to learn as much as possible. We are using American Well for the connection only, all back-end applications are internal Concentra applications so we access their technology…it is not an integration but using their tech for the “visit” and using Concentra’s Allscripts and Occusource internal applications for documentation [and other functions].

MCM – How are telemedicine interactions different from office visits?

Newton – You need the right intake coordinators and physicians. In a bricks and mortar setting [normal live office visit] there is lots of activity going on in the clinic. When you are on video it is just you and the patient, the doctors have to engage and show focus on the patient, connect with them one-on-one, maintain eye contact.That puts the patient at ease. This may make for better and stronger patient – physician relations and connections via telemedicine. It could also make in-person visits more productive and satisfying for patients and providers as they adopt that behavior for live encounters as well.


MCM – Tell me about the process Concentra used to prepare to see patients via telemedicine.

Newton – Internally we did about a hundred “mock visits” to make it as seamless as possible to make sure patient experience was made as successful as possible. [We] used internal staff as testers to provide feedback, improve the process and service. There will be continuing evolution; there are new tools arriving every day, some of which may be useful for incorporation into the telemedicine process. Things will look different in a few months – for now, we are looking to make it as simple as possible for any stakeholder – the payer employer or patient.

Tomorrow we’ll get into more details…

What does this mean for you?

Telemedicine is going to be highly disruptive to care delivery models, and has broad implications for all stakeholders. 


Acquisitions in Work Comp – what’s (not) happening today and why

After a seemingly-unending flood of deals that stretched for several years, mergers and acquisition activity in the work comp services sector slowed a lot last year.

There was a brief flurry of activity after the election, a flurry that – with some exceptions – seems to have come to an end.

What’s going on?

Several things.

First, the workers’ comp industry is mature; service sectors have consolidated and there just isn’t a lot of “organic” growth – growth driven by an expanding industry. Software, artificial intelligence, drones – these are rapidly growing industries, where investors see opportunities for investments to generate huge returns.

That’s not to say there aren’t work comp companies growing by taking share from competitors, acquiring other companies, and expanding their service lines. Genex is one example; the company is buying up competitors and diversifying within a fairly narrow service sector.

Second, there are far fewer companies to acquire.  One example is the PBM (pharmacy benefit management) industry has really consolidated of late, with Optum and Express Scripts now the dominant companies in what used to be a highly fragmented industry. 13 years ago when CompPharma started there were perhaps a dozen PBMs with appreciable market share. Today, there are less than half that number.

The same has happened in bill review, utilization review, specialty services, and every other sector.

External factors not directly related to workers’ comp are also at work; perhaps none more important than the mindset of powerful people.

While CEOs are enthusiastic about potential business growth, their Boards are much more cautious.  Overall, US M&A activity came to a screeching halt after the election, dropping 40% since the peak in 2013. This is significant because corporate boards are populated by investors, bankers, former CEOs, and other luminaries tasked with the long-term success of their company, not short term headline-grabbing deals.

There are a couple of recent transactions in our space that make a lot of sense – PBM Express Scripts’ purchase of myMatrixx is one example. MItchell has been buying up smaller PBMs and other companies as it continues to pursue a sale of the company.  And investors are continuing to look for potential acquisitions; I hear from private equity firms looking for the next breakout service provider pretty much every week.

Countering the caution are a couple drivers that may not be as apparent to the casual observer.

There is a shipload of private equity money looking for deals, and PE firms need to use that money to buy companies. European funds are at an eight-year high and we aren’t far behind on this side of the pond.

Interest rates are still low; while they’ve trended up of late, compared to historical averages money is still cheap.

What’s the net?

Expect smaller deals to keep happening, but there’s much less enthusiasm for the mega-deals in workers’ comp services.

A return to the dark ages?

No OSHA administrator.

Rollback of regulations on exposure limits for beryllium and silica.

Eliminating the Chemical Safety Board.

These are just three examples of the Trump Administration’s apparent move to de-emphasize worker safety, and appear to be a harbinger of things to come. There’s no question the current regime is focused on business’ interests; what’s troubling is there appears to be no recognition that worker safety IS good business.

As a frequent and scathing critic of some of ProPublica’s past mis-reporting on workers’ comp, I do have to acknowledge they have done good work reporting on individual companies abusing workers, particularly undocumented immigrants. However, the ProPublicas of the world have been mostly silent on these alarming changes at the Federal level. These self-appointed watchdogs made hay two years ago using distortions and anecdote to pillory an entire industry; I would suggest that their reporting expertise would be well-employed if it focused on the potential long-term impact of the Trump Administration’s rollback in worker safety.

As a side note, WCRI’s just-published report on wage replacement for long term injured workers in Michigan brings some much-needed perspective to this key issue. If the feds are going to roll back safety enforcement, the burden is going to fall on individual states. That will require resources that many state legislators will be loathe to find in these days of tax revolts.

What does this mean for you?

Don’t buy cheap chicken.

The real fraud in workers’ comp

Is not the occasional worker cashing checks s/he shouldn’t, or bowling while fully disabled, or double dipping.  No, it’s:

  • employers going without insurance coverage so workers and taxpayers foot the bill,
  • providers scamming the system to make millions, and
  • a relative few applicant attorneys and their schemes to defraud employers and taxpayers.

Today’s WorkCompCentral has a terrific piece by Greg Jones highlighting this last scam. Jones has dug deep into “capping”, a California scheme to recruit allegedly injured workers for attorneys and their physician “partners”.  These fraudsters may have single-handedly generated hundreds of repetitive trauma cases in the LA County area…CWCI’s done masterful reporting on this issue, finding “a strong association between attorney involvement and regional variation in the Los Angeles Basin and the high cost of CT claims.”

Then there’s the incredibly creative providers that make millions from:

  • dispensing drugs to patients;
  • doing drug “tests” using their inhouse machines;
  • unholy alliances with compounding “pharmacies” or
  • compounding drugs in their own offices.

A new scam was also reported in this am’s WCC; a Florida doc (why is it always Florida and LA County?!) allegedly used telemedicine “visits” to prescribe compounds to work comp claimants.

These bad actors suck money out of taxpayers and employers and do NOTHING to help work comp patients.

Blood boiling yet? Well, it’s about to vaporize.

Bad as that is, the real fraud is employer misclassification and related schemes.

A seminal study indicates ten to twenty percent of employers misclassify workers as independent contractors.

As the gig economy expands, this is going to get worse – much worse. From the Economic Policy Institute:

  • Atlanta stagehands for concerts produced by Live Nation, a company listed on the New York Stock Exchange that has held shows for such artists as Maroon 5 and Billy Joel, have been misclassified as ICs by a staffing provider (Vail 2015; DePillis 2015).
  • An estimated one-third of construction workers in Southern states such as North Carolina and Texas have been misclassified (Ordonez and Locke 2014a). [emphasis added]
  • And roughly 20,000 employees of CrowdFlower Inc., a San Francisco–based startup that breaks down digital jobs such as data entry, are misclassified, alleges a case now moving through the courts (Weber and Silverman 2015)

This is particularly problematic in construction, but it isn’t limited to southern states. Payroll fraud cases have been reported in Massachusetts, Washington, and many other states.

Yet you wouldn’t know from the press – and press releases from insurers – that payroll fraud and other schemes are the real problem dwarfing the individual worker fraud problem.

That’s just too bad disappointing awful.

I’d encourage real journalists to concentrate a lot more on the real problem – employer fraud – and avoid the clickbait nickel-and-dime “fraud” allegedly perpetrated by individuals.

What does this mean for you?

Work comp insurers, the ones that are really screwing you are employers. Get with it.


Opioids are the largest killer of people under 50

62,000 moms, dads, kids, friends, uncles, aunts died from drug overdoses last year.

Thank you, opioid manufacturers.

Let’s be very clear – this would not be happening if the “legitimate” pill pushers hadn’t co-opted, bribed, lied, and sleazed, funded fake patient advocacy groups, paid hundreds of millions to lobbyists, all in the name of profit.

This is going to get a lot worse – and there is NO indication it’s going to get better.

Drug overdose deaths are skyrocketing in Maryland, Pennsylvania, Maine, and Florida. Researchers estimate Ohio’s death rate jumped by 25% last year.

The drugs users are taking are so powerful that Narcan – the “get out of jail free” injectable antidote – is becoming increasingly impotent. “E.M.S. crews are hitting them with 12, 13, 14 hits of Narcan with no effect,” said Mr. Burke, likening a shot of Narcan to “a squirt gun in a house fire.” (NYTimes)

More than two million of us are addicted, and over a quarter of us used prescription painkillers last year. That’s more than used tobacco.

States are suing opioid manufacturers in an attempt to recoup some of the billions of dollars this disaster is costing taxpayers, as well they should. But those efforts are happening at the same time the FDA is approving new “abuse deterrent” opioids.  FDA Commissioner Scott Gottlieb is focusing on opioids, which is a very good thing. And truth be told, today’s FDA has pretty limited ability to address the problem, in large part because drug manufacturers are going to make damn sure the FDA’s powers stay limited.

Over the last decade, opioid manufacturers spent close to a billion dollars on campaign contributions and lobbying against state laws limiting opioid prescribing. That’s eight times more than the NRA and the gun lobby.

Sounds like a lot of money, right?

Nope – according to Business Insider, in 2015 alone, Purdue, the manufacturer of Oxycontin, made $2.4 billion from opioid sales.

You may recall Oxycontin was marketed as “abuse deterrent”; Purdue told Business Insider last year “We support policies that align with the FDA and The White House’s view that opioids with abuse-deterrent properties are a public health priority.”

They are certainly a profit priority.

What does this mean for you?

You know someone who’s died, a family destroyed, lives ruined by opioids. There are more coming.





The ignorance of arrogance

“If we didn’t come up with the idea, it isn’t worth considering.”

“That can’t be a good idea, we didn’t think of it.”

“Why would we listen to anyone from outside our company; we’re the biggest/best/most experienced/industry leader.”

Those are just three of the statements I’ve heard from large work comp insurers over the last two decades – all  from insurers who’ve fallen far from their glory days of market dominance. They may seem ignorant, or dumb, or even kind of funny – but they were real.

Sitting comfortably in leather chairs behind their nice desks, the men who made these statements were completely secure in their belief that their company, their way of doing things, their mindset and culture were completely infallible.

How wrong they were. As easy as it is for us to see that now is how impossible it was for them to see reality then. 

The next five years are going to bring profound changes to workers’ compensation, changes which – by definition – will make many of today’s business practices obsolete. It isn’t hyperbole to say that unless you completely revamp the processes, systems, technology applications, and metrics you use today, you’re toast tomorrow.

We are seeing that with Liberty’s progressive de-emphasis of workers’ comp. With the increasing outsourcing of claims functions to TPAs. With the rapid growth of what were relatively small players just a few years ago.

And that’s just the beginning.

All these changes have been driven by lower work comp claims frequency – that’s not new news to anyone. But hidden behind this is another major driver – the continued inability of major insurers to understand the business they are in.

Work comp insurers are in the business of managing medical and disability. While many think that’s what they are doing, they aren’t. Their claims management approach, predicated on the disproven model of huge provider networks delivering discounted care and the medical model of disability, overseen by overworked and under-resourced claims adjusters reporting to executives steeped in claims who don’t understand medical issues at all, only seems to work as long as premiums stay high and frequency continues to decline.

Wrenching changes are coming to employment, job availability, workplace demographics, trade and safety nets, changes that the industry is completely unprepared for.

Not to worry; the powers-that-be will schedule meetings, draft memos, write white papers, and do re-org planning, most of which will be completely ineffective, except insofar as it makes the execs feel like they are doing something. They’ll get rid of managed care departments, expertise, programs because “those programs haven’t worked.”

Of course they haven’t, because they were either the wrong programs to start with (percentage of savings network models) or the execs didn’t force adoption of intelligent medical management on a recalcitrant claims culture.

I see this happening all around the industry, and it’s like watching Antarctica melt. By the time these worthies figure out it’s real, they’ll be floating towards the tropics on a rapidly-melting iceberg.

With no landfall in sight.