Think your hospital bill was high?

A hospital bill for $44 million showed up in Alex Rodriguez’ mailbox a couple weeks back.
Although Alex is a resident of New York, he’s not “the” A-Rod, but even the A-Rod who wears pinstripes to work at Yankee Stadium would have been hard-pressed to come up with the $44,000,000 ostensibly owed to Bronx Lebanon Hospital.
Of course, it turned out to be a “billing error”…but I’m probably not the only one who didn’t think the amount wasn’t theoretically possible.
After all, hospitals have been charging patients more and more for the same procedures over the years; the average charge submitted to CMS for Medicare zoomed from around $500 in 1996 to almost $2000 in 2008.
While I haven’t heard of a real bill hitting eight figures, I’m sure there’ve been some that have come close; seven figure bills are much more common than they used to be, with most of my clients getting one or more a year. Carol Gentry of HealthNews Florida reported last year that the estate of a penniless woman was billed $9.2 million by Tampa General Hospital…this case was a mess, complicated by a nasty family dispute, Medicare rules, and legal proceedings.
Here’s hoping you aren’t the first to get a “real” $44 million bill…

$3 million and counting

To date, Automated Healthcare Solutions and other companies owned by their principals have donated over $3 million to various politicians, campaigns, and political organizations. Automated Healthcare Solutions and their sister companies are heavily involved in physician dispensing to workers comp patients in Florida and other states.
The actual number is $3,224,076 since 2002, coming from dozens of companies that are affiliated with or managed by AHCS’ principals, with big dollar donations to committees backing current Senate President, MIke Haridopolous and House Speaker Dean Cannon.
Haridopolous’ and Cannon’s committees each received at least $350,000.
The research was done by the Florida Independent’s Virginia Chamlee, who details the various companies and political donations in her piece on Automated Healthcare Solutions. Chamlee’s piece is the first to provide a full picture of the political donations of AHCS’ principals Zimmerman and Glass, and the $3.2 million total shows clearly just how important Florida is to dispensing companies and their affiliates.
If you are thinking this isn’t a big deal – you aren’t thinking. Physician dispensing increases Florida workers comp premiums by 2.5%. That added cost will disappear if Senate bill 668 passes and is signed into law, but the contributions and political muscle of AHCS and their allies are making that look increasingly doubtful.
SB668 is out of one committee in the Senate, but things get tougher from here. There’s no question Sen Haridopolous has gotten an earful from those who are profiting from physician dispensing, and as the Senate’s boss, he has a lot of influence.
Now he needs to hear from those who are paying the tab.
Send Sen Haridopolous an email, copy Sen Alan Hays, the Senator who is backing the bill to limit the cost of physician dispensed drugs – not ban physician dispensing, but limit the cost to what you’d pay for the same drug at a retail pharmacy.
and send me a copy too.
Tell Sen Haridopolous:
- Florida’s employers can’t afford to enrich a select few who get most of the dollars from physician dispensing.
- If he’s serious about getting the State’s economy back on track, he’ll help employers cut their costs
- if he’s serious about helping taxpayers, he’ll stop backing physician dispensing which adds to their bills while forcing schools, police and fire departments to lay off workers to pay the inflated bills of physician dispensers.
What does this mean for you?
Time to get active, or don’t complain when SB668 is defeated and your costs go up even more.

Killing claimants.

Over the last ten years, more than two thousand claimants have died as a result of drugs received as part of their “treatment’ for their occupational injury or illness.
That’s the conclusion reached by Peter Rousmaniere in his latest column at Risk and Insurance – and if anything, his estimate is on the low side. This isn’t a criticism, as it is evident Peter is doing his best to avoid sensationalizing an issue that needs no exaggeration.
Peter bases his estimate on several different data sources, including a just-published article authored by Gary Franklin, MD, Medical Director of Washington’s state workers comp fund. By my calculation, both Peter and Dr Franklin’s estimates seem low.
A back-of-the-envelope calculation arrives at this figure – there were about 1750 narcotic-related workers comp deaths across the country in 2009 alone.
I base that figure on two data points.
1. Washington’s research – about 35 claimant deaths in 2009 appeared narcotics-related.
2. Washington has about 2 percent of the nation’s population.
Washington State has addressed the issue, and their solution has had a remarkable impact. This from the article by Franklin et al:
“By the third quarter 2009, there was a substantial decline in the mean daily long-acting opioid prescription dose among workers’ compensation claimants in WA, followed by a dramatic fall in unintentional poisoning deaths related to prescription opioids in this population in 2010.”
That’s one state out of fifty.
What does this mean for you?
Do NOT wait for your state officials to take action.
Identify claimants at high risk for addiction. Screen them and get them into treatment.
Identify doctors prescribing more than 120 morphine equivalents per day to claimants. Find out why, and if appropriate, take immediate steps to stop sending claimants to them.

Physician dispensing in Florida – Can money buy bad policy?

One of the most powerful firms in the physician dispensing business is sending hundreds of thousands of dollars to elected officials in Florida. [sub req] The donations, to individual politicians and their affiliated organizations, come as the Florida Senate is considering a bill that would limit reimbursement of physician-dispensed drugs to the cost of the underlying (non-repackaged) drug.
This morning Mike Whitely of WorkCompCentral reported Automated Healthcare Solutions “gave more than $32,500 to Florida state lawmakers and more than $500,000 to committees associated with conservative causes and candidates in 2011…”, most of it in the last three months of 2011.
The timing is fortuitous, as Senate bill 668 was moving thru the legislative process last quarter, and is the subject of intense debate. Suffice it to say that passage of SB 688 would greatly reduce the income of companies in the physician dispensing/drug repackaging sector.
The physician dispensing bill made it out of one Senate Committee last week, albeit with a poorly-written and ill-advised amendment.
Writing in HealthNews Florida, Carol Gentry reported: “SB 668 survived its first committee in a 7 to 4 vote. But some senators who voted in favor said they may change their minds if answers to their questions aren’t forthcoming by the time it gets to the Senate floor.”
It’s unknown if the flood of cash from AHCS will affect the votes of key Senators, or cause beneficiaries to use parliamentary procedures to block the bill. The forces allied in support of the bill include the Chamber of Commerce, most of the workers comp insurers, and many employers.
And, in an interview with Whitely, a spokesperson for AHCS said the company is not focusing on the issue, saying their donations are “not a means of affecting public policy”.
Really. That’s what she said. Evidently AHCS’ half-million bucks – donated to key legislators with power over SB 688 – is not related to physician dispensing.
That being the case, I’m sure Florida’s elected legislators will do the right thing, pass the bill, and thereby reduce Florida employers’ work comp premiums by tens of millions of dollars.
What does this mean for you?
Yet another opportunity to watch the ugly, money-driven process that is politics at its worst.

Genex is for sale

Looks like the rumors are based in fact; case management/bill review vendor Genex is up for sale.
The “official” news came yesterday (thanks to a good friend for the tip); “The Wayne, Pennsylvania-based company has EBITDA of USD 40m, the source and the first industry banker said. Bank of America has been mandated for the sale process, according to the source familiar. The sale process is in the early stages, with no first round bid deadline yet set, a third industry banker said.”
With top line revenues estimated at $390-$400 million, it’s not a terrifically profitable entity, but then case management is not known as a big cash generator. They’ve made a couple acquisitions lately, with Intracorp by far the largest.
Looks like Genex’ owner, Stone Point Capital, may be entering the divesting phase. Recall SPC also has ownership in Sedgwick and Stone River/Progressive Medical, although the latter property was only recently acquired. As CIGNA is also an owner, they could be pressuring Stone Point to sell Genex; pretty much every health plan is looking for capital to invest in preparing for 2014, and CIGNA would get a chunk of cash from a sale.
Timing is good – valuations are up, there’s lots of activity and interest, and a couple of big-money folks are looking for roll-up and industry integration opportunities. Genex would be a pretty interesting cornerstone for such a venture.
What does this mean for you?
Hold on to that hat – this isn’t going to be the last big deal we’ll see this winter.

Copperfield Research’s CorVel hatchet job

A couple days ago a shadowy equity “research” outfit that goes by the name Copperfield Research published what can only be described as a hatchet job, with CorVel the target.
I’m no fan of CorVel - their business model makes little sense, their pricing model for bill review/networks/ancillary savings appears designed to maximize their revenue, the quality of their services varies widely, and I’ve been generally unimpressed with their customer service and value proposition.
I’m even less enamored of the “research” and “analysis” done by Copperfield. This isn’t a well-known research firm or trading outfit, I couldn’t find anything definitive about Copperfield, what their business is, who works there, and why they publish “research”. Others speculate Copperfield is the product of an individual engaged in short selling; making money when a stock price drops. I have no idea if that’s the case, but that would help explain the CorVel research paper.
Whoever wrote the hatchet job quoted me extensively; that’s why I find it necessary to speak out.
It is quite clear that Copperfield knows next to nothing about CorVel’s workers comp business, or the work comp world in general, for that matter. Here are a few specific issues I have with their “report”.
Copperfield cites the 2005 Broward County audit as an example of CorVel’s problems – folks, that was seven years ago. Why did Copperfield resurrect that story? How does this support his claim that “Corvel operates in the gray area of legal and business practices?”
Copperfield raises the Silent PPO issue; CorVel’s PPO, like every other PPO, probably has serious data issues and may publish inaccurate provider manuals as well. This isn’t evidence of intentional fraud; as anyone who’s ever been in the network business knows, the directory is obsolete the instant its published.
CorVel’s bill review and related operation is cited as another example of possible malfeasance. Again, disagreement between bill repricers and providers is not exactly new news, and disagreements don’t mean there’s intentional fraud.
Copperfield can’t understand how a work comp services company can grow while frequency declines. Boy, talk about a guy without a clue about comp. Severity is up, Copperfield, medical complexity is up, and many other services companies have also grown over the last decade – despite declines in frequency. Perhaps Copperfield’s extensive research staff didn’t find Sedgwick, MedRisk, PMSI, MSC, Express Scripts, Align Networks, York Claims, MHayes or any of the dozens of other companies, that have grown quite nicely over the last ten years.
He says “CorVel is paid based on the number of claims it manages and is often paid a percentage of the client’s savings…” Well, not exactly. CorVel gets paid in a variety of ways for a variety of services; Copperfield’s failure to delineate these various services and describe the associated pricing mechanisms shows a lack of attention to detail, or perhaps eagerness to avoid talking about issues that don’t support his assertions.
Moreover, Copperfield’s complete lack of professionalism is evident in his assertion that somehow CorVel’s percentage of savings model is an outlier, unique and different. We all know that’s far from reality. While I have voiced my objections to the model, the fact is it’s all too common.
He also says no analysts are following the company – not true. There are any number of research reports on Corvel
Okay, those are the highlights. Now let me get snarky.
This guy just flat out can’t write, yet he thinks he can. Here are a couple examples.
Discussing the Broward audit, he says it “succinctly details” information. Huh? That’s an oxymoron, and a wrong one at that – the report has 211 pages…
Copperfield likens himself to perhaps the most attractive exposer of corporate malfeasance in recent history, saying “we feel a certain kinship to the Erin Brockovich’s [sic] of the world…” I have no idea if Copperfield is the male equivalent but he certainly doesn’t know the difference between the possessive and the plural.
In discussing the results of his(?) extensive research, Copperfield says “we have uncovered some alarming finding.[sic] There’s that damn plural again…
If you really want a hoot, read his description of the work comp claims process on page 5. It is (unintentionally) hysterically wrong.
Finally, this knucklehead says “According to Joseph Paduda [that's me]…nurse case management is a low-margin.” I know, I know, he just forgot to add “business.” That’s not acceptable for two reasons. One, if you’re going to paraphrase or quote someone, get it right. Two, it shows a lack of attention to detail, an absence of care and thoroughness that may well extend beyond his inability to write.
What does this mean for you?
If Copperfield is selling short, he’s already done well. And if you’re reading his stuff and acting on it, good luck
.

MCM’s position on SOPA and PIPA

I don’t like these bills, and neither should you.
First, my perspective.
I’m a content provider and a copyright holder. I don’t want anyone else taking my intellectual property without permission and/or compensation. This isn’t just about MCM; I’ve also written a book (The Art of Sculling) that has been in print for twenty years, and while the revenue from that book is tiny, it is payment for my work and no one should be able to access that work without paying for it.
I get the movie producers’, actors’, artists, and musicians’ perspective and agree with it.
The two bills currently before Congress are waaaaay too overreaching – sure they solve the problem of internet piracy. So would shutting down the internet. While SOPA/PIPA don’t go that far, they do make innocent parties suffer for the acts of others.
Here’s how this could affect me – and you, loyal reader.
Say someone posts a comment with a link to a copyrighted video, image, document, song; and the Feds get a complaint. Under SOPA/PIPA, they could legally shut down MCM immediately, and I’d have to spend tons of time and energy dealing with the issue before I could get MCM back up and running. That would harm me, and end your ability to access MCM.
Bob Wilson provides more insight:
“First, the government would have been able to force search engines to “delist” any website they suspected of these activities. The second would be to require ISP’s (Internet Service Providers) to disable “Domain Name Service” to the suspected sites. The DNS service is essentially what allows the “domain name” that you are familiar with to work.”
I get the intellectual property argument – I absolutely get it. But SOPA/PIPA are a heavy-handed, highly punitive, and poorly designed solution that would cause far more damage than necessary.
Sign the SOPA/PIPA petition, and let’s stop this idiocy.

Physician dispensed drug costs – progress in Florida!

Earlier this year, I predicted Florida would pass a bill limiting reimbursement for physician dispensed drugs. This morning, we made some significant progress.
Spent a good chunk of the morning watching the Florida Senate hearing on Sen Hays’ bill that would peg reimbursement for physician dispensed drugs at what a retail pharmacy would charge for the same drug.
Automated Healthcare Services’ lobbyist Tom Panza was up to speak in opposition. A passionate advocate for his client, Panza’s speech was notable for its energy if not for its accuracy.
He conflated drug costs, saying that repackaged/physician dispensed drugs average price of $137 is the same as the average pharmacy price of $120. What Panza didn’t say, and none of the Senators asked about, is drug mix. Physician dispensers almost exclusively dispense generics, which are much cheaper – on a per script basis – than brand drugs. And retail chains sell brands and generics – brands cost over $200 per script. Thus, Panza’s claim that physician dispensed drugs only cost $17 more on average than retail was misleading and false on its face; in fact WCRI’s recent report on pharmacy in Florida notes: “physicians were paid 35-60 percent more than pharmacies for the same prescription.”
Panza also trotted out the hoary old chestnut that physician dispensing increases compliance, citing the statistic that 30% of scripts aren’t filled – ignoring that this figure is a) dated; b) addresses group health and not work comp; and c) the main reason people don’t fill their group health scripts is cost. And as we all know, comp claimants don’t pay anything for drugs.
Panza also stated that physician dispensed drugs reduced litigation and increased patient satisfaction, without citing any data or research to support that assertion. Gotta respect his passion, even if his logic and supporting data (of which there was almost none) was suspect at best.
Lori Lovgren came up after Panza, and debunked his claim that prices were the same for physician and pharmacy prices. Sen Bennett was somehow confused about her response, or perhaps more accurately Bennett didn’t like what he heard. Bennett’s been vocal about his support for the egregious over-billing for drugs by physician dispensers. Sen Negron, another physician dispensing supporter, asked some unsubtle questions asking if insurers had any ownership of pharmacies or PBMs, which Lovgren did not answer – the answer, of course, is no.
While Lovgren was, or course, accurate, she wasn’t a particularly effective speaker, and failed twice to make key points refuting Panza’s claims. It’s one thing to have the right information, but it’s a whole different thing to present that information cogently and effectively.
Several other Senators seemed to focus on narcotics, and wanted to know if the pill mill bill had changed the financial picture, making NCCI’s cost figures irrelevant. Lovgren responded that no, there was no significant impact on cost, but that didn’t seem to bear much weight
A number of potential speakers from all manner of employer, taxpayer, and payer advocacy organizations waived their chance to speak but voiced support for Sen. Hays’ bill (restricting overcharging for physician dispensed medications).
A physician advocated for physician dispensing said he couldn’t dispense at the costs set by the Hays bill as he has to hire additional staff and buy software etc and therefore the bill killed physician dispensing
David Deitz, MD spoke directly to the physicians’ claims that physician dispensing increases compliance, noting there are no studies supporting that claim. He also noted that Liberty Mutual does not oppose physician dispensing but rather repackaging. Another Senator cut off Dr Deitz, and the Committee did not allow any of the other dozens of supporters to speak. That’s too bad, as Dr Deitz knows this subject very well.
There was some very brief discussion, but the bill passed out of Committee by a substantial margin
This is a big step, a critically important one, but only a step. There’s much to be done to get this bill passed by the Senate and signed into law.

We’ll keep you posted.
Thanks to Carol Gentry of HealthNews Florida for the head’s up.

I shoulda warned you, Bob…

Colleague Bob Wilson of WorkersCompensation.com has been delving deeply into the disaster that is North Dakota “justice”, at least justice as applied in the Sandy Blunt case.
Bob’s efforts have uncovered some amazing stuff…
For instance, the same state that spent hundreds of thousands of dollars prosecuting Sandy Blunt for giving a few thousand dollars of incentive presents such as balloons and chocolate chip cookies and five dollar (five dollar!!) gift cards to employees also used a Predator drone to nail some farmers for keeping six of a neighbor’s cows on their property.
Yep, that’s a $154 million aircraft used to get $6000 worth of beef.
There’s a new definition of RoI; it’s no longer “return on investment” but Reminder of Idiocy.
Alas, some of the good bad folks of NoDak don’t see that as a problem, instead choosing to hurl imprecations (for you NoDak Sandy-Haters that means “say nasty things”) at Bob for his ignorance and temerity (again, for NDSHers, that means “unmitigated gall”; oops, that won’t work…how about “excessive boldness”?).
Net is, they’ve been pretty awful, and not very articulately awful at that. Lots of “oh yeahs?” and “yo mama” type stuff, so much so that Bob had to shut down comments before the offenders sprained their brains tying to decipher his multisyllabic retorts.
But Bob says it better than I can. Go read his “People’s Republic of North Dakota” piece and see for your own self.
And don’t forget to sign up for the Friends of Sandy Blunt afterwards…
(Now before all the GOOD folks of NoDak pillory me, I know you’re out there, admire you immensely for standing by Sandy, and appreciate your support for the guy. I’m also sorry you have to live on the same planet with those jerks)