Month: August 2013

Aug
14

Survey – Opioids and Workers’ Compensation

Posted by Joe Paduda on Wednesday, August 14th, 2013 | Comments

It is NO secret that opioids are an issue for the workers’ compensation industry – the cost of the average lost-time claim with long acting opioids 900% higher than those without.

What is a secret is why there’s a picture of an iPad Mini here (see last paragraph for details)…

iPad_mini_MQ

We do know (thanks to a story published in The New York Times’ June 22, 2013 entitled “The Soaring Cost Of the Opioid Economy,”) the stronger the opioid, the higher the expense of the claim as:

  • the average cost of claims without opioids is $13,000;
  • the average cost with a short-acting opioid e.g. Percocet is $39,000 (300% of avg.);
  • the average cost with a long-acting opioid e.g. OxyContin is $117,000 (900% of avg.); and,
  • between 2001 and 2008, narcotics prescriptions as a share of all drugs used to treat workplace injuries jumped 63 percent, according to insurance industry data.

The claims cost while enormous seems small in comparison to the human toll that opioids are taking on families and friends. Opioids are highly addictive and are robbing users of their lives as they knew them and by taking them:

·      U.S. EMERGENCY ROOM COSTS Cases in which an opioid other than heroin was cited as a reason for an emergency-room treatment in 2004 – 299,498 and in 2011 – 885,348 (almost a 300% increase).

·      OVERDOSE DEATHS Where prescription opioids were involved in 1999 – 4,030 and in 2010 – 16,651 (over a 400% increase).

·      DRUGS FOR OPIOID ADDICTION The number of prescriptions dispensed for two drugs increasingly given to treat opioid addiction — buprenorphine and naltrexone — has soared along with opioid use from almost zero in 2002 to 8 million prescriptions in 2012.

·      PATIENTS IN ADDICTION TREATMENT Number of patients in a one-day survey at facilities that use methadone or buprenorphine to treat addiction to pain pills or heroin has risen from 228,140 in 2002 to 313,460 in 2011. (Does not include all patients treated at doctors’ offices.)

What we don’t know is payers’ perceptions, programs, and results.  To that end, we are conducting an online Survey of Opioids and Workers’ Compensation; seeking information about what payers think and are doing about opioids; how opioids are affecting loss costs, claims handling, and claim closure; what management programs are working and what aren’t; the role of the adjuster and PBM; what role opioids should play in worker’s comp; and what the future holds.

Click here to complete the Survey

Couple details –

  • all survey respondents get a detailed copy of the Survey Report
  • one respondent will get a16Gb iPad Mini in the color of her/his choice
  • all responses are confidential
Aug
12

Quick catch-up on the events of the week

Posted by Joe Paduda on Monday, August 12th, 2013 | Comments

Hard as it is to believe, the world kept turning while MCM was on vacation, with nary a wobble to mark our hiatus.

Here’s a quick summary of things that happened while we were away…

Medicare physician reimbursement

Congress may – at long last – kill the oft-derided and pretty-much-useless Medicare physician payment update methodology knows as the Sustainable Growth Rate.  Useless because Congress overrides it on an annual basis, as SGR requires cuts in reimbursement to keep Medicare’s doc costs under control.  A bill advancing in the GOP-controlled House of Representatives seeks to replace SGR with an annual increase of 0.5%, ending in 2018 with a to-be-developed methodology based on quality and performance.

In the work comp world, almost all provider fee schedules are based – to one degree or another – on Medicare’s RBRVS. This change will directly impact reimbursement in a few states, and indirectly in all as the unforeseen consequences of price management become apparent. (An excellent source for information on state fee schedules is available from WCRI.)

The latest edition of Health Affairs has a great piece about CalPERS’ use of reference pricing to influence their members’ choice of hospitals…

in response to a fivefold variation in prices it paid on behalf of members who underwent knee and hip replacement surgery. Under this benefit design, an insurer places limits on the amount it will pay for a procedure, with employees paying the difference if they select a higher-price hospital. Based on first-year results from forty-one hospitals identified as value-based purchas- ing design facilities, surgical volumes for CalPERS members increased by 21.2 percent at low-price facilities and decreased by 34.3 percent at high-price hospitals. [emphasis added]

Gotta love the effective use of the power of information.

There is more information coming out – seemingly every day – on rates filed for the health insurance Exchanges.  Another piece in Health Affairs explores why there’s wide variation in rates in some states – and very little variation in others.  One clue – “In contrast to the 34 states where the federal government is operating the exchange as a clearinghouse that will accept all insurers who meet minimum standards, Covered California negotiated rates with each insurer with the implicit threat that the Exchange would exclude any insurer who did not come up with an acceptable rate. ” California’s rates showed the least amount of variation…

Obesity has been classified as a disease by the AMA, a change that may well impact work comp claims, claims management, costs, and therefore system costs. CWCI research found:

“average benefit payments on indemnity claims with the obesity co-morbidity were $116,437, or 81.4 percent more than those without; and that these claims averaged nearly 35 weeks of lost time, or 80% more than the average of 19 weeks for claims without the obesity co-morbidity.”

There’s a lot more brewing out there with deals-aplenty, but I’ve got to catch up on emails and calls and stuff that didn’t get done last week, so they’ll have to wait till tomorrow.

Aug
5

MCM’s on holiday

Posted by Joe Paduda on Monday, August 5th, 2013 | Comments

This week I’m on vacation in New York’s Finger Lakes – as my lovely bride has a strict “no work on vacation” policy, and I really like being married, there will be no posts on MCM this week.

Hope yours is excellent.

Aug
2

Brighter days ahead for work comp

Posted by Joe Paduda on Friday, August 2nd, 2013 | Comments

If your definition of “brighter days” is based on higher total premiums, things are looking decidedly sunny.

Factory orders are up significantly, which should lead to higher manufacturing employment.  As these jobs are typically higher risk than average, premiums will be proportionally higher as well.

Other positive indicators include a reduction in initial jobless claims and a healthy increase in private sector employment fueled by construction and trade/transportation/utilities.

If the knuckleheads on Capitol Hill could get their act together and end this stupider-than-stupid sequester, we’d see another 0.5% or more in GDP growth.  Alas, it does not look like sanity will arrive any time soon.

With rates up, employment up, and wages slightly higher, comp’s top line – revenues – will be steadily improving.  

The real issue is claims cost, and more specifically medical expense.  Anecdotal information from discussions with claims execs at several very large payers suggests growing unease about medical trend. Some may chalk that up to comp folks’ inability to ever be completely happy; I’d say they are realistic.

What does this mean for you?

With higher premiums come more dollars to invest in medical management. After hollowing out departments, cutting staff, avoiding IT investment, and counting managed care service fees as “revenue”, payers had best get back to real medical management.  

Aug
1

Lousy back pain care – it’s not just work comp

Posted by Joe Paduda on Thursday, August 1st, 2013 | Comments

What’s changed in treating back pain over the last decade?

More narcotics and fewer NSAIDs.  More referrals to specialists, less treatment by primary care docs.  More MRIs and CTs.  

A really illuminating article just published in JAMA provided those insights and more, concluding “Despite numerous published clinical guidelines, management of back pain has relied increasingly on guideline discordant care.”

Like 29% of patients prescribed narcotics.

In other words, more care, delivered by more expensive providers, with higher risks, despite no evidence it improves results.

Not only do we have a looooong way to go, it’s getting longer every day…