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WCRI’s CompScope – quick takeaways

WCRI’s latest CompScope reports are out – there’s a megaton of info in the 16 state reports (I certainly have NOT read them all), but here’s what I’ve gleaned from an initial review of the reports on several large states.

Reforms often have unintended consequences – primarily increasing, rather than decreasing, medical costs.  Providers and their helpers find ways around the regs or actually use them to generate more profit, and there are a plethora of examples:

    • CA physician dispensing of drugs not on Medi-Cal fee schedule – when the drug fee schedule change drastically reduced payments for drugs, the loophole the dispensing profiteers drove thru was this; if the drug was not listed by Medi-Cal, then it was paid under the old AWP-based fee schedule.  Voila, a huge opportunity for selling repackaged drugs thru dispensing docs;
    • CA cost of compounded drugs went up after fee schedule was imposed, something predicted by several experts, yet ignored by the politicians searching for a quick and easy fix.  They got their quick and easy, but didn’t get a fix.
    • FL outpatient facility costs went up after the change to fee schedule from 75% of billed charges to 60%.  Anyone could have predicted this; all hospitals have to do is increase their billed charges, which, shockingly, they did.

Reform changes that appear to have the most real impact on costs are typically adopting an RBRVS or MS-DRG based fee schedule and adopting binding UR and strong clinical guidelines.  Ideally, both. This addresses the price and utilization issues at the same time, making it harder (not impossible, but harder) for providers seeking to game the system to succeed.

What does this mean for you?

Good reform can be effective. Bad reform is often very counter-productive – and there’s a lot of bad reform.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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