Month: July 2016

Jul
12

Purdue Knew.

Posted by Joe Paduda on Tuesday, July 12th, 2016 | Comments

According to an LATimes article, Purdue pharma knew about rampant diversion of Oxycontin for years, and never informed the DEA.  Instead, the giant, family-owned pharmaceutical manufacturer continued supplying huge quantities of its most powerful version of Oxy to pharmacies, racking up $31 billion in revenues in the process.

Sure, Purdue eventually informed officials – years after “the clinic was out of business and its leaders indicted.”

In the interim, just one physician, in one clinic, in just the first few months it was operational, prescribed 73,000 80 mg pills.

This from the LATimes:

A sales manager went to check out the clinic and the company launched an investigation. It eventually concluded that Lake Medical [the clinic] was working with a corrupt pharmacy in Huntington Park to obtain large quantities of OxyContin.

“Shouldn’t the DEA be contacted about this?” the sales manager, Michele Ringler, told company officials in a 2009 email. Later that evening, she added, “I feel very certain this is an organized drug ring…”

Purdue did not shut off the supply of highly addictive OxyContin and did not tell authorities what it knew about Lake Medical until several years later when the clinic was out of business and its leaders indicted.

By that time, 1.1 million pills had spilled into the hands of Armenian mobsters, the Crips gang and other criminals. [emphasis added]

LATimes reporters Harriet Ryan, Lisa Girion, and Scott Glover have done a remarkable job chronicling the devastation wrought by the flood of Oxycontin into California, a flood that spread pills across the country and directly contributed to the 194,000 deaths from opioid painkillers since 1999.

According to the article, Purdue knew about this activity, delayed reporting it to officials for years, and kept supplying tens of thousands of these horribly addictive pills to pharmacies Purdue’s own representative was “very certain” involved an organized drug ring.

194,000 dead Americans.  $31 billion in revenues.  Millions of shattered families. A company owned by one of the richest families in America, a fortune built on creative ways to generate scripts – and on addiction and diversion.

Sometimes what passes for legitimate business in America horrifies me.

Where’s the class-action law suit?

Jul
8

Friday catch-up

Posted by Joe Paduda on Friday, July 8th, 2016 | Comments

A short but busy week; here’s a few “highlights”

Jobs!

Big jump in hiring – 287,000 new jobs last month. Even better, the jobless rate has stayed below 5 percent for the last nine months, AND hourly wages increased albeit by a marginal amount AND there are still 5.8 million unfilled jobs as of April.  Here’s one expert’s read:

“This report should ease any fears that a persistent slowdown or recession is coming soon in the U.S.,” said Dean Maki, chief economist at Point72 Asset Management. “The service sector is where the real strength is, with 256,000 hires, but the gains were widespread across sectors.”

But…real median household income is still below where it was ten years ago.

Off-label prescribing run wild

Fentanyl – now infamous for having killed Prince – is the subject of a devastating piece in the NYT detailing the arrest of two pharma marketers for allegedly “financially incentivizing” docs to prescribe Subsys, a fentanyl spray intended for breakthrough cancer pain.  According to Katie Thomas’ article, only 1 percent of Subsys scripts were from oncologists.

Suggestion – ask your PBM to tell you how many Subsys scripts you paid for, and what practitioners were writing them.  NDC codes here.  Thanks to Brian Grant MD of MCN for this one

How the pharma world works

From Drug Channels comes this easy-to-read flow chart showing the drug and dollar flows in the pharmacy market.  Boss Adam Fein is a must-follow for those interested in this business.

Hat Tip to WorkCompWire for the head’s up on the news that Minnesota’s Department of Labor and Industry just published their 2014 system report. A couple of not-obvious takeaways:

Medicare’s physician fee schedule is new and improved – a brief synopsis courtesy of HealthAffairs is here.  Couple of key points:

  • Until 2019, Medicare will give physicians a fee increase of 0.5 percent per year.
  • After 2019, there will be no additional fee increases; providers will have to pick one of two reimbursement methodologies

States adopting the MACRA (new acronym for the fee schedule) for workers’ comp are going to have to figure out what to do after 2019…

Enjoy the weekend – hope we get some rain.  Not used to drought in upstate NY…

Jul
7

You broke it, you own it.

Posted by Joe Paduda on Thursday, July 7th, 2016 | Comments

A bill before the US House and Senate would have required physicians and pharmacists to check state databases before prescribing or dispensing opioids.

All available research shows this is the single most effective step to reduce opioid abuse and kill fewer people.

Now, thanks to “doctors and pharmacists groups”, that requirement has been stripped from the bill.  What’s left is some – but nowhere near enough – money for treatment and the hope that, against all evidence to the contrary, docs who are writing the scripts that are causing the opioid disaster will take the time to check the databases before they write the script.

Not going to happen.

I am sympathetic to the claim that mandatory Prescription Drug Monitoring Program (PDMP) checking can be time-consuming. States have to do a better job of figuring out how to streamline the process while protecting patient confidentiality – and many have done so.  Moreover, the four states with mandatory PDMPs have figured it out, and it is working pretty well.

I am a whole lot less sympathetic to the argument that somehow a moment or two of a doctor’s or pharmacist’s time is too much to ask, for the simple reason that these medical professionals’ failure to properly prescribe and dispense opioids is the proximal cause of the opioid public health disaster.

Pretty much every independent research organization studying the issue has recommended mandatory PDMP checking.  Here’s one.

More bluntly, that behavior is killing people, and the lobbying to strip mandatory use of PDMPs shows that’s not that big a deal.

Kentucky, New York, Ohio, and Tennessee all mandate prescribers access PDMPs – and all have seen dramatic reductions in doctor shopping and opioid script volume.

There’s a wealth of supporting data here.  Briefly, here’s what mandatory PDMP use does.

  • after Ohio ER docs checked the PDMP, they changed their treatment plan for 41% of patients; 61% had fewer or no opioids prescribed, 39% had more.  And doctor shopping dropped by over 2/3.
  • In Tennessee, doctor shopping dropped by 50% and the volume of opioid scripts decreased by almost half a million scripts.
  • Kentucky doctor shopping was cut in half, 30% fewer patients received the “holy trinity” drug cocktail, and benzo and opioid scripts dropped significantly.
  • in New York, doctor shopping was cut by 90%, and treatment admissions rose by 20%.

After spending a fruitless hour searching the web for an actual policy statement or testimony regarding mandatory PDMP use by the AMA, my conclusion is the giant medical society wants it both ways.

They don’t want their members to have to check PDMPs, but they don’t want to be public about that opposition.

What does this mean for you?

Refusing to support mandatory PDMP is unconscionable.  At some point an enterprising class-action firm is going to figure out how to make a shipload of money off the intransigence of “doctors and pharmacists groups.”

 

Jul
6

We don’t need no stinkin’ science!

Posted by Joe Paduda on Wednesday, July 6th, 2016 | Comments

I think we’ve figured out why, in the face of compelling evidence to the contrary, plaintiff attorneys in California continue to argue the work comp system mis-serves a large number of workers’ comp patients.  

Before we delve into this, allow me to stipulate that many applicant attorneys are likely well-intentioned, seeking to do good, and may well believe that a lot of work comp patients are ill-served by the work comp system.  Since they only talk with work comp patients that have complaints, that would not be surprising.  And, a relatively few work comp patients are, indeed, ill-served by the system for a variety of reasons – a bad employer and/or boss, crappy doctor, under-trained and/or over-worked claims adjuster – even a lousy attorney.

That said, it appears their representative organization, the California Applicant Attorneys’ Association, is not conversant with research methodology, processes, or statistics – and that’s why they don’t understand that the work comp system is working pretty well.

I draw this conclusion after reading an article entitled “Calling all Applicants: The Injured Worker Survey” from a July 2016 CAAA publication. In the piece, author Richard Meechan argues:

“Nothing makes sense – up is down and they (the Committee on Health and Safety and Workers’ Compensation, or CHSWC) have graphs and charts to prove it.”  

The “Injured Worker Survey” Mr Meechan refers to will apparently enable the CAAA to:

“see how the system is working for the most seriously injured workers.  That would be workers that were out of work for more than a year, our clients, to be more exact.”

This is because the CAAA apparently doesn’t (want to) believe the myriad research studies published by research organizations about injured worker outcomes and related matters.

If you, dear reader, are puzzled by this, allow me to explain. Careful and valid data analysis by experts examining credible data sets can be, and often is, translated into “graphs and charts” to help the non-statistically-endowed understand what is really going on.

In the article, Meechan states he is skeptical of research finding “95 percent of medical requests were approved and that injured workers were satisfied with their medical treatment.”  That skepticism resulted in the CAAA’s enlistment of three attorneys to help the CAAA committee on Health and Safety figure out how to “respond” to these “tales” (referring to the research presented at CHSWC meetings).

While I could find no evidence that any of the enlistees have an educational or experiential background in statistics, statistical analysis, business analysis, the physical sciences, or operations management (heavy in analytics), one of the three did study economics back in the nineteen-sixties. This isn’t to denigrate the trio, rather to contrast their relatively modest scientific research and statistical analysis credentials with those of folks who actually do research.  Like CWCI. And WCRI. And RAND.

Using SurveyMonkey, the CAAA is conducting their “survey” and will likely publish “results” in an attempt to show the information presented at CHSWC meetings, based on reams of research published after hundreds of hours invested in very sophisticated analytical processes employing highly-refined datasets and tested methodologies vetted by actual, real, live, statisticians with decades of experience and darned impressive credentials in data analysis and everything that goes into it is, well, wrong.  

And CAAA will do this based on responses from an on-line, open access survey with no data validation or proof that you are actually an “Injured Worker” needed.

Hey, you can try it yourself, here.

So here’s where the problem lies.

In the article, Mr Meechan notes that fewer than one percent (33) of the 3700+ survey responses asserted they had been out of work for a year or more. Apparently that is concerning. Mr Meechan asks others to help get the word out, as “one hundred responses is the gold standard for surveys and we are short.”

That single statement demonstrates a complete lack of of even a basic understanding of statistics.  Mr Meechan is apparently confusing statistical validity with an arbitrary “gold standard”.  Further, there’s an assumption that all that is needed is 100 SurveyMonkey responses from respondents who claim to have been injured and out of work for more than a year, and he and his associates will have what they need to refute all that science stuff CHSWC throws up there on the screen.

As anyone who has one day of stats knows, without valid underlying data to start with, the whole exercise is pointless.

More directly, garbage in, garbage out.

And in this case, the underlying data is, indeed, meaningless. A gazillion monkeys could be typing away and deliver lots of “results”. Some whizkid could figure out how to program a bot to fill them out with no human intervention at all.  More prosaically, a bunch of law clerks could earn some extra hours banging away on laptops or iPads completing SurveyMonkey surveys.

In this instance it is indeed possible that some or most of the respondents at some point had an encounter with the work comp system. Or not.

I belabor this point not to embarrass the attorneys, for that is NOT my intent. Rather it is to point out an obvious conclusion:

As reform opponents think that a SurveyMonkey random survey will be more valid than real research studies conducted by experts, we now know why “nothing makes sense” to them.

They don’t have a clue.

They are totally, fundamentally, and blindingly ignorant of even the most rudimentary statistical terms and concepts.

 

Note – I don’t have a link to the original article.  sorry – ask CAAA for your copy.

Jul
5

Where work comp’s fraud problem REALLY lies

Posted by Joe Paduda on Tuesday, July 5th, 2016 | Comments

It’s not about the individual claimant who’s working while getting benefits, or the Sunday afternoon injury reported as on-the-job come Monday morning, or the migrating pain.

The construction premium fraud racket may well be a far bigger issue for workers’ comp than the sum of individual claimant problems.  That’s my conclusion after listening to several experts who deal with this issue every day, in every state.

I don’t pretend to understand this at anything other than a very high level, but suffice it to say it is massive.  Moreover, by far the biggest problem is on really big projects – we aren’t talking about the local sub who builds decks and redoes bathrooms.  Bridges, airports, office parks, malls, government buildings – all targets for fraudsters who under-report wages, fail to obtain valid workers’ comp insurance, and rely on horrendously short-staffed enforcement of laws that are often far too permissive.

Here’s how this works.  A contractor or subcontractors contracts with “facilitators” that obtain work comp insurance from agents and provide insurance certificates to labor brokers tasked with finding and paying workers.

The work comp insurance coverage is usually minimal, and is based on false payroll data.

Far too often these labor brokers cash their payments from the facilitator, payments that can run into the tens of thousands of dollars per week (and the facilitator may well get a % of the check as a kickback from the check cashing facility).  The broker may pay the actual workers in cash.

So, the general contractor has the paper that shows they have insurance and their labor costs are low (this is a highly competitive business, and construction contractors usually win or lose business based on their cost of labor).  The facilitator makes money on the front end and back end, the labor broker usually doesn’t pay the workers what they tell the facilitator the costs are, and the check cashing store makes anywhere from a couple percent to near ten percent in fees.

The folks who get screwed by construction work comp premium fraud are diverse – most importantly, it’s the worker.  They get caught up in the scheme when they get hurt, and either there is no workers’ comp insurance at all or the paper trail is, at best, inconclusive as to the worker’s coverage.  Often dumped at the door of the nearest ER, the worker is stuck for the cost of their care, or, more likely, the taxpayer is.

The original work comp insurer gets screwed too, with perhaps thousands of dollars of premiums foregone due to fraudulent reporting while the “insured” is deemed covered by state law.

And ethical contractors find themselves facing a very difficult situation; either lose bids to lower-cost competitors or play the work comp fraud game.

What does this mean for you?

We’re going to dig deeper into this in future posts, because we really need to.

 

Jul
1

The near-silence of the lambs…or, it’s still the work comp industry’s fault.

Posted by Joe Paduda on Friday, July 1st, 2016 | Comments

My post on the inability/unwillingness of work comp payers to talk publicly about the good work their employees do generated a bunch of emails and a few comments from the few payers that actually do try to get that message out.

Kudos to those payers for trying; doing something is far better than doing nothing. And I do NOT want the rest of this post to be seen as anything other than constructive criticism.  And thanks very much to the folks who got in touch and commented.

But…

Two issues – these folks are very much the exception to the rule.  Fact is the vast majority of payers rarely if ever share the positive news.

Which leads me to the second issue.  The folks that are doing some outreach almost without exception are bringing the proverbial knife to the gun fight.  YouTube posts, blog posts, and press releases are very few and very far between.  Some are pretty well done, but even the most prolific payers’ messaging is sporadic at best.

It is also rarely picked up by other media, so it sits there on their blog or YouTube channel, garnering a few hundred readers after a year or so.

Contrast that to the stories about heartless work comp insurers screwing injured patients in pursuit of the almighty dollar.  The media reach of bad news; ProPublica/NPR series, the Department of Labor’s discussion of work comp, and local media’s coverage of alleged bad behavior on the part of workers’ comp payers, adjusters, and medical management staff buries the good news about comp payers.

One other point; many payers’ press releases are rife with stories about their successes in catching claimants doing things they shouldn’t be able to, showing that the insurance company will find out if the poor “claimant” (I hate that word) is really able to walk without a cane.

While that messaging may discourage the occasional “fraud”, it’s more likely this PR effort does more damage than good.

Come on, folks.  While you may think this discourages the very few potential bad actors out there who are looking to game the system, the overall message is the giant, omnipotent, all-powerful insurance company vs the poor guy or gal trying to get by on a paltry average weekly wage that’s nowhere near enough to meet their financial needs.

So, what to do?

  • individual companies need to develop a strategy – a long-term strategy – to figure out how they want to be perceived and why.
  • commit to it, follow thru, and be consistent
  • work together in local markets and nationally to get that message out.
  • don’t be an insurance company – be innovative, interesting, engaging, occasionally funny, compassionate.
  • tell stories – about claimants, about the real, live, moms and dads that work for your company trying to make sure the patients they are responsible for get better and their families are protected.
  • don’t let execs’ fear of doing anything remotely risky stop you.

What does this mean for you?

If you don’t say who you are and what you stand for in a way that connects with people, you’re screwed.