ProPublica’s at it again.

ProPublica’s unethical “reporting” is being used in a PR effort to distort and demonize the workers’ comp industry.

An ethical journalistic organization would have sent a reporter to this week’s IAIABC conference, where they would have found 300 people all focused on improving a system that works quite well for the vast majority of patients and employers.

Instead PP’s “research” has been put into an “infographic“‘ that, by some unfathomable logic, attempts to link states’ occupational fatalities to a contrived, wholly inaccurate, and totally misleading “cut in benefits.”  (more on that here) What one has to do with the other escapes me.

PP defines “cut in benefits” as including, among other things:

  • adoption of utilization review and/or evidence-based clinical guidelines (can you IMAGINE!)
  • employer direction of care (to avoid patients going to pill mills and purveyors of fake surgical implants)
  • using outside medical reviewers to assess medical care
  • considering a patient’s pre-existing conditions in determining if an injury should be allocated to a specific employer

The mis-infographic is here, hosted on a law firm’s website.

Allow me to describe what a PP reporter would have seen if they’d bothered to attend IAIABC, the conference that, more than any other, digs into the issues PP seems most concerned about – how injured workers are treated by the work comp system.

They would have heard a terrific presentation by three physicians on improving the quality of medical care delivered to workers comp patients, followed by much discussion among regulators on how to increase the quality of care in their states and provinces.

They would have watched over a hundred regulators and other stakeholders work for four hours to develop an agenda for continued improvements in worker outcomes, safety, medical care, and satisfaction.

They would have heard countless hallway conversations about what this state or that state is doing to speed delivery of benefits, facilitate return to work, reduce friction in the system, and what other states might be able to learn from those efforts.

They would have heard a lengthy and detailed discussion about medical treatment guidelines, and a passionate debate about how evidence-based guidelines can improve the medical care delivered to patients.

They would have heard about an industry that is working every day to reduce the volume and potency of opioids prescribed and dispensed to patients – and having a LOT of success. (cue the totally false, dishonest, and self-serving BS from self-described “injured worker advocates” about how this is adding to suffering).

They would have heard a claims exec talking about his company’s policy on paying workers; NOT waiting to make absolutely sure a claim’s been accepted, but cutting checks to pay workers’ lost wages as soon as they think the worker will be out of work for more than a couple of days.


Why try to get the facts when it’s easier to gain pageviews by vilifying individuals who are doing their damndest to make things better?

It’s long past time each and every one of us stood up to this BS.  You – yes, YOU – need to promote, emphasize, publicize your successes.

The patient you helped find a new job.

The house you built to accommodate the paraplegic with a family.

The calls you made to that doctor to get them to change the script from Fentanyl to ibuprofen and physical therapy.

The visit to the plant to figure out why there’s been several recent shoulder injuries.

The time spent talking with state legislators about the importance of prescribers checking Prescription Drug Databases.

The multiple calls with the injured worker’s spouse, helping them understand and navigate the work comp system while listening to their fears and assuring them the check’s been cut.

What does this mean for you?

Sure, you can follow the usual insurance company playbook – don’t say ANYTHING because someone could misconstrue it.

THAT’s worked really well, hasn’t it?




Value-based payment – will it work in workers’ comp?

The IAIABC meeting in Portland Maine (a singularly GREAT location for conferences) includes some really deep dives into very hot topics – this morning’s discussion of value-based payment was certainly both.

Big takeawayCMS is going BIG into alternative payments tied to quality; estimates are 72 million people will be covered by ACOs by 2020.

David Deitz MD led off with a summary of what’s happening with Accountable Care Organizations (ACOs). Note this is NOT specific to work comp, but does have significant implications therefore. A few key takeaways:

  • Doc led ACOs performed better than hospital led-ACOs
  • ACO savings generally improved as ACOs got more experience, with half of the ACOs four years into the program earning performance bonuses.
  • some indication that quality has improved – BCBS MA, Marshfield Clinic are two that have delivered results.
  • several key process measures of quality show good improvement – hospital readmissions being one example.

What happens to losers in the quality race? Providers in NJ who didn’t meet quality standards sued and employed various other methods to try to address Horizon BC BS’ refusal to admit them to their Tier One network. Expect this “denial of fairness” argument to show up in other states where providers are booted out of narrow networks.

Kathryn Mueller, MD, Medical Director of Colorado’s Workers’ Comp and Dan Hunt, DO, Medical Director of Accident Fund, gave the regulator’s and payer’s perspectives.  As two of the more thoughtful medical leaders in workers’ comp, Drs Mueller and Hunt dug into the reality of work comp and value based payment.

Dr Mueller noted that bundled payments for surgery won’t necessarily help reduce the number of unnecessary surgeries, a point the audience heartily endorsed.

Dr Hunt has experience with bundled payments from his work as a surgeon; he noted that a lot of analysis and preparation went into developing a single bundled payment for one diagnosis in one location.  He also reported CMS is looking at a zero-based bonus system, where there may well be more losers than gainers (this is consistent with CMS’ expectations).  And, with work comp’s focus on functionality makes for a “better” outcome metric than those used in other payment systems.

So what does this mean for work comp?

  • FFS leads to more care – inevitably
  • FS may constrain costs but, FFS pays bad docs and good docs the same amount
  • So yes, value-based payment makes a ton of sense for workers’ comp, but…
  • Effective payment design must link value and outcomes – and NOT pay for harmful or valueless care.

What might work in WC?  Not medical homes, likely not shared savings or capitation. Possibly bundled payments, and pay for performance only with different metrics.

Emphasis on different metrics – because we in workers’ comp care about stuff other payers don’t, namely functional improvement and indemnity payments chiefly among them.

Data from a variety of providers indicates bundled payments have reduced length of stay, delivered lower costs and higher patient satisfaction.

And due to indemnity payments, work comp has even more incentive to pay for bundled care based on functional outcomes.  As a lot of high cost care in comp is orthopedic, which lends itself well to bundled payments, comp is well positioned to use bundled payments.

However…there are lots of barriers, regulatory, financial motivations of bill review and network vendors, TPAs, insurance companies, and no standard outcomes measures across work comp.

Dr Deitz opined that incentives to cost-shift may drive docs to categorize injuries as occupational in high FS states such as Connecticut and Illinois.

What does this mean for you?

Lots of frictional, regulatory, and entrenched interest resistance will make it hard for bundled payments – in fact most types of value-based payment – to see significant adoption in workers comp.


Note – I captured this as accurately as possible, however I may have unintentionally misquoted the speakers.  Corrections welcomed.


Medicare doc payment – the details

My post earlier this week on the pending changes to provider reimbursement resulted in a few emails from colleagues looking for clarification and more detail.  So, here goes.

First, why?

Well, everyone agreed that the Medicare doc payment program known as Sustainable Growth Rate (SGR) that had been in place for decades was not working. Details here.

And, CMS – as well as pretty much everyone in health policy not tied to a specialty medical society – wanted increased reimbursement for cognitive services, and lower payments for procedures – surgeries, imaging, etc.

So, in 2015 Congress repealed SGR and replaced with Medicare Access and CHIP Reauthorization Act (MACRA) (you can now forget what MACRA stands for.  The highlights are, MACRA;

  • Still uses CPTs and reimbursement based on RBRVS system
  • Tosses out the old quality evaluation metrics and methodology, replacing it with one that seems more doc-friendly.
  • The evaluation system is MIPS – Merit-based Incentive Payment System, and includes a value-based payment modifier, physician quality reporting system, and meaningful use of Electronic Health Records
  • MIPS goes into effect in 2019, using data from 2017 and 2018 to evaluate provider performance.  CMS expects docs who score high will get bonuses of 4 – 9% over the next five years.
  • Provides for an annual payment increases of 0.5% thru 2019, then frozen till 2026
  • Then .75% increase for APM providers (see below) and .25% for others

While those increases may seem pretty small, it’s important to understand that these are on the margin.  That is, the extra payments may well double – or even triple, the profit margin for providers.  Conversely, for providers that don’t meet standards, profits (or margins for not for profits) may hit zero.

What is the hoped for result?

With APM reimbursement going into effect in 2019, MACRA is intended to drive docs from fee for service (FFS) into a merit-based, quality-driven reimbursement system.  However, participation in the Alternative Payment Model s not mandatory; and CMS’ expectation is the vast majority of docs will NOT be in APMs, even though APMs (which include) Medical Homes, ACOs, etc) can get lump sum bonuses of 5% from 2019 – 2024; after that reimbursement increases 0.75% annually.

What does this mean for workers’ comp?

RBRVS stays around, which is key as almost all provider fee schedules are based on RBRVS.

Providers are going to work very hard to meet CMS’ quality standards, regardless of whether they choose to stay with MIPS or go to APM.  They have to; their financial viability is dependent on it.


What Medicare’s reimbursement changes mean for work comp

It isn’t possible to exaggerate the implications of the changes to Medicare’s provider fee schedule.

When Medicare shifts its weight, the foundations of workers comp move – a lot.  Here’s why.

First, around a third of provider reimbursement is governmental – and for some providers well over half of their payments come via Medicare, Medicaid, and other governmental programs which base reimbursement on CMS.

Second, the vast majority of work comp fee schedules are based on CMS therefore the changes  affect not only Medicare and Medicaid, but also many state workers compensation fee schedules. The decreases in reimbursement for imaging have been felt in Worker’s Comp. particularly in California and Florida. Also the increased reimbursement for physical therapy has also worked its way into the Worker’s Comp system.

The new fee schedule is known as MACRA.  Replacing the previous SGR system, MACRA will increase reimbursement 0.5% per year until 2019. At that point reimbursement will be flat until 2026.

While there are many other issues affected by this change, including increased reimbursement for quality and the use of electronic health records, the fee schedule changes themselves will have the most impact on Worker’s Compensation.

Expect continued increases in reimbursement for cognitive services; office visits, physical therapy and the like. I would also expect to see decreases in reimbursement for surgery and possibly ambulatory surgical centers which fare outside of MACRA.

What does this mean for you?

The schedule changes have already been felt in some states’ worker’s compensation systems. If Congress decides to take additional action which is possible but not probable this will also affect Worker’s Comp.


HWR reports on what’s REALLY happening in health care

Thanks to Louise and Jay Norris, HWR is up and ready for your enlightenment.

One of the great things about HWR is the information on stuff the regular media ignores, written by people who actually really understand health care.

Whether it’s reporting on the impact of ACA on poor and sick folks, the exploitation of immigrant workers, or a deep dive into pharmaceutical pricing, there’s way more insight here than you’ll get anywhere else!

And congratulations to Louise and Jay on their tenth year publishing Colorado Health Insurance Insider!


What the latest work comp drug spend means

NCCI released a study yesterday indicating drug spend for active claims increased 6 percent in 2014, driven by higher prices. That’s consistent with the finding from CompPharma’s Annual Survey of Prescription Drug Management in Workers’ Compensation, however more recent data indicates drug spend in 2015 dropped precipitously.

The chart below is from CompPharma’s to-be-released-momentarily 2016 Drug Survey; for the 30 payers surveyed (combined they account for just under a quarter of total work comp drug spend), drug costs dropped 8.7 percent in 2015.


Two observations.

Work comp PBMs are Unicorns; incredibly rare and completely unique, their business model is based on reducing their revenue.  In a very small, totally mature industry, PBMs compete for payers’ business by showing how they will reduce drug costs, and especially reduce overuse of opioids.

What other business does that?

In addition, work comp PBMs do this without the economic levers of deductibles, copays, coinsurance, and tiered formularies that group health and Medicare PBM programs use.  In fact, non-work comp PBMs can’t fathom how they do this.

“How they do this” is thru a deep understanding of drivers, a willingness on the part of the PBM to eat the cost of drugs that a payer decides aren’t compensable or related, a lot of analytics to identify potential issues and problems, many well-trained people dealing with patients, prescribers, pharmacists, adjusters, case managers, attorneys, sophisticated clinical management programs.  All this is necessary, highly effective, and expensive indeed.

I bring this to your attention, dear reader, for a couple reasons.

First, on a per-pill basis, work comp drugs tend to cost more.  That’s because it costs a LOT more to manage work comp pharmacy than to manage group, Medicare, or Medicaid.

Second, slashing fee schedules to Medicaid reimbursement means PBMs can’t afford to keep driving down costs and reducing opioid usage.

What does this mean for you?

PBMs and payers are doing great work addressing a major driver of work comp costs and disability; below-break-even fee schedules will force them to become pure transaction processors, something employers, taxpayers, and patients can ill afford.

Note – I am president of CompPharma.


What its like fighting the opioid industry

I’m struggling to find an analogy that fits how one-sided this fight is.

it’s not a knife-to-a-gunfight thing; at least you could throw a knife and have a chance of injuring your adversary – then run away.

it’s not a David v Goliath thing, because big pharma is VERY aware of “David’s” capabilities and vulnerabilities.

The best I could come up with is an ant vs. a boot.


A couple recent articles highlight how bad our collective butt is getting kicked (thanks to Steve Feinberg, MD – a colleague and pain management doc in CA).

While publicly vowing to help roll back opioid usage, the opioid industry is spending millions to convince state legislators to slow-walk efforts to reduce opioid prescribing, weaken PDMP usage requirements.  One telling datapoint; Pharma spent $880 million on lobbying and contributions from 2006 – 2015, anti-opioid groups spent $4 million on contributions to state political campaigns AND lobbying from 2006 – 2015.

In New Mexico, efforts to curb opioid prescribing have been defeated, thanks to an overwhelming push by big pharma.  The opioid pushers hired 15 lobbyists, contributed to most members of the key Committee working on the bill, and got what they paid for.

And it’s not just overt lobbying by pharma; these bastards are funding “patient advocacy” groups like the Cancer Network, creating their own “astro-turf” patient groups, even stuffing wikipedia with opioid advocacy crap and changing entries to delete negative information about opioids.

What does this mean for you?




Work comp’s future is not what you think it is

What drives workers’ comp is employment – more specifically, payroll, industry type, and claim frequency.

Employment is the end-all and be-all of workers’ comp – for premiums and policies on the front end, and getting work comp patients back to work when claims do happen.

So when a whole lot of jobs in a bunch of industries look to be disappearing, we work comp folks need to take notice.

If you insure, manage claims for, provide services to, or otherwise work in the transportation/logistics industry, you’d best be watching developments in Pittsburgh and keeping your eye on Otto.

Uber is experimenting with its self-driving cars in the Steel City, a big step on the way to fully automated driverless cars.


Ford is heavily involved, and will have a self-driving car on the market in 5 years.  Sign me up; as one who spends way too much time behind the wheel, I’m all over this.  Do work, read, work while being transported to client meetings? Heck yes!

The giant “ride-sharing” company is also behind Otto, an effort to automate long-haul trucking.

Photo below from SF Chronicle; testing of Volvo truck by engineer Nic Munley.


Unlike competitor Lyft, Uber doesn’t seem to care that its current drivers are going to be left ride-less in the not-too-distant future, nor is Uber bothered that, if when Otto and its lookalikes are successful in removing drivers from trucks, those 900,000 truck drivers will not have jobs.

And without truck drivers, truck stops won’t be selling much food or necessaries. Motels won’t be providing showers or rooms. Body shops won’t be needed as much either.

Uber contends that the 24/7 usage of driverless vehicles will mean more jobs for mechanics, but that’s speculative at best.  In fact, as these vehicles will just be replacing miles driven by vehicles currently piloted by people and not adding more vehicle miles, I don’t see why any more mechanics will be needed. Actually, less maintenance may be the norm due to constant monitoring of vehicle systems.


  • far fewer truck drivers
  • fewer support staff
  • fewer jobs in service stations, motels
  • fewer “taxi-type” drivers
  • fewer accidents = less work for body shops, less demand for auto parts and paint, less need for auto claims adjusters

For work comp…

  • much lower premium volume
  • far fewer claims to service
  • far fewer jobs to return injured drivers to
  • possibly more claims in the near future as drivers see the writing on the wall


Opt-Out – unneeded, unnecessary, and ill-conceived

Legislators in Oklahoma carefully crafted their Opt-Out legislation, seeking to address concerns about Constitution issues, fairness to workers, and redress,

Despite that intent, the state Supreme Court ruled the law is unConstitutional.

Therein lies a lesson for advocates and detractors from Opt-Out.  However, advocates should be cautioned against focusing solely on legal issues, as there’s a much bigger issue with opt out.

Namely, workers’ comp is not “broken”.

Moreover, moves to “reform” via Opt-Out have inspired a backlash among those concerned that workers will be ill-treated if not outright harmed by Opt-Out.  While advocates cite legislation that purports to require equitable treatment, most of the “power” is on the side of the employer in Opt-Out, making it difficult indeed for aggrieved workers to seek and obtain fair treatment if their employers don’t abide by the letter of the law.

Folks who work in jobs where there’s a higher risk of occupational injury are angry about their loss of earning power, about jobs that are disappearing, about powerful employers gaining ever more power, about decreased opportunities for them and their kids.  And they have every right to be angry.

The aggressive push to overturn a workers’ comp system that has worked quite well for the vast majority of employers and workers for a century feels like yet another finger on the scale for employers, especially because there’s no need for it.

Does work comp need improvement…Heck yes.  Here are a few changes that would make almost any state’s system work better for everyone.

  • Get rid of caps on maximum weekly wages.  Why peg income maximums to an average weekly wage, when workers who make a lot more will NOT be able to provide for their families at an income that is a small fraction of their working earnings?  That is nonsensical, grossly unfair, and unethical.
  • Adopt real evidence-based treatment guidelines coupled tightly to utilization review, allowing for expedited, clinician-driven review.  Use the Institute of Medicine standards for evidence and guidelines.
  • Allow direction of care to network pharmacies to eliminate physician dispensing, a practice that prolongs disability, raises medical costs, and provides no benefit for anyone but dispensing companies and providers.
  • Fully fund and fully staff employer fraud departments.  Crack down hard on wage fraud, especially that perpetrated on construction projects.  The return on investment on this will be healthy indeed.

One change we hope to see is an end to the pointless debate about Opt-Out – it is unneeded, unnecessary, and ill-conceived.


Oklahoma is opting out of Opt Out

With the news that NCCI is proposing a 10.2 percent rate decrease for Oklahoma, [sub req] the “Opt-Out” movement is rapidly approaching irrelevancy.

Following on the heels of successful legal challenges to Opt Out legislation (with more possibly on the way), the news that a mere 54 employers have chosen the Opt Out option, AND a 3.4 percent decrease earlier in the year, I don’t see how Opting Out of workers’ comp in the only state that allows it will survive. [technically Texas employers “opt in” to comp as they are not legally required to provide the coverage.]

This is a good thing.

While many employers that Opt Out do so honorably and with the full intention of dealing with their workers fairly and equitably, some most assuredly do not.  While the work comp system has its flaws – and more than its share of bad actors in all areas, it does work quite well for the vast majority of employers and patients.

Opt out allows bad actors to completely screw their employees, hiding behind legal walls that protect the employer from legal action by injured workers.  That’s completely wrong, and is all but impossible under workers’ comp statutes.

What does this mean for you?

Can we please nail the coffin shut and throw a truckload of dirt on top of an idea that deserves to not see the light of day?