Lower fee schedules, increase costs?

Dr Rebecca Yang discussed the correlation of fee schedules and associated physician billing activity.

Key takeaways

  • There’s somewhat of a correlation between low office visit reimbursement rates and higher incidence of physician dispensing.
  • evidence from CA indicates that when th FS whas reduced, doctors coding practices did too – more office visits were coded as level 4 and level 5, while the frequency of lower level visits decreased proportionally
  • when the fee schedule was subsequently increased, the trend to more upcoding moderated – then resumed when the fee schedule was frozen again.
  • this experience was essentially replicated in Louisiana
  • in Florida, a change to the fee schedule for facility-based lumbar MRIs essentially increased reimbursement for “unscheduled” MRIs when compared to “scheduled” MRIs.  Perhaps you, dear reader, will not be shocked to learn that “unscheduled” MRIs went from about 1/3 of all lumbar MRIs to over 2/3 over the next few years.

What does this mean for you?

Blunt instruments – such as the physician fee schedules in place in 42 states – CAN BE opportunities for bad actors to game the system, while hurting the good folks.  

Not to say they should be abandoned, but rather it is necessary to think about what will happen if you change fees (or other care-based reimbursement rules) – not what you hope will happen.

ProPublica’s demolition of workers’ comp

Yesterday ProPublica published the first in what is apparently a series of articles on the workers comp systems around the country. This first effort focused on ‘reforms’ and generally indicated these are driven by big employers seeking to cut workers benefits and medical costs.

There is much coverage of grievous injuries, lost limbs, different compensation systems in different states and the role of big business in writing reforms.

I would suggest that writing about reforms, without discussing what’s driving the medical care reforms, is an oversight. And there was precious little discussion of cost drivers, but a lot of discussion about cost control methods, including a tortured passage attempting to describe California’s utilization review process, and the issues inherent therein.  Unfortunately, the coverage of this issue focused on the denials of care, not on the reasons therefore, the process that is used, and why some requests should be denied (more on that in a later post).

Re California, I asked friend and colleague Alex Swedlow for his thoughts on how ProPublica characterized cwci’s research; here’s his perspective…

 The article would benefit from a full discussion on how much and what type of care is approved and denied.  It’s true our study showed that about 91% of the disputed denied treatments are upheld by Independent Medical Review.  What is missing from the article is that denied disputes are only 6% of all treatment reqests and that the California worker’s comp system approves 95% of all treatment.  And the 5% that is ultimatly denied is another story.

The dramatic increase in utilization review in California has been driven largely by the plaintiffs bar, which has been using the IMR process to extend disability. One has to wonder why they have been doing this. In addition IMR increases are driven by by the overuse of drugs, the changes in medical practice patterns since the treating physician presumption was overturned, and the desire on the part of many to address the overtreatment that is rampant in Worker’s Compensation.

Moreover, there was no attempt to explain why employers are seeking to direct injured workers to specific providers or panels of providers. This was presented as a problem for injured workers, when that is inmost instances absolutely not the case.

In fact, the care direction by employers was treated as somehow harming injured workers.

I was excited when I heard propublica I was going to be taking this topic on. I have been impressed by propublica’s work on many fronts. There is much about Worker’s Compensation that needs improvement. Unfortunately, my take on this article is that it is quite one sided, and does not address many of the significant issues that are leading to harm for injured workers, employers and taxpayers. As an introduction to the topic, it is seriously flawed.

While there may be other articles coming in future weeks and months, the expectation that has been set by this article is that the system is somehow tilted in the employers favor. I can assure you that in most states, this is far from reality.

I’d suggest that the story is far from complete. It ignores the rampant profiteering that is the primary driver of the reforms described in generally negative terms, fails to point out the complicity of the claimants bar in extending disability, and completely misses the damage done by profiteering physicians over-prescribing opioids and benzodiazepines and failing to work closely with payers and employers.

Data point- the back surgery scandal in California led to many unnecessary back surgeries, much pain for claimants, and tens of millions in excess costs for employers and taxpayers.

There is no question big business is behind much of these reforms just as there is also no doubt state medical societies are overwhelmingly to blame for rampant abuse of the system in states such as Florida and Maryland.

Data point- the medical society and a drug dispensing firm used the same lobbyist who successfully kept doc dispensing operating in MD thereby increasing costs and extending disabilty.

Finally the story fails to address a critical point – namely the nature of the workforce, employment, injuries and the health care system has fundamentally changed in the last 100 years.

Of course it doesn’t work now. Women are a majority of workers, employment in services long ago overtook manufacturing and industry, Medicare exists, health care systems have radically changed, and the working population is much older fatter and less fit.

It would have been quite helpful to discuss states where things are working well. Washington is one and Ohio has made great strides as well.

What does this mean for you?

If asked by a non-work-comp person about the article and subsequent pieces, you may want to suggest that reality is somewhat different from the world portrayed by ProPublica.

The latest data on physician dispensing from WCRI

Wcri’s experts summarized their latest research in doc dispensing in the second presentation.

A couple quick takeaways.

First, the efforts to control the price of the repackaged drugs dispensed by physicians has failed as the dispensers have effectively circumvented the rules or statute by creating “new” drugs that are remarkably similar to current medications.

this is particularly problematic in IL and CA.

Second, physicians in Florida were apparently prescribing and dispensing opioids more often than necessary as they stopped prescribing these meds when they could no longer profit from dispensing fees.

Pharmacy costs in CA are growing rapidly however the pain management guidelines seem to have led to a flattening in the growth of the more potent opioids.

CWCI exec dir Alex Swedlow provided his usual excellent debunking of the false claims made by doc dispensing advocates, noting costs are higher and disability duration longer.

The net – doc dispensing research overwhelmingly indicates the practice adds no value and benefits no one but the profiteering docs and their enablers.



Live blogging from WCRI

In lovely Boston this week for the annual WCRI meeting, a day and a half stuffed with Research findings data and interpretation thereof.

Warning- due to some laptop issues I’ll be posting from my iPhone, and you will undoubtedly see many more typos than usual. A prize to the reader who correctly totals all the typos over the next two days.

The conference begins with the usual WCRI disclaimer that the organization presents research results and does not take policy positions. I’m happy to infer what the results mean and what we should do about the findings.

The lead off session addressed the impact of ppaca on work comp, specifically cost shifting from group to work comp.

Olesya Fomenko Ph.D did the research on the topic with a focus on ACOs and their impact on case shifting from group to comp. Much of the discussion revolved around capitated vs fee for service reimbursement and the financial motivations of the treating provider. In a capitated system, the doc gets paid the same amount for all non-occ care, but makes more for treating occupational conditions as they are not covered under he capitation arrangement.

The key finding is the “growing use of capitation is likely to increase the number of soft tissue injuries seeking payment under WC.”  Obviously this is going to be more common in states where capitated plans are more common.  The research indicates a potential increase in soft tissue claims in the 12 or so states with a quarter or more of workers covered by capitated plans – CA NY PA MI MA etc.

If capitation increases, there may well be more states with characteristics indicating a higher propensity to shift cases from group to comp. Capitation has declined over the last decade, but the growth of acos is likely reversing this trend.

Whats not visible in the data is the question “were soft tissue claims under reported previously, and now that there are stronger financial incentives to correctly categorize claims, they are now correctly categorized?”

Pre-WCRI catch up…

With WCRI’s annual confab coming up Thursday am, meetings in Boston tomorrow, and lots going on already this week, here’s a quick summary of goings on from all over the health care world.

Kudos to Liberty Mutual’s (and fellow Syracuse University grad) Tammy Camillone; Tammy was just promoted to run Liberty’s bill review operation.  With the pending transition from Coventry’s 4.0 to Strataware, this is a big job – but one well within Tammy’s capabilities.

Healthplan membership climbed by 5.6 million members from Q3 2013 to Q3 2014. That’s not surprising; what is surprising is the big gains in ASO (administrative services only, or self-insured health plans for larger employers) business for Kaiser and Anthem.  While most growth was in the individual lines, the jump in employer plans indicates things are looking good for health plans across a broad spectrum of products. 

A study just published in JAMA indicates the risk of overdose from prescribed opioids may be significantly greater if the opioids are long-acting (e.g. OxyContin) vs short-acting.

To our knowledge, the findings of the present study provide the first evidence that the risk of unintentional overdose injury is related to the prescribed opioid’s duration of action. If replicated in other cohorts, our findings suggest that clinicians weighing the benefits and risks of initiating different opioid regimens should consider not only the daily dose prescribed but also the duration of opioid action, favoring short-acting agents whenever possible, especially during the first 2 weeks of therapy.

Thanks to Steven Feinberg MD for the tipoff.

Finally, there are good people in the world, and there are people who are not.

Goings-on in Maryland work comp highlights this all too well.  The physician dispensing advocates, their pawns at the Maryland medical societies, and their hired hitmen are all on the wrong side of right.

In pursuit of the almighty dollar, these slimeballs are quite willing to say anything, do anything, lie about anyone, distort any facts and compromise whatever morals they may once have had just so they can keep feeding at the trough.

A trough filled with dollars hard-earned by taxpayers and employers.

It’s March! well, almost…

Here’s the quick update on goings-on this week.

First, Helios has an excellent synopsis of rules, regs, and laws affecting many aspects of workers’ comp medical management here.  Get it, save it, and you’ll find it’s a great reference.

Kudos to David Williams!  His Health Business Blog has its tenth anniversary this week; he celebrates by hosting a most excellent Health Wonk Review.  Posts on hypocrisy and executive compensation at a Catholic Health Network, convoluted and mostly losing efforts to avoid the PPACA mandate, hospitals’ patient experience ratings and the profitability of fund-raising make for a quick roundup of news and views certain to keep you on top of all things health policy.

Ben Miller at WorkCompCentral reports on the recent spate of mergers in the PBM world (subscription required).  Ben discusses the non-work comp market, noting WC is affected by goings-on in the (much larger) group health, medicare/medicaid world.

Heard about several PT provider groups who are quite concerned/angry/furious re the 59 modifier issue.  Two have retained outside counsel and both are pursuing audits.

Finally, here’s a really good piece on how some efforts to motivate employees are counter-productive; Hint – it isn’t (all) about money – but it isn’t that simple either. Well worth your time.

Friday update

There’s a lot going on these days; several major private equity transactions in the works with one on the cusp of closure (and no I can’t name the companies),

ARAWC is a new group led by Sedgwick’s Chris Mandel in an effort to expand employers’ ability to opt out of workers’ comp.  Currently Texas and Oklahoma are the only states that allow employers to not carry workers’ comp; there is a bill in Tennessee that would make the Volunteer State the third.

Smart move on the part of the giant TPA; expands the brand, positions S as a player in the new niche, and generates conversations with employers that otherwise wouldn’t happen.  Sedgwick gets marketing.

For those interested in more details on correct coding, the folks at Equian have added a sequel to their popular Correct Coding Initiative video.  With all the excitement about the 59 modifier out there, it’s well worth the 4 minutes.

In the “I CANNOT WAIT TILL I CAN STOP TALKING ABOUT THIS” category, a college in Baltimore has set up an educational program to train doctors on physician dispensing.  This after Maryland’s recent decision to not do anything about physician dispensing because, according to data collected by DWC, it is not a problem.

This just in; physician dispensing advocates and their supporters spent just over a million dollars lobbying last year in Pennsylvania.  That’s the total from examining reporting for 2014 for the various dispensing companies, medical societies and fellow travelers who were focusing on doc dispensing.

Nice of them to use employers’ and taxpayers’ dollars to try to suck even more dollars out of those very thin wallets.  Even nicer that they lost.

Enjoy the weekend…


The Thursday catch up

Sorry, dear reader it’s been a very busy week.  here’s what I;ve been tracking.

At WCRI, Rick Victor’s now the CEO and his apparent replacement has been named.  While that’s good news, what’s better is longtime WCRI exec Ramona Tanabe has been promoted into a new position of EVP and Counsel. Ramona is universally respected for her ability and knowledge; she’s one of the most talented people at a very talented place.

Back to the new guy; John Ruser, Ph.D comes to WCRI with a wide range of experience at the Bureau of Labor Statistics and in other positions at the Departments of Labor and Commerce.  I expect there will be a blurb up on WCRI’s site here in the near future.

Here’s a brutally funny – albeit 17 minute long – John Oliver video on pharma marketing.  It’s well worth your attention, as only the John Olivers of the world can make something this disturbing this entertaining.

Sticking with drugs, and the aggressive marketing of same, I’ve been immersed in the world of hepatitis C drugs for a couple of weeks.  Well, if not immersed, perhaps toe-dipping.  Anyways, turns out these new miracle cures may well not be cures at all.  The research cited to assert claims of a cure is pretty very hugely limited; one mass media article looked at outcomes after a whole six weeks of treatment…and further erred/exaggerated/got this entirely wrong by assuming “no more virus” is the same as an actual “cure”. 

btw, Health News Review is a terrific site for those questioning the validity of mass media reports on anything medical.

As if this wasn’t enough, news just out that health care spending may have grown by 5.6 percent in 2014, driven largely by…you guessed it…prescription drug costs which zoomed up 13%, and possibly higher net health insurance costs.

The numbers are preliminary, to be sure.  Of course, the real metric is health care costs as a percentage of GDP; we’ll have to wait another month or so for almost-final GDP and health care cost figures.

That’s all for now…


Romance is in the (health care policy) air!

A romantic but but not icky edition of Health Wonk Review is up at Peggy Salvatore’s Health System Ed blog.  Peggy covers all manner of romance and passion, minus the omni-present 50 shades stuff (thank you Peggy!)

Whether it’s a quick and highly readable explanation of Medicare’s Sustainable Growth Rate, a paean to the individual mandate and history thereof (thank you GOP!), or an alert about the dangers of nursing, Peggy’s got it for you!


Friday catch-up

Just two things today – Let’s start with the CorVel – Fort Worth PD incident.  After a police officer was shot, CorVel sent a nurse to the hospital, where the nurse was accused of asking “inflammatory” questions by an outraged Mayor.  This hit the print and video media, and CorVel has been pilloried by some for “insensitivity”.

My take is this appears to be blatantly unfair to CorVel and the responding nurse.

According to a piece in WorkCompCentral this morning, an internal investigation at CorVel indicates the nurse acted appropriately; CorVel is supposed to send a nurse immediately upon notice of a catastrophic injuries – standard practice across the industry. The nurse has a list of questions to ask, including the condition of the injured employee.  Evidently the nurse asked the family these questions, and the family was upset.  According to CorVel, the police liaison person mishandled the nurse’s visit.

I’m no CorVel fan, but they are getting a raw deal here.  CorVel has apologized to the family; from what I’ve read it looks like the Mayor is the one who should be doing the apologizing.

Bob Wilson has a slightly different perspective; he notes timing is everything.  True indeed, altho in this case CorVel would have been damned if the nurse wasn’t doing what s/he was supposed to when s/he was supposed to.

Coming on the heels of a not-favorable earnings report - with lower overall earnings driven by declining profits on the TPA and network businesses - this must make for some unhappy execs at CorVel HQ.

Maryland’s dropped the ball on doc dispensing in work comp

I’ve got to take state legislators, a few insurers, and the regulators to task here.  A number of stakeholders signed a letter agreeing to not propose legislation to address doc dispensing for the next two years.  They based this decision on data provided to the Workers’ Compensation Commission, data that – according to the Commission’s Chair – showed a decrease in physician dispensing from 2011 to 2014.

The Chair – Karl Aumann – is a good man, but I have to challenge this assertion.  I haven’t seen the report that Chairman Aumann is referring to, but hope to get a copy.  In the interim, I defer to WCRI, which reports an increase in doc dispensing in Maryland.  For some reason Aumann doesn’t trust WCRI’s information, which makes him one of the very few people who take issue with that august institution’s findings.

What’s most troubling is the letter  - and the logic for the legislative hiatus – completely ignores the biggest problem with doc dispensing; medical costs are higher, disability is longer, and indemnity expenses are higher.  The “it isn’t as bad as it used to be” logic is faulty at best.

I’d also note the letter misstates AIA – the American Insurance Association’s “position” on the legislative hiatus.  My sources indicate that AIA did and does have a position; they were NOT in favor of a hiatus and wanted a bill that would address the core issue.

This is a big weekend – it’s the opening of the college lacrosse season – here’s hoping your team does well…unless it’s Siena…