Leaving Las Vegas

Quick takes from the blur that was NWCDC.

MedRisk’s Restore presentation was sitting-room-only; the company’s new venture is a comprehensive approach to managing delayed RTW – Restore targets all factors including psychosocial issues and involves comprehensive physical therapy, opioid-withdrawal management, and delayed recovery treatment.  (yes, MedRisk is a client)

Heard former Coventry CEO David Young is back in the game as CFO of a new venture with an old name – Occusystem.  No details available yet…

Speaking of Coventry, stopped into their booth yesterday to say hello.  Learned that their perspective on the move of AIG’s bill review business – and pending move of Liberty’s – is (surprise!) different from mine.  They noted that Coventry had informed both parties a couple years back that they would no longer be in the BR application business, therefore they took issue with my statement that they’d “lost” the business. I suggested that if the business was no longer their’s, then they had indeed “lost” it. Rather than argue semantics, I’ll report.  You decide.

Spoke with several investment types about Coventry’s possible re-emergence on the auction table.  As I’ve said ad nauseum, it’s value is the network, which is declining in effectiveness/size/discounts; the re-contracting effort is going to take a long time, and there’s not much else of value. (no, Coventry is not a client)

HealtheSystems has added Johns Eastern as a PBM client- word is things are going well.

Had a great time jousting with Bob Wilson, Becki Shafer, and David DePaolo at the bloggers’ roundtable.  Was hoping for a bit more “Jane you ignorant slut” and a bit less “I agree with…”

Caught up with Foresight Medical – they’ve engineered a pretty interesting surgical implant solution that is gaining traction.  Working with Broadspire and Medata, so they’ve already gone thru the virtual endoscopy.  (no they are not a client)

Ascential Care is growing fast.  Adding clients and getting more business from old ones, thanks to a focus on quality that’s like no other CM firm I’ve ever seen. The case management company also has one of the best websites in the business – and those people are actual AC folks. (no, they’re not a client either)

Finally, had a great session with three private equity executives.  Can’t thank Camilo Horvilleur, Jeff McKibben, and Hunter Philbrick enough – as the brains and dollars behind deals involving PMSI, MSC, OneCall, Align, Sedgwick, Mitchell, and many other work comp companies, this was a rare opportunity to hear about the process, understand what investors look for, get their views on leadership, management, and execution, and find out where they think the market is going.

Hope the conference was blindingly successful for you. Unless you were that ass in the elevator.  

Size isn’t all that.

The work comp services market is bifurcating. The big are getting (much) bigger, the $100-$250 million companies morphing into giants as they merge together or are acquired by private equity backed firms.

Meanwhile a whole host of new entrants are appearing – more on that in a minute.

Much of this has been rather mysterious to most. A good bit of light will be shed on the big-getting-bigger phenomenon today in a session at the NWCDC. I’ll be moderating a panel of three eminent investment executives tasked with explaining the whys and hows and whats; it kicks off at 10:45. Don’t be late as this is going to be very popular.

One of the key topics will be the factors that make some of the newly-constructed companies succeed while others don’t. There are a couple firms that provide real-world examples…

Back to the little gals and guys. I lead with gals because women seem to be inordinately represented among the CEO ranks of these emerging companies.

Whether its transportation or home health/DME or SIU, the exhibit floor and attendee ranks are brimming with hyper-motivated, very focused, totally committed small companies looking to take advantage of distracted, stodgy, slowly moving megacorps seemingly more focused on managing perceptions than service.

Many will succeed.

The long-rumored York acquisition will not close during the show, but it will close. Final details are being wrapped up and regulatory approvals obtained. Knowing the parties and principals involved, it’s very likely they will not make the same mistakes  noted above.

Comp conference day 1

The first day is more ease-into-it than jump-in-with-both-feet. For we East Coasters that’s a good thing as we can’t keep up with the late night events after waking at 3:30…

One noteworthy item and a couple observations from Tuesday.

The Coventry bill review RFI is out and rumor has it – it is Bill Review only. As in no other services needed. And lots and lots and lots of requirements. And the info required in a response is voluminous.

There is a rather limited pool of potential respondents; as in fewer than five. The business potential, while large, is shrinking. With the loss of AIG and pending loss of Liberty any successful bidder is going to have to staunch the bleeding.

Or more accurately, hope Coventry does.


As noted last year, what happens in Vegas gets posted to youtube. On an elevator departing a social event last night several men were commenting loudly and often in vulgar terms on the physical attributes of a woman. Who was also on the elevator.

I’m looking forward to meeting these boys on the exhibit floor. And their boss. I hope she’s a woman.


No one cares about your product or service. They care about their needs, which you don’t and can’t know unless you ask questions, shut up and listen.

Much more going on, but alas I heard “this is off the record” all too often yesterday.





And the first real news in Vegas is…

While no one from Medata will comment, word is the company has just implemented their bill review platform for AIG.

This has been very long in the making; we first heard rumors about the deal a couple years back.  It was all over the room at last night’s Medata event; evidently AIG went live within the last week or so.

There are at least two significant implications.

First, bill review application firm Medata is a force to be reckoned with.  Long a relatively small player, this relationship clearly moves them into the top tier with Xerox and Mitchell. No disrespect to Tristar, PMA, Amerisafe, and Medata’s other customers, but adding the 5 million plus bills flowing thru AIG is a whole different ballgame.

Second, AIG moved from Coventry.  This is a major loss for Aetna/Coventry’s bill review business; with Liberty Mutual likely switching over to Xerox the writing is on the wall.

Expect Coventry to either make a major investment in bill review (highly unlikely) or outsource the application to a third party (highly likely).

Asbestos pokes its long nose out from under the workers comp tent

Judgments in two recent court cases held that long-tail asbestos claims are not subject to the comp bar.

A very good friend who spends most of his time dealing with asbestos claims for a very large carrier shared this with me in a recent email.  Here’s how he put it:

If this contagion were to spread (and that depends very much on the precise wording of the comp statutes in each state), a lot of employers who might have believed that they were protected by the comp bar will find themselves defendants in lawsuits brought by former employees, which raises lots of questions about the applicability of their GL or EL coverage, assuming they had it and can identify the insurers.  [emphasis added]

The two cases are Tooey v AK Steel Corp et al., 81 A.3d 851 (Pa. 2013) in Pennsylvania and  Folta v. Ferro Engineering, 2014 Ill. App. LEXIS 444 in Illinois.

In Tooey, the PA Supreme Court ruled that the exclusivity provisions of the Pennsylvania Workers’ Compensation Act did not bar former employees alleging asbestos exposure from bringing lawsuits against their former employers when the asbestos related disease didn’t appear until after the time limit for filing for statutory work comp benefits had ended – which is 300 weeks in PA.

In Folta, an Illinois appeals court used the Tooey citation in revisiting an asbestos injury suit filed by an alleged victim who wasn’t diagnosed with an asbestos-related disease until 41 years after leaving his employment.

There’s a lot of legal detail involved including determining which statute takes precedence, however the likelihood that the Courts’ rationales are not likely to be limited to asbestos claims may well be the most significant.

What does this mean for you?

This strikes me as one of those things that could either be very, very meaningful.  What think you?

Friday catch-up

Lots happening in the workers’ comp world these days – here’s what caught my attention this week.

WCRI released its CompScope report, which is actually 15 separate reports covering 16 states.  I’ll be reviewing it in detail next week; for those who can’t wait you can find the summary of the news on Illinois here.  WCRI will be releasing other highlights over the next couple of weeks.

The good news in IL is the change to the fee schedule has had the desired effect; costs are about 20% lower.  That’s the good news; but all is not rosy.

  • PT continues to be problematic; utilization in IL is much higher than average among CompScope states at 25 visits per LT claim.  Only PA, with 27, is higher…
  • Surgery costs per claim were also highest among the study states.

More work to do in the Land of Lincoln.

Several states are looking hard at implementing formularies; Arkansas is considering adopting ODG’s, scheduling a public hearing on that proposed change for later this fall.

There is considerable interest in Washington’s formulary.  CWCI’s analysis of the ODG and WA formularies and implications of implementing them in the Golden State has generated quite a bit of interest; with projected annual savings ranging from $124 million to $420 million that’s not surprising.

Notably, Ohio’s formulary – which is truly closed, has resulted in almost no “non-formulary’ drugs dispensed to claimants.  While it is not as well known as TX and WA, the OH formulary, adoption process, and results show just how effective a well-managed formulary and drug management program can be.

WCRI’s hosting a webinar on the potential impact of adoption of the ODG formulary in other states.  Led by Dr. Vennela Thumula, the one-hour  webinar is on Thursday, Nov. 20, 2014 at 2 p.m. ET (1 p.m. CT, 12 noon MT, and 11 a.m. PT).

For those interested in the future of the workers’ comp world – which should include anyone working in the work comp industry, a lengthy piece on the future of international labor markets by The Economist is worthy of your attention.  Very well-written (as is typical for the Economist), they key points (quoting the article) are: [emphasis added]

  • the rise of machine intelligence means more workers will see their jobs threatened. The effects will be felt further up the skill ladder, as auditors, radiologists and researchers of all sorts begin competing with machines. Technology will enable some doctors or professors to be much more productive, leaving others redundant.
  • wealth creation in the digital era has so far generated little employment. Entrepreneurs can turn their ideas into firms with huge valuations and hardly any staff.
  • these shifts are now evident in emerging economies. Foxconn, long the symbol of China’s manufacturing economy, at one point employed 1.5m workers to assemble electronics for Western markets. Now, as the costs of labour rise and those of automated manufacturing fall, Foxconn is swapping workers for robots

Time to get to work – the annual Health Strategy Associates Halloween party is tonight!


Friday catch-up

Here’s a quick tour of what else happened this week…

First, let’s just relax about Ebola.  Yes, a physician in NYC – who treated patients in Africa – has come down with the disease.  Yes, he traveled on the subway and went bowling before he was diagnosed.  No, this doesn’t mean there’s a nascent epidemic, the City needs to go into lockdown, and residents should panic.

Ebola is hard to catch – a symptomatic victim has to share bodily fluids with another person for the virus to be transmitted.

You don’t get it from a bowling ball or subway seat.

Oh, and the two nurses in Dallas are recovering nicely; one is virus-free and the other improving steadily.

And, of the eight people treated for Ebola in this country, one – Mr Duncan – died, six recovered (or are recovering) and one (Dr Spencer) is in treatment now.

Last word – the nasty, over-the-top criticism of the CDC from critics as diverse as Mitch McConnell and Bill Maher is completely off base.  Dinging the CDC because a hospital in Dallas didn’t immediately understand a potential Ebola patient had presented and wasn’t thoroughly prepared for that (remote) possibility is just ludicrous; as is the vitriol directed at the hospital.

okay, back to the real world. or what passes for it in the US health care non-system.

First up, a piece in JAMA finds patient care delivered by hospital-physician organizations costs more than physician organizations.

After adjusting for patient severity and other factors over the period, local hospital-owned physician organizations incurred expenditures per patient 10.3 percent higher than did physician-owned organizations, according to the study. Organizations owned by multi-hospital systems incurred expenditures 19.8 percent higher than physician-owned organizations. 

Let’s not read too much into this – JAMA is a doc-run publication, but it does have the ring of truth to it; billing practices change when hospitals/health care systems own doc practices, and they don’t get cheaper.  Abstract is here.

Coincidentally, Fitch recently published a study indicating for-profit hospitals are doing quite well, thank you! Seems “the financial headwind of caring for uninsured patients has lessened, evidenced by markedly lower adjusted bad debt expense for large hospital companies.” This is ‘more true’ in Medicaid-expansion states, but is also happening in non-expansion states.

Less need to cost shift to work comp…

A few years back we were hearing how ACA would cause large employers’ health care costs to explode, leading them to drop coverage.  Hasn’t happened.

From Bloomberg; “Employers and their workers have benefited in the form of lower premium increases for their insurance plans. Other than a spike in 2011, after the law required plans to cover children until age 26 and eliminated cost limits on care, premium increases have averaged less than 5 percent a year since 2010, according to Kaiser. ”

Notably, a big part of this is due to employers raising insureds’ copays, deductibles, and cost-sharing.  That was going on before ACA, but now it’s capped.

Sources indicate Aetna is proceeding with efforts to recontract the Coventry Work Comp network onto Coventry “paper”.  However, those efforts seem to be rather lackadaisical; negotiators aren’t pushing hard for discounts, seemingly more interested in “dots than discounts.”  That is, there’s much more focus on getting contracts signed then on the discount itself.

No details on how successful those efforts are; will keep you posted as we hear.

Time to get to work – enjoy the weekend – away from work!

Physician dispensing in work comp; two victories!

I know, you are as tired of reading about physician dispensing in work comp as I am writing about it.  At last, there’s some very good news.

Quick refresher – docs dispensing drugs adds about a billion dollars in excess drug costs – plus increases disability duration by 10 percent, medical costs, and total claims costs.  Dispensing docs also prescribe more opioids to more claimants.

Benefits?  None, except huge profits to dispensing docs, dispensing companies, and their owners – we’re talking about you, ABRY. (investment firm that owns dispensing “technology” firm Automated Healthcare Solutions)

First up, a court case in Louisiana found in favor of the employer, as the 3rd Circuit upheld a workers’ compensation judge’s determination that a claimant would not be reimbursed for drugs dispensed by a third party pharmacy, in this case Injured Workers’ Pharmacy, when the employer had provided access to other pharmacies and otherwise complied with regulations. According to Troy Prevot, Executive Director of LCTA Workers’ Comp -  “The result of this decision will allow us to continue to use retail pharmacies to control pharmacy cost by negotiating lower pricing thru PBMs” instead of paying much higher prices for doctor dispensed or third-party mail order drugs.  

I’d add that LCTA’s victory will enable all other employers in Louisiana to ensure the clinical management of pharmacy is handled correctly by one entity.

Big news from Pennsylvania too – a bill (HB 1846) limiting physician dispensing duration and cost, and specifically targeting opioid dispensing, will become law (there’s some technical stuff going on, but it will happen). Among other things, the law will:

There has been much heavy lifting here – kudos to AIA, the Insurance Federation of Pennsylvania (the leader of the effort) PCI, the PA Chamber and CompPharma’s member PBMs (full disclosure I am president of CompPharma; the PBMs did the work).

This follows the good results in North Carolina – but all is not rosy, as Maryland and Hawaii employers and taxpayers are still stuck paying far too much for drugs and the crappy outcomes they deliver.

What does this mean for you?

Better outcomes for claimants, lower costs for employers and taxpayers!

Monday catch up

Quick and clean – here’s what else was going on last week.

First, hands OFF the Ebola panic button.  Yes, a nurse who treated the Liberian man in Dallas has reportedly been diagnosed with the disease.  That makes TWO people in this country – out of 320 million.  By way of comparison, more left-handed redheads with Lynryd Skynryd tattoos have been bitten by sharks wearing dentures than have contracted Ebola…

Hank Stern has a post wondering why some treatments for autism aren’t covered for people over 21. Kaiser Health News spoke to an expert who thinks these treatments will be covered as soon as someone initiates a legal challenge; the key is the Mental Health Parity law, which prohibits discrimination based on “quantitative” measures – age is one.

Work comp

Kudos to Arizona for pushing forward on opioid and pain management guidelines.  The guidelines and the draft rules to implement them are slated to be completed by the end of this year – and it’s obvious there’s been a lot of thought put in to implementation. Greg Jones has the details at WorkCompCentral.  [subscription required]

WCC’s Joey Berlin has the news that Tennessee is also working on opioid/pain guidelines, and his sources appear to be very well tuned in to issues related to comp – such as workers prescribed opioids who are still on the job.

This is very, very good news.  And, with this am’s WorkCompCentral reporting three other southeastern states are exploring adopting guidelines it is clear that the powers-that-can in many states are rapidly moving to address the issue.  Side note – the folks interviewed for the WCC article have a high level of understanding of guidelines and differentiation amongst different types – good news indeed.

The good folk in Oregon have released their biannual report comparing states’ workers’ comp premiums; California has the highest rates, followed by three northeastern states – Connecticut New York and New Jersey. Kudos to Jay Dotter and Mike Manley for their work – which is always eagerly anticipated as it is the only survey of its kind.

Texas’ work comp research folks published their annual report – WorkCompWire has the info here.

WCRI’s webinar on research into predictors of worker outcomes has been heavily subscribed, so capacity for the webinar has been doubled.  Sign up here.

Don’t miss Dr Jake Lazarovic’s article on Accountable Care Organizations and work comp.  The Medical Director for Broadspire has penned a solid piece on what ACOs are, how they operate, and how they may affect workers comp.

Finally, don’t forget to sign up for the Women in Worker’s Comp confab in Vegas just before the NWCDC.  Kudos to Healthcare Solutions for putting this together…

A very busy week…

And only one post…clearly I’ve been slacking.  Time to catch up!

Workers Comp

There’s been much discussion of the implications of the demise of the APAX-Coventry Work Comp Services deal; CWCS staff seem to have mixed views, but most are concerned that parent Aetna will continue its non-investment “strategy”, allowing the business to slowly fade.

It would be a mistake to attribute this to some nefarious plan and dark-hearted souls.

Work comp is – at best – tangential to Aetna’s Medicare, Medicaid, group and individual health businesses.  Any time spent focusing on WC is time not invested in much more important things.

Conversely, Coventry is anything but “tangential” to many work comp payers.  For many, CWCS is the integrator, bill processor, document manager, provider network, case manager or some combination thereof.  With medical expense accounting for 3/5ths of claims costs, payers with close ties to CWCS will be watching developments very, very closely.

While we’ve been focused on the Coventry-APAX deal, we haven’t been hearing about other transactions.  There are a couple other potentials out there, but if anything the deal flow has been markedly slower, partially because there just aren’t that many more deals to be done.  We may well see activity pick up again now that there’s more clarity around what would have been a blockbuster transaction.

Lots of good news this Friday – thanks to lots of good people…

While many of us have been focused elsewhere, two organizations have been doing their part to secure the future of work comp.  IAIABC just announced grants to two women to help them continue their workers’ compensation studies - congratulations to Chamila Adhihetty of Toronto, Ontario and Suzette Carlisle of St. Louis, Missouri – and to IAIABC for their foresight.

Coincidentally, Healthcare Solutions will be hosting the inaugural Women in Workers’ Comp Forum on Tuesday, November 18 just before the NWCD Conference in Las Vegas. Registration is free, and the event is proving to be quite popular. Sign up soon here. Kudos to HCS’ SVP Elaine Vega for the idea, and to CEO Joe Boures for enthusiastically supporting it.

WorkCompCentral is focusing on the top performers in California’s comp system – physicians, attorneys, expert, employer, claimant, regulator - with their Comp Laude(tm) Awards.  Nominate your pick here.

One of the finest people in this business is Chris Brigham, MD.  Chris has just released a most excellent book – Living Abled.  He wrote the book to help those dealing with potentially disabling conditions navigate the system, find and use resources, and take charge of their injury or illness.  While individuals can order the book themselves, payers may well want to consider giving it to every claimant. Disability is more about attitude than physical limitations, and Living Abled will help people think clearly about what they can do.

The good folk at WCRI have been marching along, publishing even more research on issues critical to the industry.  A webinar on predictors of worker outcomes is coming up on October 16; sign up here now as there are only 100 slots…

Also just out is a study of what’s happened in Georgia since the Peach State imposed pricing controls on physician-dispensed drugs (spoiler alert – prices dropped significantly after the reform, but doc-dispensed drugs are still much more expensive than the same pills purchased at a drug store).


My view is the dispensing profiteers seek out drugs from suppliers who inflate the pills’ AWP (the basis for the fee schedule), then turn around and sell them to the docs at a deep discount below AWP – thereby making millions for docs and dispensing companies, and costing employers and taxpayers those same millions.

Read the study and come to your own conclusions.

Broadspire Medical Director Jake Lazarovic M.D. just published an interesting paper on Accountable Care Organizations and Workers’ Comp. Download it and read it on your next flight; it’s an excellent synopsis and poses intriguing questions.

Enjoy the weekend – and remember to 

A – turn off the work email.

B – Put your “away” message on work voice mail.

C – Enjoy the fall weather!