Thursday catch-up

I’m off for a few days; back to work next Wednesday.

Here are a few items of note you may have missed.


First up, thanks to Ohio BWC Pharmacy Director John Hanna who sent me this MedPage piece on medicine in India in response to my post on generic drug pricing (scroll down for the info on pharma).  A lot of generic manufacturing is done on the sub-continent; one possible reason generic prices increased over the last couple years has been the FDA’s extreme caution in allowing drugs manufactured in India into the US.

Given the horrifically bad track record of medicine and pharma in India, methinks I’d rather pay a few dollars more for my meds than allow defective drugs into our health system.

Workers’ comp

Looks like California’s efforts to reform medical delivery for work comp are paying off. CWCI reported medical costs declined from 2013 to 2014 by 5.7% to 7% (depending on valuation point).  This is a significant improvement; report author John Ireland attributes the reduction to:

  • the phase-in of the RBRVS fee schedule beginning in January 2014;
  • the reinstatement of lien filing fees,
  • the reductions in ambulatory surgery center fees, and
  • the adoption of the IMR dispute resolution process.

Notably cost containment and medical management expenses increased substantially; this is to be expected as the flood of IMR requests.

WCIRB’s Greg Johnson reported similar results (hat tip to WorkCompCentral’s Greg Jones); the rating bureau saw medical costs per claim decrease 4.7% from 2013 to 2014.  The change in fee schedule to one based on Medicare’s RBRVS for physician services looks to be one of the main drivers.  What’s very interesting (really!) is the percentage of payments going to specialty docs declined last year, while dollars going to general and occ health providers went up significantly.

This is good news; it is entirely consistent with national trends to better compensate primary care providers.

A closely-related item comes from the esteemed Steven Feinberg M.D., one of the most thoughtful physician observers I know.  Dr Feinberg provides a template for health care providers seeking to obtain a favorable ruling on a utilization/IMR request.


The future

Another thought-provoking piece about the impact of automation on insurance: an analyst sees a distinct  possibility that the auto insurance industry will not exist in 20 years.  


The more things change…

Peggy Salvatore is early!  Her August edition of Health Wonk Review is up and running here.

This is an insurance- and policy-rich edition, sure to sate your search for sense in the health care system!

Catching up…

Summer is supposed to be slow down time – this one is proving to be anything but.

Worker’s comp

There are several acquisitions likely to be announced over the next few weeks, one relatively small one as early as today.  When I get confirmation I’ll post.  A couple are  “tuck-ins”, additions that are seen as meshing well with existing businesses and/or add a strategic benefit.

Chris Brigham M.D.’s book Living Abled is getting considerable traction; employers would be well-advised to consider giving copies to injured workers.  Another target market would be treating providers, and I’d strongly encourage case management firms to make sure each of their staff gets and reads the book.

The feds have a great effort underway to get input on the best ways to establish work – employment – as a health “outcome” measured by health plans, exchanges, and other stakeholders. This is both long-overdue and very welcome.  Sign up and tell ’em what you think!


Exchange enrollment, Health insurance prices, and access to care

Renewals via Exchanges are proceeding apace, with an update from several large states indicating

  • enrollee retention is pretty high
  • enrollees are doing a lot of shopping around for price, coverage, benefits and networks
  • re-determining subsidy eligibility and levels is a challenge as it is based on income data and other information

In California, rates are up by 4% on average, a slight decrease from last year’s 4.2% bump.  About 2% of enrollees will have to switch plans if they don’t want an increase of 15% or more; in contrast 20% get good news; their rates all drop. 

Overall, folks who shop around will be able to find a plan – in the same tier – for about 4.5% less than they are paying today.

One datapoint on access comes from Michigan, where availability of appointments for Medicaid recipients actually increased after Medicaid expansion. I was surprised to learn that privately insured patients’ access decreased albeit by a very small margin.

Enjoy the weekend, and before you slather on that sunscreen, read this –  all that sunblock and sun protection may be doing harm too – it can lead to chronic Vitamin D deficiency, a very bad thing.

It’s another done deal in work comp services…

Another deal is official; One Call Care Management has announced its acquisition of MedFocus.  This had been rumored for some weeks, OCCM has been notifying their clients it is now official.  This knocks out another potential imagining vendor, further consolidating One Call’s stranglehold on the market.

MedFocus has about $50 million in revenue, reportedly divided equally between work comp and non-occ payers.

Let’s talk for just a minute about this.

OneCall historically has had a dominant position in this sector, built on great customer service and a relentless focus on “leakage”. The last involved many processes including getting their payer customers to provide OneCall with data about ALL imaging billing, data OneCall used to recruit new centers, identify gaps in coverage, and work with payers to get their field folks to direct claimants to use OneCall’s scheduling process (and thereby capture the bill).

The number of competitors has dropped over the years; truth be told OneCall’s imaging business really hasn’t had a competitor worthy of the name for over a decade.    There’s also Spreemo, but it is pretty small as well, and a couple others that are owned by payers or are relatively small product lines for bigger managed care businesses.  MedRisk, a consulting client, owns a very small imaging company too.

OneCall is unique in the work comp services business in that it is by far the dominant player; in no other sector does one vendor have even half of the market, a position OneCall surpassed a loooong time ago.  They’ve gotten there by doing, by most accounts, a very good job historically.

Continuing to deliver will be key to continued dominance.

What does this mean for you?

Depends…do you like choice?

Drug testing explained – part 2

Yesterday’s post about testing work comp patients for opioids struck several nerves; perhaps the most sensitive involves frustration on the part of payers unhappy about paying for tests prescribed by docs who don’t read the results.

That and the outrageous prices charged – and paid – in some states by some labs/physicians.

In addition to several public commenters, I heard from two medical directors yesterday about docs who order tests and never take action when the results are “inconsistent” with expectations.  Over the last few weeks I’ve have had similar conversations with pharmacy directors at two large state funds.  Simply put, these folks are happy to promote best practices, but do NOT want to pay for tests that are never read.

What’s a payer to do?

First, watch the coding and reimbursement very carefully; your medical bill review function may be able to help identify inappropriate coding and/or coding that looks to be primarily reimbursement-driven.

Second, direct away from those providers engaged in unacceptable billing practices.  Yes, I understand you cannot force claimants to use or not use specific providers in some states.  I also know payers can encourage/recommend/channel/suggest/educate claimants about specific providers; Express Scripts had some solid results by educating patients about physician dispensing, and their lessons learned can inform your approach.

Third, make the high billers’ lives difficult by doing everything possible to reduce reimbursement; require medical necessity statements, require evidence that the test was actually done, reduce reimbursement by whatever legal means necessary.  I’ve talked to a couple payers who have successfully battled physician dispensers using this tactic; one roundtabled the issue with adjusters who came up with several very creative and effective ways to make life extremely difficult for companies billing for physician-dispensed drugs.

And the adjusters really enjoyed it…

For docs who don’t read the tests they have ordered, an outreach program wherein a test with aberrant findings triggers a case manager contact with the treating physician is in place at several payers.  While this – like everything else in workers’ comp – is no panacea, it does alert the treating doc that there’s a problem.

There is also technology available and currently in use that can determine if a document emailed to a recipient is opened.

Worst case, the payer can use this information if the claim goes to litigation, and/or to seek a change in physician, and/or to demonstrate culpability on the part of the physician if the patient has an adverse event.

What does this mean for you?

Drug tests are a tool; used correctly they can be very helpful.  But tests that are bought and never used are a waste of money. And using the wrong test is like trying to tighten a bolt with a hammer.

The real problem with California’s IMR process

There’s 10 docs in LA who account for 1 of every 8 IMR requests in California’s work comp system.

That’s about 3 for every working day for each physician.  That’s a shipload of IMR respects.

According to research just released by CWCI, 88.5% of their requests to overturn a UR decision are rejected.

One wonders if they find something new to appeal each and every time, for surely they must know that if drug A has been rejected 10 times out of 10 – or 20 out of 20, or, well, you get my drift – it probably makes no sense to ask for it again.

Unless, you’re just trying to flood the IMR system, choke it with requests so it can’t function, and pick out one or two screw-ups to hold up as evidence that the entire system is broken.  Conveniently ignoring that the flood of unnecessary requests may have played a big role in screwing up that system.

Then you complain that decisions are delayed and late and not fulfilled, conveniently ignoring that most of those delays are due to a failure on your part to send in the right documents.

But let’s set aside these disagreements and focus on what’s really happening here.

We all know that many treatments hurt patients; unneeded surgery, too many MRIs, the wrong drugs or overuse of opioids do much harm.  That’s been so well documented you don’t need me to provide citations.

Yet a handful of docs persist in demanding they be allowed to do this to their patients – to overprescribe opioids, to over-radiate, to cut and sew.

Drugs account for almost half of all IMR requests – the vast majority of the denied drug requests are for opioids, a drug class long known to be dangerous, subject to abuse, and rarely appropriate except for short term treatment of trauma or post-surgical pain.

Let’s have a conversation about the human cost of this unnecessary and dangerous treatment. We’ve heard a lot about the harm caused by payers and processes that fail patients – some of it has been accurate and some wildly distorted (the denial of spinal fusion, for one)

What does this mean for you?

For those who tout themselves as claimant advocates, are you ready to talk about over-treatment and the damage it causes and what you will do to protect your clients?

If not, why not?

Thursday catch-up

Hope you, your family and friends have a terrific Fourth of July; we will be celebrating at home in upstate New York and watching the American women take on Japan in the World Cup Final.

The brief update on what’s happened this week and last.

The economy

A sizable increase in employment in June – 223,000 new jobs were added.  About 1.2 million jobs have been created so far this year. (edit – quoted May’s figure in an earlier version; apologies for my confusion)

The unemployment rate dropped to 5.3% from May’s 5.5%, but the labor force participation rate also decreased, driven by lower participation among teens and younger men.

This morning’s employment report shows an economy that is adding jobs in construction, retail and business services.

While wages were essentially flat in June, over the last twelve months employers have been (slightly) increasing wages in an effort to land and keep good workers – work comp folks can expect more premium dollars, and likely more injuries as newly-employed workers tend to get hurt more often experienced employees.

Overall, the report is good news; more workers making more money means they spend more – a virtuous cycle.  BUT there are some economic headwinds. The strong US dollar is hurting exports which isn’t good for manufacturing.

The ACE – Chubb deal

Looks like “Hank Junior” is following in Hank Sr.’s footsteps; with the acquisition of perhaps the most respected brand in the P&C business, ACE becomes one of the largest insurers in the industry with a diverse portfolio of insurance lines, complementary distribution, and very strong management and culture in Chubb.

Notably, the new company will take the Chubb name.

There’s a LOT of press out there on this deal, most authored by folks with a lot more insight than I have.  My take is this is a smart deal for ACE; IF they don’t screw up Chubb and thereby damage a highly-regarded brand.  Evan Greenberg et al are too smart to do that; they didn’t pay a 30% premium for Chubb without clearly understanding why the company is worth it.

Healthcare reform

Lots of information out there re who’s newly insured, what they are paying, and related matters.

There are more uninsured men than women, and they have more problems accessing and paying for care.

There’s been a lot of talk about premium increases for next year – and that’s caused a lot of confusion. The latest data suggests that people with the most common plan – the lowest cost silver – won’t see those big price jumps. KFF reports a survey of the benchmark plans in 11 cities indicates an average premium increase of 4.4%.

The range is wide, from a 16.2% jump in Portland OR to a 10.1% decrease in neighboring Seattle (go figure).

BUT – there have been some big jumps in some markets, and pricing is all over the place.  Some plans have filed for increases north of 20%. Expect the marketplace to reward those plans that have held the line – and expect those plans to have narrow networks and hefty financial penalties for out of network care…

The reason there’s been so much talk about big price jumps is healthplans planning on raising premiums more than 10% have to report that to regulators early on; that generates a lot of buzz. Obviously, that buzz doesn’t take into consideration the plans that are NOT planning on big price jumps.

Much more on this in future posts.

There are a couple of really interesting work comp research reports that came out this week; I’ll be reading them on the plane back from Seattle today and report back to you, dear reader, next week.

Enjoy the weekend, and cheer for our women on Sunday!

My favorite day of the year

This year Father’s Day and the Summer Solstice fall on the same day – making for a very long day here in upstate NY with lots of daylight so I can loll around while being waited on (well, maybe not that last part).

While I was busy inundating your inbox with posts on the profitability – or lack thereof – of workers’ comp, a bunch of other stuff happened.

Another shot in the subrogation/third party liability battle was fired by Kentucky’s Medicaid program.  According to WorkCompCentral’s Ben Miller, hundreds of letters have been sent to work comp insurers in an attempt to ascertain if specific individuals’ medical care is due to a work comp injury.  The rationale is clear; Medicaid doesn’t want to pay for medical care it doesn’t have to.  As a taxpayer I completely support this.  Where it could get really sticky involves settled claims; if the work comp insurer/employer has settled the claim, my assumption (always dangerous) is the settlement requires the claimant to use those funds to pay for injury-related medical care.

What if the claimant doesn’t have any of the settlement dollars left?  If the claimant doesn’t pay, is the work comp insurer/employer liable? Who’s going to be stuck with the bill; the claimant?  the provider? Medicaid? another insurer?

Oh boy.

A terrific article in Harvard Business Review on what private equity investors do when they buy companies notes three distinct types of “engineering”; financial, governance, and operational.  Lots of insight, data, and examples make this a must read for anyone considering a transaction, or trying to understand how PE firms work.

Activity in the oil patch is slowing down, but claims counts are not going up.  Reuters quotes a Travelers insurance exec who’s a bit surprised about this; I have a call into Travelers to see if we can get more insight into the issue, and will share whatever I learn.

The new, updated Washington Guidelines for Prescribing Opioids for Pain are out; a product of the Agency Medical Directors (AMD), the new guidelines address opioid usage for many different conditions, cover special population issues, and update and expand a variety of treatment- and risk-assessment-related topics.  With five years’ experience under its belt, the AMD have learned a lot, lessons that other jurisdictions would be well-served to consider.

Finally, for many families in Charleston – and elsewhere – this Father’s Day is anything but joyful.  If I may be so bold, I’d suggest we strive to be part of the solution.