Stone Point buys Genex – again

Case management/bill review/UR/IME company Genex has been re-purchased by Stone Point Capital; Stone Point sold the business to Apax in 2014. Takeaways are:

  • Stone Point really understands workers comp and the WC services business. The company is currently pursuing insurer AmTrust and own or have owned a number of companies involved in workers’ comp including:
    • Cunningham Lindsey
    • Oasis Outsourcing
    • StoneRiver
    • Sedgwick
  • Apax’ divestiture is likely NOT a signal the firm is going to break up or sell off OneCall Care Management. OCCM is deep into a systems conversion intended to tie the disparate businesses it owns together and the company just moved most of it’s home office people into a single location. Perhaps most importantly, OCCM’s debt is still trading well below par, an indication the investment is under water.
  • CEO Peter Madeja and the core of the senior management team will stay on. Peter is one of the finest people I know, universally liked and respected in the work comp community, and he and his team have performed well, keeping Genex growing in a declining market.
  • My guess is Genex will likely keep acquiring related businesses. These could include firms in the IME and MSA space as well as the occasional case management company. Mature markets require participants to grow via acquisition, a strategy Madeja et al have mastered.
  • I’d also expect some much bigger acquisitions. I don’t think Stone Point bought Genex to get into the case management and bill review business; these folks have bigger plans.

A couple of side notes...

Stone Point’s initial investment in Genex back in 2007 was reportedly about $56 million. 

One report indicated a source said that this time around, Genex sold for three times the original equity investment (note Apax paid for Genex with a combination of debt and equity). Without any detail or ability to dig into that, I have no idea if that is accurate or even likely.



Anything but simple

To the casual observer, the work comp bill review process is pretty simple:

  • make sure the procedure codes are appropriate for the injury,
  • compare the billed codes to the state fee schedule/allowable amount,
  • apply any reimbursement rules, and you’re done.

The real story is far more complex.  It’s no longer just about making sure the claim exists, the body part matches the medical report, and the procedure makes sense for the injury.

Reimbursement has gotten enormously complicated. Coding and code modifiers, bundled payment logic, clinical appropriateness, duplicate identification, relatedness, location of service verification, surgical groupers are just a few of the issues and considerations often unappreciated – and not considered – during the bill review process.

Far from A to B, it looks more like this – and is unique for some bills…

While some will say this is “not new news”, what is new is the constant focus and attention required to stay abreast of the ever-more creative and sophisticated “revenue maximization” industry. (That’s the label for provider-focused efforts to get as many payer dollars as possible)

I’ve taken a close look at several approaches/techniques intended to help payers keep pace with provider billing. One that caught my eye is Equian’s Clinical and Coding Logic. The folks at Equian were kind enough to spend a lot of time educating me on the research behind their Clinical & Coding Logic (CCL) solution, how it is used, and where it can have the most impact.

CCL has it’s roots in a commercial health application purchased by Equian some time ago, an application that has been adapted for use in workers’ comp. Building on that application, the company continues research to identify emerging billing practices, and develop identification techniques and rules to address those practices; to date more than 100 additional rules and millions of additional edits not found within typical bill review engines are in place.

There’s a LOT behind CCL; while I can’t provide more than a superficial overview, here’s a few things that popped up for me.

  • Diagnosis and procedure codes with a “low-likelihood”of occurring in work comp are flagged; when they appear medical records are reviewed in detail
  • Experimental and Investigational services typically fall thru the cracks in routine bill review processes; these have been identified and payment logic developed.
  • CCL includes identification of services that appear to be body-part related but actually address pre-existing conditions
  • Extensive research on the notorious 59 modifier enables reductions for inappropriate charges associated with surgery

Equally important is Equian’s ongoing research and analysis to identify emerging and previously unseen billing practices, development of identification techniques and rules, and evaluation of results.

CCL is a supplement to, not a substitute for the regular bill review process and technology. It requires data transmission to and from Equian via secure link, similar to PPO pend-and-transmit processes. Results shared by Equian demonstrate CCL is most useful for high-volume bill operations. Across the board, reductions average about $45 per bill (I was not able to independently verify savings or impact, and note that results are almost certainly highly contingent on each payer’s unique situation.)

What does this mean for you?

Never stand still.

Big pharma’s “not responsible” for the Opioid Disaster

Opioid manufacturers and distributors are “lobbying up”, spending almost $2.5 million dollars to lobby state Attorneys General over the last three years, likely in an effort to convince them to not sue manufacturers.

These millions allow manufacturers and distributors access to Attorney General meetings, where CBS reported their representatives spoke “on a panel, telling a group that they were not responsible for the opioid crisis, according to several attendees.”

Overa ten years, these distributors and manufacturers sent 21 million pills to a single West Virginia town, a town with a population of 2900 souls.

That’s around 462 tons of pills.

320 pounds of opioids for every person in Williamson, WV.

Two independent pharmacies – just a quarter mile apart – each got more than a million pills a year. The explanation offered by one of the pharmacies – that the pharmacy serves a much bigger area than just the town of Williamson – is beyond ludicrous. The entire county’s population is less than 27,000.

It gets worse…this from Gizmodo…

An investigation by the Charleston Gazette-Mail found in 2016 that almost 800 million hydrocodone and oxycodone pills were distributed throughout the state’s pharmacies from 2007 to 2012—a figure all the more astounding given that the state has only 1.8 million residents. [emphasis added]

That’s more than 400 pills for every man, woman, and child.

BTW, Purdue Pharma has made $35 billion from sales of Oxycontin.

How in the hell can distributors claim they are “not responsible for the opioid crisis” when distributors sent 2 million opioid pills a year to 2 pharmacies in a tiny town?

A new paper from University of Virginia researcher Christopher Rhum discounts many of the factors blamed by some for the huge spike in drug deaths, placing the blame squarely on the supply of opioids. According to The Economist, “The epidemic is caused by access to drugs rather than economic conditions.”

Of note, the owner of one of the Williamson pharmacies was quoted saying: ““All the prescriptions we filled were legal prescriptions written by a licensed provider,”

Tomorrow, an interview with a licensed provider.

Thanks to Liz Carey of for her story on this.

Disruption of the US “healthcare” “system” is starting

Today’s announcement that Amazon, Berkshire Hathaway, and JPMorganChase are forming a new entity to deliver health benefits to their workers may well be the harbinger of massive change to come.

credit Collaborative Lab, Rachel Botsman

While many details are to be determined, the new company will be:

“free from profit-making incentives and constraints” and

“The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost,”

Here’s what I see as key factors.

  • These three giants have intimate knowledge of health insurers and healthcare providers. The biggest takeaway is they have determined insurers and providers are not performing today, and will not perform tomorrow. 
  • Amazon is a delivery machine – and knows way more about us than we do. The company knows logistics better than any other entity; it is also a world leader in analytics and “behavioral understanding.” Add in the Echo, and it’s current presence in and knowledge of tens of millions of American homes is a huge asset.
  • JPMorgan Chase is a financial empire that deeply understands investments, financial drivers, banking and fund flows. It has massive capital – $2.5 trillion in assets – a giant consumer banking enterprise, and brilliant people.
  • Berkshire Hathaway is huge, diverse, enormously well regarded, and very well run. BH brings perhaps unmatched management capability to the partnership, as well as multiple insurance assets staffed by people who understand risk.

Notably, stock prices for healthplan giants UnitedHealthcare, Anthem, and Aetna – and others are down 5 percent this morning, with analysts crediting the announcement for the damage.

It’s critically important to note that the companies that have dominated the healthplan industry for decades are, in the view of three dominant firms, not performing. In fact, their performance is poor enough that the three CEOs all noted they don’t have all the answers, the implication being they believe they can do a better job than the supposed experts.

The release is here.


Telemedicine – where next?

MCM’s Telemedicine Week continues with a couple more use cases and a quick summary of where things are going – with the caveat that we’re only just beginning to understand what this is, how it can be used, what the obstacles and limitations are, and how accelerating technological changes will affect tele-…

First up, CHC’s white paper authored by colleague Peter Rousmaniere. CHC has a broad suite of tools used for everything from recorded statements to triage to initial clinical “visits”. The case study discussions provide a glimpse into the future, as there’s a lot of crossover between and among the use cases.

HSA consulting client MedRisk launched it’s telerehab program last year, and takeup has been strong. To date, patient reaction is quite positive, driven in large part by high satisfaction from one-on-one interaction between the patient and therapist. The white paper provides a detailed review of everything from technology to applications; a wealth of references are cited for those interested in more detail.

From here, where?

  • Wearable technology has yet to be incorporated into services, but I expect it will be soon. Devices that track range of motion, force, and acceleration will be used to monitor home exercise and help assess patient readiness to return to work.
  • Other devices will assist in diagnosis and patient monitoring, alerting both patient and clinician to potential problems or conditions that may affect recovery or determine treatment paths.
  • Peer reviews can be improved by virtual visits, enabling the peer review physician to interact with the patient without the expense and hassle of meeting in person.


  • Represented patients may be loathe to schedule tele-visits if their attorneys don’t understand or support tele-services.
  • Regulations are going to be playing catch-up for the foreseeable future. Issues related to reimbursement, admissibility, liability, confidentiality and the like will take time to work through.
  • Change aversion will be the highest and toughest barrier. We all know workers’ comp can be hidebound and kludgy, with participants looking for “reasons why not rather than opportunities to.”

All that said, the more we learn about tele-services, the clearer it is that this is going to be a major change driver.

What does this mean for you?

Get with it.



Telemedicine – Coventry’s approach

A few weeks ago I had the opportunity to virtually sit down with Coventry’s product development folks to hear what they’ve been doing with tele-. 

I checked in again this week, and here’s what they’ve been up to. Quick take – tele-triage is gaining traction, while patients are slower to agree to do virtual office visits.

Coventry, a provider of services ranging from networks to pharmacy benefit management, case management to durable medical equipment, is well into Phase One, of their telemedicine offering which is tied into Coventry’s Nurse Triage program, NT24.

Working with technology vendor KuraMD  Coventry’s nurse triage staff connects with the patient, evaluates the injury or illness, and, based on their findings, recommends an appropriate level of care whether it be self-care, a “live” visit with a clinician, or a telemedicine visit (urgent and emergent cases are identified at call onset). Diagnosis and other factors drive the recommendation.

While the program has been in place for the better part of a year, Coventry has found many customers have yet to embrace the telemedicine office visit. Customers have “a tough time thinking of this as an office visit.” Telemedicine providers provide initial visits where they can send patients to physical locations for physical therapy or for imaging studies. While TM follow-up visits are offered, to date most employers want patients to visit a provider for those follow-up visits.

The program is live with two TPAs; a total of 10 employers have been implemented to date nationally with 4 in single states. Employers are quite diverse, including labor, retail, temp staffing, and construction.

For those patients able and willing to use telemedicine for a virtual initial visit, Coventry uses providers contracted with KuraMD. Care coordinators initiate the tele-visit, ensuring the patient has the right technology, walking the patient through the set-up and sign-on process, then passing the patient to the clinician for the visit.

Concentra will also be working with Coventry in the future

Phase Two involves broadening the number of clinicians that can provide telemedicine and also offering telemedicine visits without the nurse triage component. As one of, if not the largest workers’ comp PPOs, Coventry is working to get information to the company’s contracted network physicians to educate them about the service and requirements, discuss compensation, and provide training. The credentialing process and standards are identical to the company’s “regular” network but there are more questions regarding state licensing to ensure compliance with state regulations.

Down the road, Coventry is looking to incorporate tele- into case management. Ideally, case managers would connect with the patient, provider, and/or employer via video conference and enter information in real-time into the company’s proprietary CM IT system. There’s much work to be done connecting with claims systems to identify the types of and format of information needed by adjusters, build data feeds, and separate out key bits of data that need an adjuster’s attention.

What does this mean for you?

Expect tele-visits to gain traction as patients use similar services for family members and their own care. Telemedicine is moving quickly in group health, and this will accelerate adoption in comp.



In the 30+ years I’ve been around the workers’ comp industry, there hasn’t been anything truly disruptive, until now.

Telemedicine, telerehab, teletriage are just three of the ways technology will enable remote delivery of services to injured workers and other key participants in the injury recovery process.

The implications are broad and deep, as are the challenges.

The implications are robust; Faster access to care. Quicker determination of compensability, causation, and relatedness.  Deeper understanding of psycho-social factors. Stronger rapport with employer and patient. Instant access to information for adjusters and case managers. Better tracking of patient compliance with physical therapy and home exercise.

The challenges are many: Do patients and providers have the necessary technology. Are connections secure. Do laws and rules allow for/support/enable tele-everything. How and who will get paid how much for what. What jobs are at stake. How will service providers adapt to tele-everything, and can they.

And this isn’t touching the implications implicit in the adoption and use of Artificial Intelligence, which will revolutionize most of what is done in our industry.

We’ll focus on tele-everything this week, with interviews with several of the early adopters.



What’s going on with health coverage for poor kids?

The current clustermess in DC around keeping the government funded is just bizarre.

What’s most bizarre is politicians are holding poor kids hostage, which is the only way to describe what is happening.

Republicans are refusing to consider legislation – requested by the President – to address DACA as part of the budget resolution. This is a core requirement for many Democrats, as is long-term funding for CHIP.

Background – CHIP has long been a bi-partisan program, championed by Sen Orrin Hatch R UT among other staunch conservatives. It provides insurance for poor kids and pregnant women, and has been funded for decades with nary a blip. Till now.  CHIP has been unfunded since October; most states are about to run out of residual funds, which would throw about 8 million poor kids and pregnant women off the program – and leave them with no insurance. 

This makes no sense.  If the Childrens’ Health Insurance Program is re-authorized for a decade, it SAVES $6 billion.  There is NO fiscal reason to NOT re-authorize CHIP, just a political one. The GOP is using the re-authorization in an attempt to force Democrats to support a budget proposal that is anathema to many Democrats – and more than a few Republicans as well.

It appears likely that we’ll be forced into a government shutdown over this, which will end up costing taxpayers a LOT more money than if the party in power had just passed a budget months ago as it was supposed to.  In case you aren’t as nerdy as your author, there have been four separate continuing resolutions to keep the government funding since Trump was inaugurated – and there are NO plans by the Senate Appropriations Committee to discuss a budget for this year – or next for that matter.

Moreover, the Committee, which is dominated by Republicans hasn’t even bothered to hold a vote on a budget over the last year.

If this stuff makes you nuts, well, it should.

What does this mean for you?

Be very thankful you aren’t a poor kid.  And really mad about what this idiots are doing to poor kids. 

WCRI is just around the corner

Had a chance to sit down with WCRI CEO John Ruser a couple weeks ago and get his take on the Institute’s Annual Meeting, scheduled for March 22-23.

For those who have yet to attend WCRI, get yourself there this year…and unlike other conferences, attendance is limited.

I’d strongly encourage you to register now if you haven’t already…

MCM – What’s going to be different about this year’s conference?

JR – We are going to start with a focus on the future – Dr. Erica L. Groshen, former Commissioner of Labor Statistics and head of the U.S. Bureau of Labor Statistics will open with a discussion of the changing workforce and technology’s influence from the perspective of a labor economist, more about what is going to happen.  The theme throughout the conference is we will revisit that.  The Sedgwick Institute’s Dr. Rick Victor (former WCRI CEO) will speak to the challenges facing work comp system including the changes in the workforce, We will close with a panel discussion to hear from different perspectives on this theme.

MCM – Why this focus?

JR – There’s been an acceleration in the rate of change in the workforce, we thought it was time to bring that topic into the conference and bring it to bear on workers’ compensation in particular, it’s time to start considering this in our conference. I anticipate there will be discussion of potential impact of these changes on claim frequency and claim severity.

MCM – Any teasers you can provide on what those trends might look like?

JR – In general, what’s going on in the economy in the labor market is the substitution of capital for labor; capital we used to think of as heavy machines, now it’s software and computers are driving the trend where high risk jobs will go away because of substitution of capital for labor.

Since I’m an optimist and this has been happening for 150 years or so, I believe new jobs will spring up, the question is what does that mean for workers’ comp. Along with that is the change in the employment relationship typified in part by Uber, but its gong to be amore general aspect of the labor market where workers won’t necessarily be attached to employers in the way they were before. That certainly creates challenges for workers’ compensation.

MCM – The implication is that insuring occupationally related injuries and illnesses is going to fundamentally change, is that fair?

JR – It certainly will change.  We’ve seen a quarter-century of declines in OSHA reportables and claiming rates, there is a notion the workforce is changing so there aren’t as many claims as there were in the past.

MCM – There is some indication that wages are heading up in some states, but given the substitution of capital for labor, that means folks in low wage jobs are not going to see increases in pay. For that and other reasons is it likely we will see medical expenses continue to increase as a percentage of claims?

JR – This is the area that Dr Groshen is going to get into…There are other factors as well, new technology that will help workers recover faster or even survive accidents that they wouldn’t have before. With that comes higher medical costs. Advanced prosthetics allow injured workers to function better, and while costs will go down over time, for now those devices are quite expensive.

MCM – Is there going to be discussion about Artificial Intelligence and the role that is going to play?

JR – Yes, that is likely to come up. There are lots of other topics, for example are we ready for value-based care? We are doing work interviewing stakeholders to determine if we are ready for that, and that will be a discussion topic at the conference. We have a session on opioids and the impact of opioids on return to work. The National Safety Council and a large employer will talk about the issue of opioids in the workplace.

Fee schedules, prices, and access to care is always a topic of interest. We will be looking at this, in particular comparing group health to workers’ compensation in several areas including delays in accessing primary care and other types of treatment.

The agenda is here.

2019’s conference will be in Phoenix…

Why your “predictive analytics” program isn’t working

I’m hearing more complaints and concerns about the lack of results from projects involving “big data”, analytics, predictive modeling and the like. These have me scratching my head, as effective use of data is critical to any enterprise these days.

I think I’ve figured out why some of these projects haven’t turned out the way sponsors want.

An excellent article on the effective use of analytics identifies 6 keys to ensuring success hit my inbox a bit ago and I’ve read it seveal times, passed it on to respected colleagues, and gotten their feedback.

Targets and accountability. The Central Analytics Business Unit (ABU) was set up as a centralized profit center with ambitious targets and with direct reporting to the chief operations officer;

Support from the top. Obvious, critical, and bearing repeating.

Incentive scheme alignment. The returns generated by ABU’s analytics projects accrue to the departments, who do not contribute to the cost of the ABU. And the ABU team is paid using variable compensation, based on projects that have been fully implemented and based on their ROI.

Rigorous assessment of results. The contribution of analytics is always measured and in some cases is reviewed by the accounting department.

Communicating with strategic goals in mind.  The ABU emphasized communication

The right people. Recruited employees had:
(1) significant quantitative strength;
(2) negotiating skills and diplomacy;
(3) the ability to communicate with the business lines; and
(4) entrepreneurial instincts. Recruiting this high-demand skill set was not easy.

Most of the initial ABU recruits were external hires, and several of them had little knowledge of the banking industry.

BUT…information without action is nothing but a waste of time and money.

This from a physician executive colleague:

One of the things they don’t discuss that I see as an issue throughout the insurance industry (commercial as well as WC) is that analytics often produce counter-intuitive results, and/or suggest conclusions that are at odds with what passes for traditional wisdom.  

An example – I had 3 years of analytics (pretty good ones, too) that demonstrated a 5 or 6:1 ROI from the medical directors’ department (and that included all costs, fully loaded salaries, etc).  No one would believe it, and they dismantled the whole operation.  So, what I’d add to the HBR piece is that the CEO championing (which is one of their 6) has to include championing of business plans based on the analytics, no matter how uncomfortable that makes some people.  

Think analysis of the true costs of network discount strategies is going to be well received anywhere?