May
31

More hospitals are going to close

More than a quarter of rural hospitals in Texas, Kansas, Mississippi, Alabama, Georgia, South Carolina and Tennessee are at immediate risk of closing. 

Notably these are all states that have refused to expand Medicaid and therefore have a lot of people without health insurance.

The problem is exacerbated by the end of the Public Health Emergency which means more people without health insurance will be seeking care at hospitals at imminent risk of closing. 

Check out your state’s situation here

What does this mean for you?

If you live in the rural south, stay healthy, don’t have an accident, and don’t get pregnant.


May
2

Just the facts: Medicaid and work requirements

House GOP members are pushing to add work requirements for Medicaid recipients.  This makes sense, right? They are getting taxpayer-paid benefits, and should be:

  • working or
  • looking for work or
  • in school preparing for work.

Let’s see…

First, most Medicaid recipients are totally disabled (according to Social Security), are pregnant moms or moms and new babies or are poor older folks.

Among recipients that are none of the above,

  • 3 out of 5 are already working
  • 1 out of 5 are in school or are caregivers for family members

Of the remainder, at any one time more than half not working because they are sick or disabled.

Which leaves just 7 percent of which most are:

  • retired or
  • can’t find work (often because they have no transportation).

Are there freeloaders? of course…there will ALWAYS be cheaters, like my former neighbor who owned millions of dollars of real estate and bragged about how he had great free insurance from Medicaid. (Yes I turned him in).

source KFF

Oh, and the Supreme Court has weighed in...dismissing pending appeals in cases that had found work requirement approvals unlawful. This ruling essentially confirmed lower court rulings against work requirements.

What does this mean for you?

It’s really easy for we relatively well-off, college-educated, financially-stable professionals with good jobs, internet access, cell phones and employer-paid health insurance to complain about “freeloaders”…

who are/have none of the above.

 

 


Apr
18

Private Equity healthcare investment in 2022

Private Equity healthcare investment declined sharply last year as the average deal’s value and the number of transactions both fell off.

Firms invested over $45 billion in 167 US healthcare deals last year – a pretty massive decrease from 2021’s 216 deals for $107.5 billion.

While 2022 started off quite strong, deal volume halved in the second half of 2022 due to interest rate hikes, tighter credit, economic concerns and Putin’s War.

Those are the headlines from Bain & Company’s Global Healthcare Private Equity and M&A report 2023 (download for free here.)

note – I have worked with Bain entities in the past, respect the firm and the Bain people I’ve worked with. I am not currently working with Bain.

key highlights…

  • Provider sector deals accounted for about half of all transactions and dollars invested…but slowed dramatically to 7 transactions in Q4 2022
  • IPOs pretty much disappeared in 2022 (initial public offerings, when a private company goes public)
  • Value-based care and primary care were a big focus of strategic buyers…
    • Optum bought several provider groups
    • Amazon acquired One Medical
    • Humana and Welsh Carson did a joint venture, investing in a value-based primary care company.

There’s a lot on value-based care…although there’s precious little evidence that it is a panacea, investors are still betting billions …From the report:

For more than a decade, value-based care (VBC) has been positioned as healthcare’s “next big thing.” And while progress has been uneven 

The number of accountable care organizations (ACOs) plateaued at around 1,000 in recent years, while 15 of the 53 entities participating in CMS’s direct contracting program in 2021 experienced net savings losses. 

Value-based care stakeholders are doubling down on their commitment as healthcare spending outpaces GDP growth and CMS leans further into VBC models. 

What does this mean for you?

Expect PE investors to remain quite cautious until interest rates stabilize, the debt ceiling is raised (or much, much better – eliminated) and inflation trends level out.

Warning – if House Republicans don’t raise or eliminate the debt ceiling there will be hell to pay. 

Register for Bain’s webinar on the report here.


Mar
28

Medicaid, workers’ comp claim severity, and healthcare deserts

Medicaid is the second largest payer in the US, with spending approaching three-quarters of a trillion dollars this year.

In 2023, workers’ comp medical spend will be around $32 billion – just over 4% of Medicaid.

Medicaid is a major payer for many facilities in poor and rural areas, a financial lifeline that is thin indeed.

Ten states have yet to expand Medicaid, an ethically- and financially-unconscionable failure that has major repercussions for workers’ comp, poverty, child health and healthcare access (two – SD and NC – are in the expansion  process).

Access to care

Most rural areas in those 11 states were already hospital deserts; that will get a lot worse as over a third of rural hospitals are in those eleven states.

Average operating margins, razor thin before COVID, recovered somewhat during the pandemic but will turn negative as the pending Medicaid disenrollment takes effect.

More hospitals and their emergency and trauma units will close. Today in 40% of US counties most patients are more than an hour away from a trauma center…as more rural hospitals close even more trauma patients will be further away from hospitals.

What’s known as the “golden hour” is the first 60 minutes after an injury, when healthcare can save lives, limbs, and livelihoods.

What does this mean for you?

Claim severity will increase in those ten states. 

note – reminder, Saturday is April 1…beware.


Mar
24

Good stuff I missed this week…

For the first time in forever I missed WCRI’s annual confab…a Board meeting conflicted darn it.

Thanks to Stuart Colburn for his comprehensive reporting from Phoenix...I hereby give up my as-it-happens blog-casting role to the estimable Mr Colburn Esq. (subscription required)

WorkCompCentral’s Yvonne Guibert and Rafael Gonzales dropped a most informative podcast today. Dr Les Kertay is the guest, and his discussion of mental health is one you need to listen to while out walking, cleaning the house, doing laundry, driving kids around or gardening.

Excellent piece in Harvard Business Review about the role of robots in customer service. Yeah, I mostly hate them too, but more and more insurance interactions involve robots.  While HBR focuses on more “retail”-focused robots, there’s much in the article worthy of your consideration.

One takeaway…”Robot technology should not simply be added as a novelty, but carefully integrated to deliver value to customers and support employees — maintaining a balance between automation and human interaction…”

Here’s another you have to read…it’s about customer service in government. No, that’s not an oxymoron. And btw, anyone in healthcare or insurance shouldn’t be throwing stones at the dam’ gubmint’s customer service…

This has major impact – most dramatically on the less fortunate among us. Stuff that we wealthier folks take for granted – internet access, smart phones, reliable wifi, reliable transportation literacy…is usually NOT commonplace among poorer folks. Oh, and the research very, very much applies to insurers and health plans…

From HBR:

If you’re working on making communications more “efficient”, make VERY sure you always start and end with the “communications” piece – NOT “efficiency”.

Regular readers will recall  Medicaid is about to drop a LOT  – as in 5 to 14 million moms, babies, disabled folks, grandparents and families from its rolls, and many states are going to force those beneficiaries to use electronic communications to prove they qualify.

I’d like to think they are doing this out of ignorance, but my instinct – and research – indicates many state regulators and legislators are doing this purposefully – to deny health insurance to people who desperately need it.

More on this here.

What does this mean for you:

Meet people where they are. And be kind.

 


Nov
3

Republicans planning to force Medicare cuts

House Republicans are planning to impose massive cuts to Medicare, raise Medicare’s eligibility age, and withhold payments to early retirees and retirees earning more than a certain limit.

News sources indicate the GOP will use the upcoming debt limit to try and force Medicare cuts, a reprise of earlier efforts supported by 175 House Republicans to slash Medicare spending. The effort is also gaining traction among Senate Republicans, with Senator Lindsey Graham planning to use the Republicans’ leverage in Congress to cut Social Security and Medicare.

Sen. Rick Scott’s 11 point plan goes a lot further; it would end Social Security and Medicare if Congress doesn’t take specific action to renew those programs every few years (see Scott responding to Fox News question at 1:09 of the video here.)

You may well recall that Scott was sued for Medicare fraud back when he ran Columbia/HCA. Columbia/HCA was ordered to pay the Feds $1.7 billion in fines and penalties.

What does this mean for you?

If you and/or your parents are on Medicare, this means a lot. 

 


Sep
26

Watch out for gabapentin…

The CDC recently reported gabapentin was involved in one out of every ten fatal overdose deaths in reporting states.

Similar to opioids, gabapentin can cause severe breathing difficulties  – which are exacerbated when the drug is combined with other central nervous system depressants (CNS) (e.g. opioids, antidepressants, antianxiety meds).

Illicit use of gabapentin appears to be on the rise…from JAMA:

Gabapentin can produce feelings of euphoria and intoxication and can potentiate opioids’ effects. Individuals who misused the drug reported multiple reasons in a 2019 study, including a desire to enhance the effects of opioids; to achieve a “high” when preferred substances were unavailable, such as when they were living in a treatment facility or were incarcerated; or to self-treat withdrawal or pain. [emphasis added]

Gabapentin is a non-scheduled drug which became much more widely prescribed as opioid scripts declined.  Back in 2018 one out of five chronic pain patients were prescribed gabapentin (or its cousin, pregabalin). There’s some evidence that misuse of gabapentin – which is almost always prescribed off-label – often occurs after the consumer had a prescription for the drug.

And, Parke-Davis, manufacturer of Neurontin – the brand name version of gabapentin – pleaded guilty to promoting off-label use and paid a $430 million fine.

So, what to do?

First – learn more.  Start here – myMatrixx’ Shanea McKinney, PharmD penned an excellent overview way back in 2019.

Then…

  • Dig into your data – what’s been happening with gabapentin?
  • When and where possible, require prior authorization for gabapentin and similar drugs.
  • Educate patients and caregivers about potential risks of the drug.
  • Pay special attention to patients prescribed gabapentin off-label and in combination of other CNS depressants.
  • Consider recommending urine drug testing for gabapentin patients and include it in  the drug test panel.

What does this mean for you?

This looks awfully familiar. 

 


Aug
8

The Inflation Reduction Act’s biggest loser

For the first time in about forever, big pharma lost.

One can’t overstate the impact of the-about-to-become-law Inflation Reduction Act on pharma. The most powerful lobbying force in Washington got steamrolled – with one major exception.

Medicare will now be able to negotiate drug prices, a change that will lead to massive savings for seniors (a group I will join next year) and taxpayers alike. This didn’t come without a last-ditch effort by a horde of suits invading the Senate and House…but for once, the invasion was turned back.

Medicare part D was a huge taxpayer gift to big pharma as it covered seniors’ drugs while not allowing Medicare to negotiate prices. This was a giant boondoggle; Christmas, birthdays, anniversary and graduation presents all rolled into one 20 year giveaway. (historians will note this was entirely driven by Republicans – and added $9.4 trillion to the ultimate Federal deficit)

Imagine if you could a) add a huge new market for your services/products and b) set your own prices…why…you could buy that baseball team you always wanted!

Well, at least the insulin manufacturers won. Republican senators blocked a provision which would have capped diabetics’ monthly insulin costs at $35. 

1 out of 7 Americans that need insulin spend more than 40% of their income after food and housing on the drug.

What does this mean for you?

Just when you thought Washington couldn’t do anything – it does something really big and really important. 


Jun
17

Things work comp can/should learn

In addition to my focus on work comp medical management I’m deeply involved in governmental programs (Medicare/Medicaid/dual eligibles) and related businesses.

Here’s a few things work comp would do well to understand/explore/pursue.

  1. Auto-adjudication of medical bills – the standard target for auto-adjudication of medical bills is 90%.  That’s far higher than any workers’ comp bill process, and about twice as high as the average.
  2. Medical bill turn-around time (TAT) – average is at or below 20 days from receipt of complete “claim” (defined as a medical bill and needed documentation)
  3. Administrative expense ratio – <10%. yes, I understand work comp is a lot more litigious, blah blah blah. But seriously – 28-35%??
  4. Value-based care – is taking over the big governmental programs and corporate plans as well. Yes there have been a ton of misjudgments, errors, problems and failures, but make no mistake – in the near future VBC will be the dominant form of contracting and basis for reimbursement. (those who declare VBC isn’t going to happen in work comp may want to look outside their bubble)
  5. The impact of provider consolidation – this is one area where recent articles/briefs/research are starting to scratch the surface – but only just. Reality is consolidated markets are much more expensive and WC payers have way less ability to “manage” care in those markets. WC needs to get a whole lot smarter and more agile.

Whether this actually happens is up in the air. We veterans with decades in this business recall all too well what happens to claim counts/claimdurations when recessions hit.

What does this mean for you?

This is rarely helpful.


Nov
4

Reimbursement is changing – nerd alert…

CMS – aka Medicare – has published details on the pending cut to physician reimbursement and some physician groups are howling.  The cuts aren’t uniform; Any changes to the fee schedule done via rulemaking must be budget neutral; if some payments go up, others must go down.

Overall reimbursement is slated to drop by about 4%.

Surgery and radiology are two of the specialties especially vocal about the changes, which MAY be altered or retracted if Congress passes a law revising the reimbursement change.

(Details on this are here…)

A couple other things of note…

  • Of interest to workers’ comp are new codes (CQ and CO) and payment for services rendered by PTAs and OTAs supervised by PTs and OTs at 85% of the PT/OT rate. there are modifiers and time requirements, so make sure your BR entity has got this coded correctly.
  • The CPT Codebook listing of bundled services are not separately payable.  I’d note that this is NOT universally understood by work comp bill review entities; yes it is complicated and yes it changes, so payers would be well-advised to make darn sure they are handling these bills correctly.
  • Critical care services may be paid separately in addition to a procedure with a global surgical period if the critical care is unrelated to the surgical procedure. Again, this is why reviewing provider notes is key, because facilities/practices often bill these separately in the hope that the payer won’t catch the “unrelatedness” issue. Separately, a denial of payment for critical care services should NOT result in an additional fee to the payer; that is basic bill review – or should be. Also, watch out for PPO fees attached to those separate charges – BR and PPO companies make money on those “reductions” while they DON’T make more $$ on just denying the critical care service as part of a code review.

So, what does this mean/what are the implications?

Watch out for creative billing/increased utilization as providers look to make up for lost revenue/lower reimbursement from Medicare and Medicaid.

Ensure that A)  your bill review program is prepared to handle these changes and B) you aren’t paying extra for that “management.”

(for more on the issue of how Sequestration effects reimbursement, go here.)