WTF’s with LA?

That’s Los Angeles, not Louisiana.

I ask that question, dear reader, because the latest report from the fine folk at CWCI raises yet another question about why LA is so different from the rest of California.

The latest information (available here for purchase; free to CWCI members) indicates cumulative trauma claims happen way more frequently in the LA Basin than elsewhere in the Golden State.


Are there millions of Angelenos doing manual data entry and getting carpal tunnel?


Getting wrist injuries from turning keys like those guards at the Illinois prison?

Hurting their hands clapping for all the Hollywood crowd?

Twisting their necks from constantly looking up at the gorgeous blue sky? (no, that can’t be it)

Too many botox injections? (that’s kinda cumulative trauma, right?)


Too much yoga?


It can’t be crooked physicians…right?



Live blogging on the DOL’s State Workers’ Compensation Forum

Geek alert!

For work comp wonks, in this post I’m reporting on what transpired at this morning’s meeting at DOL on Work comp; a summary and perspective will be the subject of a post tomorrow.

OSHA’s Director led off this morning’s presentation at the Department of Labor with a quick summary of the history of work comp, noting the death rate for WC declined from 37 per day to 12 per day over the last 40+ years despite a doubling of the number of people employed.

(note the statements below are paraphrased, some may not be entirely accurate due to lack of transcript available at the time of posting)

The written report is here for download. 

He also stated many injuries are NOT reported, saying workers’ comp is the ONLY element of the social net without federal oversight.  

Key paraphrased quotes:

  • Costs are shifted away from employers, and to workers, their families, and other social insurance programs.
  • The race to the bottom for workers comp among states has continued.
  • Potential policy initiatives are here.

NASI CEO Bill Arnone’s comments included:

  • workers’ compensation is a social insurance system that “needs work”
  • today’s work place is very different from 1908…
  • 3 million injuries and illnesses reported in 2014 – 1/3 represented time away from work
  • lack of uniform reporting of state experience
  • goal of workers comp- adequate wage replacement and medical care at reasonable cost – balance adequacy and affordability

Social Security’s Commissioner Carolyn Colvin was up next; notable statements follow:

  • 9 million disabled workers receive income from Social Security – plus 2 million of their dependents; averaging under $1,200 per month
  • for 1/3 of these workers, SS Disability Income (DI) income is their ONLY income.
  • if the full cost of workers injuries aren’t covered by workers comp, someone else is paying for those costs
  • recent changes in some states’ work comp laws may be shifting costs to SS DI and Medicare

The Commissioner was quite clear that Social Security is very interested in worker disability as shifting of expense to SS DI increases Social Security’s ultimate cost.

Secretary of Labor Tom Perez then took the podium.  Perez gave a detailed and passionate review of the formative years of workers’ compensation.  The Secretary noted that today, just as 80 years ago, state workers’ comp systems vary widely, AND, the Feds have “leverage” at the federal level for other social insurance programs including unemployment insurance.

Perez linked today’s work comp systems with those that led to the National Commission in the last century, starting with Texas opt-out as problematic due to low benefits. The Secretary also said:

  • you’ve got to win the geographic lottery to be taken care of due to differences among states
  • taxpayers are unfairly subsidizing a workers’ comp system that is not doing enough
  • DOL doesn’t have statutory authority to protect workers but we do have the bully pulpit.

A panel discussion began; speakers included John Burton, PhD, Professor Emeritus at Rutgers and former Chair of the Commission; Gary Franklin MD, Medical Director of Washington’s State WC Fund L&I; Christopher McLaren PhD of NASI, Emily Spieler, Professor and Labor Attorney, former Commissioner of WC in West Virginia.

Burton was asked for his views…at which time the broadcast went down for a few minutes. When we were reconnected, Burton provided a background of the Commission’s work, suggesting the standards represented a “floor” for benefits and other aspects of workers comp, and the decline in benefits was largely driven by state’s unfounded fear that employers would leave for more friendly locales.

Burton does not believe there is any chance federal standards will be enacted over the next 20 years, and can’t be developed because the world has changed so much.  Burton believes there is a “race to the bottom” once again, and this has resulted in states reducing benefits.

In a later segment, Burton noted there is a discrepancy between the NASI data and the Bureau of Labor Statistics’ data on employers’ workers’ comp costs; BLS data indicates employer costs are not going up, in contrast to NASI’s findings.

He also panned the AMA Disability Rating Guidelines, claiming among other things that they are completely non-evidence based, and suggesting the Institute of Medicine come up with a disability rating guide…I wholeheartedly disagree w Burton’s assertions about and denigration of the Guides.

Dr McLaren hit the highlights of the new NASI work comp report – copy here. Later, he noted that costs are going up now due in large part to the ongoing recovery from the Great Recession; costs tend to go up before the benefits paid catches up to the new workers’ new injuries. 

Dr Spieler was asked to identify the key problems in state workers’ comp systems. She agreed with John Burton that a major problem is states seeking to compete with other states, and:

  • many injured workers don’t apply for benefits and therefore don’t appear in NASI or other reports
  • some apply for benefits but don’t get them due to payer contesting the claim due to requirement that workplace was major contributing cause to the impairment.
  • are cash benefits adequate – there have been cutbacks in length of time patients can receive benefits, citing Oklahoma
  • patients exist in a “Kafka-esque” system, alarmingly complex and stigmatizing.
  • there’ve been statutory efforts to “cut back” on medical benefits
  • the goal of replacing 2/3 of pre-injury wages was and should remain a goal.
  • Oklahoma opt-out was mentioned multiple times

Gary Franklin MD PhD spoke about medical care in the system (note – Gary is a  friend and colleague)

Gary noted that unlike some states, Washington is in a race to the top.  He also said many payers don’t even have senior medical staff to help guide policy. For those who know Dr Franklin, it will come as no surprise that he used the term “evidence-based” multiple times in referring to formularies, lumbar fusion and other surgery, and disability.

A lot of the contribution to long term disability is due to baad medical care; workers’ comp medical care is among the worst medical care in the country,  Gary cited 32 deaths of workers comp patients who had low back sprains, got opioids, and were dying due to their prescriptions.  WA focuses on preventing disability three ways:

  • develop validated methods, tools, and instruments that docs can use to identify patients at risk for extended disability
  • using evidence based methods to develop treatment guidelines to prevent them from being injured
  • develop delivery systems to reorganize care to allow better care for injured workers, the Centers for Occupational health and Education – 50% of patients are going thru these Centers, which have helped reduce preventable disability by over a third.

Net – paying much more attention to technology assessments, evidence-based clinical guidelines, and preventable disability are all helping workers avoid bad care and prevent extended disability.  Gary talked about the horrible effects of lumbar fusion surgery and opioids – “a huge percentage of injured workers that are now on SSDI are on opioids, and that started in the workers comp system.”

The discussion went on from there, with a discussion of illnesses and how the system doesn’t adequately address occupational injuries, DOL’s views on work comp and the Gig economy, and the need for more research on occ injuries and illnesses sustained by Gig economy workers.

The issue of misclassification, and how states handle independent contractors, problems in the construction industry with labor cheating was raised by Burton – valid points all.

Workers’ comp: anecdote v data

A comment by David Deitz MD on last week’s post is well worth your read.  Referring to ProPublica, Dr Deitz said:

describing the use of guidelines and other evidence-based tools as a cut in benefits is not just misleading, it gets to the root of one of the central problems with much WC care

As Dr Deitz notes, what PP doesn’t grasp is this; evidence-based guidelines promote better medical care, and when work comp patients get sub-standard care, everyone suffers. .

Not just a few patients highlighted in a couple of headline-grabbing stories, but thousands victimized by lousy medical treatment. Today, many states do not allow or support the use of evidence-based clinical guidelines (which PP describes as a “cut in benefits”), and as a result many patients get crappy medical care.

Want evidence?

Data and the analysis thereof identifies these issues.

Outcomes data such as return to work, disability duration, functionality, sustained re-employment, re-injury rates differentiates good medical care, and providers who deliver that care, from providers who don’t.

Alerts based on potentially problematic treatment such as prescription of opioids without trauma or surgery, high incidence of surgery for patients with soft-tissue injury diagnoses, physical therapy scripts for patients without musculoskeletal injuries are based on data collection and analysis.

Dull stuff, huh?

Anecdotes are easy to grasp, get lots of attention, generate excitement, start politicians squawking. Data is, well, boring. Thinking based on data requires focus, concentration, effort, and a desire to understand.  Anecdote is quick, easy, and triggers emotions that often lead to simplistic and misguided conclusions.

That’s the briefest explanation I could come up with as to why work comp reform efforts are far too often sidetracked by issues/stories that, while concerning or even troubling, do NOT represent what happens the vast majority of the time.

What does this mean for you?

Make decisions based on data, not on anecdote.

The Department of Labor’s report on workers’ comp

Is set for release at a public meeting in Washington this Wednesday, October 5, at 10 AM. While the content has been closely held, sources indicate topics  include:

  • increasing inadequacy of benefits,
  • restrictions on medical care for injured workers,
  • new procedural processes and hurdles for claimants, and
  • the effect these trends have had on Social Security Disability Insurance.

There will also be a discussion of Opt-Out; DoL’s Employee Benefit Security Administration has been looking into opt-out alternative plans and their compliance with ERISA.

We do not yet know what the report will say about these topics, however a close reading of OSHA’s March 2015 report provides some clues.  Actually, the title alone may be predictive:


A paragraph from the report’s Executive Summary follows:

The costs of workplace injuries are borne primarily by injured workers, their families, and taxpayer-supported components of the social safety net. Changes in state-based workers’ compensation insurance programs have made it increasingly difficult for injured workers to receive the full benefits (including adequate wage replacement payments and coverage for medical expenses) to which they are entitled. Employers now provide only a small percentage (about 20%) of the overall financial cost of workplace injuries and illnesses through workers’ compensation. This cost-shift has forced injured workers, their families and taxpayers to subsidize the vast majority of the lost income and medical care costs generated by these conditions. [emphasis added]

Another paragraph speaks to under-reporting of workplace injuries and illnesses:

While the estimate of three million serious work-related injuries each year may seem extremely high, it is undoubtedly only a fraction of the true number. Numerous studies provide documentation that many, and perhaps the majority, of work-related injuries are not recorded by employers, and that the actual number of workers injured each year is likely to be far higher than the BLS estimate

The meeting, entitled the State Workers’ Compensation Forum (you can attend or sign up for the video feed by registering here) will include representatives from the National Academy of Social Insurance and the Social Security Administration (I am a member of NASI but have had no involvement with this initiative).

Suggestions and observations. 

  1. Remain calm.
  2. It’s important to read the entire report.
  3. Have an open mind.
  4. Under-reporting of claims is good news for the workers’ comp “industry” as it creates:
    1. more incentive for safety and loss prevention,
    2. more opportunities for vendors,
    3. more premium for workers’ comp insurers, and
    4. likely better outcomes due to professional management of injuries and illnesses by work comp payers.



ProPublica’s at it again.

ProPublica’s unethical “reporting” is being used in a PR effort to distort and demonize the workers’ comp industry.

An ethical journalistic organization would have sent a reporter to this week’s IAIABC conference, where they would have found 300 people all focused on improving a system that works quite well for the vast majority of patients and employers.

Instead PP’s “research” has been put into an “infographic“‘ that, by some unfathomable logic, attempts to link states’ occupational fatalities to a contrived, wholly inaccurate, and totally misleading “cut in benefits.”  (more on that here) What one has to do with the other escapes me.

PP defines “cut in benefits” as including, among other things:

  • adoption of utilization review and/or evidence-based clinical guidelines (can you IMAGINE!)
  • employer direction of care (to avoid patients going to pill mills and purveyors of fake surgical implants)
  • using outside medical reviewers to assess medical care
  • considering a patient’s pre-existing conditions in determining if an injury should be allocated to a specific employer

The mis-infographic is here, hosted on a law firm’s website.

Allow me to describe what a PP reporter would have seen if they’d bothered to attend IAIABC, the conference that, more than any other, digs into the issues PP seems most concerned about – how injured workers are treated by the work comp system.

They would have heard a terrific presentation by three physicians on improving the quality of medical care delivered to workers comp patients, followed by much discussion among regulators on how to increase the quality of care in their states and provinces.

They would have watched over a hundred regulators and other stakeholders work for four hours to develop an agenda for continued improvements in worker outcomes, safety, medical care, and satisfaction.

They would have heard countless hallway conversations about what this state or that state is doing to speed delivery of benefits, facilitate return to work, reduce friction in the system, and what other states might be able to learn from those efforts.

They would have heard a lengthy and detailed discussion about medical treatment guidelines, and a passionate debate about how evidence-based guidelines can improve the medical care delivered to patients.

They would have heard about an industry that is working every day to reduce the volume and potency of opioids prescribed and dispensed to patients – and having a LOT of success. (cue the totally false, dishonest, and self-serving BS from self-described “injured worker advocates” about how this is adding to suffering).

They would have heard a claims exec talking about his company’s policy on paying workers; NOT waiting to make absolutely sure a claim’s been accepted, but cutting checks to pay workers’ lost wages as soon as they think the worker will be out of work for more than a couple of days.


Why try to get the facts when it’s easier to gain pageviews by vilifying individuals who are doing their damndest to make things better?

It’s long past time each and every one of us stood up to this BS.  You – yes, YOU – need to promote, emphasize, publicize your successes.

The patient you helped find a new job.

The house you built to accommodate the paraplegic with a family.

The calls you made to that doctor to get them to change the script from Fentanyl to ibuprofen and physical therapy.

The visit to the plant to figure out why there’s been several recent shoulder injuries.

The time spent talking with state legislators about the importance of prescribers checking Prescription Drug Databases.

The multiple calls with the injured worker’s spouse, helping them understand and navigate the work comp system while listening to their fears and assuring them the check’s been cut.

What does this mean for you?

Sure, you can follow the usual insurance company playbook – don’t say ANYTHING because someone could misconstrue it.

THAT’s worked really well, hasn’t it?



Workers’ comp hospital costs – implications for payers

WCRI’s report on variations in hospital outpatient costs is yet more evidence of the wide and seemingly nonsensical variations in work comp regulations, fees, payments, and practices among and between states.

Among the findings:

  • an eight-fold variation in costs from the lowest-cost state – NY – to the highest – AL.
  • Shockingly, fee schedule states’ costs are a LOT lower than non-fee schedule state costs.
  • Costs in percentage-of-charge fee schedule states were much higher than those in states with Medicare-based fee schedules.

There’s a wealth of information in the report; here’s my takeaways.

Captain Obvious Alert.

In many states, workers’ comp is a huge profit generator for hospitals and health care systems.  Anyone following the drama in Florida surrounding “negotiations” around facility reimbursement in past years saw this play out in vivid color.

Hospitals are almost always much more politically influential than workers’ comp stakeholders, giving them a decided advantage in influencing legislation, and sometimes regulation as well.

As Medicaid and Medicare continue to clamp down on costs, hospitals and health care systems will get even better at maximizing revenue from workers’ comp.  Moreover, network discounts provided to workers’ comp payers are fading as payers realize the opportunity inherent in comp, and work comp PPO contractors confront the “yeah but you’re only 1 percent of my revenue” argument.

There is an entire industry devoted to revenue maximization; claims adjusters and bill review folks would be well-served to brush up on the techniques used by these folks. Here’s just a couple examples from quick research…

Considering the dollars paid to facilities and hospitals account for at least a third of work comp medical spend in most states, this is a big problem.

So, what to do?

  1. Analyze your data! Where are you spending your dollars – by state, facility, employer.
  2. Compare it to WCRI’s information – not just in this report, but the others these brilliant researchers have produced
  3. Direct, channel, refer – even in states where you don’t have an absolute right to “direct”, you CAN influence where your patients go to get care.
  4. Find and work with a medical bill review specialist with expertise in the specific states of most concern.
  5. Get creative – talk to your adjusters with long and deep experience to find out what works and what doesn’t.

Kudos to WCRI’s Olesya Fomenko and Rui Yang for their work – they’ve taken a shipload of data and turned it into information that’s understandable  – and actionable.

Tuesday update

Not to rub it into my friends and colleagues who are “working” in Orlando this week, but here in Montana it is 73, dry, sunny, and the mountain views are spectacular. Of course, flying into Bozeman isn’t nearly as…challenging as the obstacle course of strollers, elderly folks (my mom is 95, so don’t flame me), clueless travelers, little-kids-running-in-circles and mouse-hat-wearing families that is MCO.

While the attendees at the Montana Governor’s Conference on Workers’ Compensation won’t be partying to ThirdEyeBlind, these westerners have just as much fun at their annual confab as anyone.  Some have even more.  Film at 11.

I’m sure Bob Wilson will report back after his keynote talk here tomorrow; in what might well be a preview of the Clinton:Trump debate the esteemed WorkCompKing and I will be on the stage discussing matters of great import.  As we are the last session before the cocktail hour, don’t expect us to run long.

On to more serious matters.  And not much is more serious than the goings-on in California these days.

In California, we’ve learned that a big chunk of the liens filed are the work of individuals convicted or criminally indicted.  A total of $600 million in liens fall into this category, with a total of $2.5 billion – yes, that’s with a “B” – filed by “68 businesses comprising the top one percent of lien filers [who] filed more than 273,000 liens totaling $2.5 billion in accounts receivable on adjudicated cases between 2013 and 2015.” 

The Department of Industrial Relations’ summary goes on to note:

The assignment of liens by service providers to those who file and collect on liens are, in essence, the buying and selling of injured workers’ treatments and fertile ground for presenting fraudulent claims.  DIR’s review of filing dates indicates that lien claimants tend to wait until after the primary case is settled rather than seeking early resolution of medical necessity.

My interpretation – these scam artists are waiting to file until AFTER the claim is settled because they know full well the fiduciary just wants the damn thing to go away, doesn’t have the resources to fight each and every lien, and is better off paying off these crooks than fighting them.

These people add no value, deliver no service, help no one, and want to get paid for it.  

Here’s hoping California’s legislature jumps on this issue, prohibits lien filing by criminals and for denied claims.  Time is short…

Staying west for a minute, the fine folk at CWCI (Stacy Jones in specific) just published their evaluation of medical fees post-reform.  A main takeaway:

The amount of the reductions [below pre-reform utilization levels] varied by the type of care, ranging from 11.4% for radiology services to 49.5% for medicine services (comprised primarily of ancillary services such as cardiovascular, nerve and muscle testing, and psychiatric testing and psychotherapy), with an overall reduction of 17.7% in all medical services. At the same time, changes in total amounts paid under the schedule ranged from a 44.9% reduction in medicine services to a 12.7% increase in physical medicine services, for a net reduction of 14.3% in payments for all services. [emphasis added]

The implication is this – adoption of Medicare’s fee schedule has increased the volume of and reimbursement for cognitive services – talking with patients, rehabbing patients – and a reduction in payments for doing stuff TO patients; MRIs, nerve tests and the like.

This is good.

Thanks to CWCI’s Bob Young for the info and background.


The systems folks who do all the IT work on ManagedCareMatters updated our WordPress to the latest version last week, which led to a deluge of bounced emails from former subscribers with dead email accounts.  I’ve been ever-so-slowly cleaning up the subscriber list: this is a highly manual process, requires individually deleting a lot of addresses, and I’m absolutely sure I’ve screwed up and deleted addresses I shouldn’t have.

So, sorry about that.

This is going to take a little while, and in the interim I’m not going to be able to post as often as I’d like.  Hope to get this cleared up by the weekend, or I’m stuck sitting in front of a computer while my lovely bride and friends cavort on the lake.


Opioids – the cost of the drug isn’t the problem.

Opioid Dependence Leads To ‘Tsunami’ Of Medical Services, Study Finds

That’s the headline for a study that you – dear reader – need to read.

Here’s why – “Medical services for people with opioid dependence diagnoses skyrocketed more than 3,000 percent between 2007 and 2014.”

And that’s for privately insured people.  Based on research covering 150 million insureds, the report indicates the problem is particularly severe for younger men (19 – 35 year olds in particular).

We’ve all hypersensitive to the societal and personal cost of opioids, the Fair Health research is proof positive that the dollar cost of the drug itself is the least of the cost issues; dependency is strongly associated with much higher utilization of drug testing, overdose treatment, office visits and (my assumption) higher usage of other drugs intended to address side effects of opioids.

What does this mean for you?

Three thousand percent means you can’t afford to NOT address opioid addiction and dependency.


Work comp drug spend is going down

On average payers’ drug spend dropped 6.5% from 2014 to 2015.

And the bigger payers saw bigger reductions, with several cutting spend by double digits.

Those are the results for 30 large and mid-sized work comp payers I surveyed for CompPharma’s annual Prescription Benefit Management in Workers’ Compensation Survey.  State funds, large and mid-sized insurers, TPAs, self-insured trusts, and very large employers all participated in this, the 13th annual Survey.

The big question is – why?

Before we jump into that, allow me to address a potential criticism of payers’ drug management efforts.  This reduction is NOT because payers want to prevent their patients from getting the care they need.  Rather, payers – and their PBM partners – are focusing on ensuring patients get the drugs they need quickly and with minimal hassle, while blocking potentially problematic drugs.

This effort has paid off in the near term in lower costs for employers and taxpayers, and will almost certainly result in quicker healing and return to functionality; patients who don’t get unnecessary opioids get better a lot faster than patients prescribed these dangerous and often-misused drugs.

The Survey report, which will be out in August, will have details.  At this point in our analysis, several drivers seem to be at play here.

By far the most significant is the depth and breadth of pharmacy clinical management programs now in place at most payers.  The vast majority of payers rely on their PBM partners for most clinical management functions, with responsibility delegated to PBMs for some/most/all functions including:

  • patient enrollment
  • formulary development and management
  • prior authorization
  • pharmacist review of claims
  • prescriber outreach and follow-up
  • peer review and interaction
  • reporting
  • high cost claim assessment and intervention

This is somewhat unique in the work comp medical management world.  Unlike surgery, hospitalization, and other service types, most payers have delegated pharmacy management to PBMs.  There are several reasons for this.

  • Unlike other medical services, pharmacy is highly automated, requiring a unique electronic communication capability and expertise to accept, approve, process, and pay for the service.
  • Few payers want to invest the funds and management resources necessary to effectively manage pharmacy.  With the continued focus on reducing administrative expenses, overhead is an evil word at most insurers, so outsourcing it just makes financial sense.
  • PBMs have a lot more knowledge about pharmacy management as this is their core business.  Insurers, TPAs, and state funds have many other priorities on their collective plate, priorities that most view as more central to their core business.  They are insurers and claims handlers, not pharmacists.

That said, a handful of large payers have internalized pharmacy management – hiring pharmacists and nurses, instituting workflows specific to drug authorization, focusing on long-term opioid users, and tightening up drug formularies and approval processes.  These entities are also seeing solid payback on that investment, with costs dropping by double digits for these big payers too.

A final point that bears consideration.

Work comp PBMs, most of which are members of CompPharma (I am president of CompPharma), are doing a really good job and thereby reducing their income and profits.

They do this because this is how they win additional business; their value proposition is to ensure patients get the right medications and don’t get the wrong ones.

What does this mean for you?

PBMs are getting it done.

Work comp pharmacy – different indeed

The US spent $322 billion on outpatient drugs in 2015 – an 8.1% increase over the year before. (subscription required)

Over the next decade, CMS expects drug spending increases to outpace overall health care inflation by a significant margin at an average annual jump of 6.7%.

Things look remarkably different in the work comp world.

I’ve been surveying workers’ comp payers (insurers, state funds, TPAs, and large employers) for 13 years and the latest data indicates most are seeing a year-over-year decrease in drug spend.  I haven’t finished aggregating the data and checking the details, but this year looks like a continuation of the decreasing drug cost trend we’ve seen over the last several years (past Surveys available here).

More than 2/3rds of payers surveyed reported a drop in drug costs in 2015, and those that saw increases usually cited unique situations as primary drivers for those increases. Conversely, payers with decreases generally attributed their success to the same factors:

  • a strong focus on clinical management 
  • particular attention paid to opioid usage
  • ongoing, concerted effort to drive generic utilization

One other key driver – payers that work closely with PBMs on a variety of programs – retail network penetration, high risk patient identification, peer review, and outlier-prescriber outreach are seeing significantly better results.

I would note that work comp PBMs are spending a lot of money and resources to cut their revenues.  [I am president of CompPharma, a consortium of worker’s comp PBMs]

While there’s no question work comp can learn a lot from group health and other payers, the remarkable success workers comp payers have had in reducing the utilization of opioids shows that Medicaid and group health could and should carefully study what we’ve been doing.

What does this mean for you?

We are making progress, and work comp PBMs are leading the way.