What Maryland SHOULD be studying

Three weeks ago a group of stakeholders in Maryland decided physician dispensing wasn’t that bad [scroll down in link].

These stakeholders agreed to not do anything legislatively to address doc dispensing for another two years because their own analysis had indicated physician dispensing in MD was not changing.  Now, a lobbyist for physician dispensing “technology” firm Automated Healthcare Solutions has penned an opinion piece that can only be described as a hit job on WCRI, a highly respected research organization.

There are two related problems here.

  • It’s obvious the doc dispensers’ strategy is to try to discredit WCRI – no other reason to publish an editorial in a paper in a state that you’ve already won.
  • The stakeholders that signed the letter agreeing to forgo any legislation ignored research from Johns Hopkins University (located in Maryland) proving physician dispensing is associated with much worse patient outcomes.

I won’t dignify the lobbyist’s moronic prattling with a point-by-point rebuttal; WCRI already has in the measured, professional, and very precise way that is the hallmark of academic research. Suffice it to say that the lobbyist’s own writing shows he is even less knowledgeable about statistics, research standards, and data analytics than our Newfies are.

This guy calling out WCRI on statistical analysis is akin to me telling Blake Shelton he doesn’t know the music business.

Next, in a letter citing the Maryland Workers’ Compensation Commission, the stakeholders asserted “contrary to previous trends reported by the Workers’ Compensation Research Institute, Maryland claimants received a smaller proportion of prescription drugs dispensed directly from their physicians, as compared with prescriptions dispensed from pharmacies.”  After much review, my conclusion is this – there are differences in the methodologies used by the MWCC and WCRI – but those differences do NOT mean WCRI’s work is wrong.

First, the data collection process the stakeholders used to come up with their conclusion is not as rigorous as it could – and likely should – have been. For example, they asked multiple sources for data on physician dispensing, but failed to provide tight criteria or definitions for these sources to categorize the data. As a result, the findings are questionable because the sources may well have:

  • used different criteria to identify “physician dispensers”
  • used different definitions of “repackaged” drugs
  • differing ability to identify what entity dispensed a drug
  • differing ability to differentiate between physician-owned “pharmacies” and retail pharmacies
  • different definitions of “generic” and “branded” drugs

Second, the MWCC analysis used an entirely different methodology than WCRI, a methodology that, among other factors, included different time periods and a different set of claims.  It is NOT surprising that different data sets, different methodologies, different time lines yield different results.

On its own initiative, WCRI used the stakeholders’ methodology in an attempt to understand the discrepancy, with the following result:

When we replicate the data and methods used by the Commission on the data used in our Maryland draft study, we get 16.7 percent where the Commission reported that 15.7 percent of prescriptions were dispensed at physicians’ offices. Hence, when we use similar methods on different data sets, we get similar results.

Ignored in the lobbyist’s “editorial”, and by the stakeholders as well, is this:

In the last published WCRI study on this topic, Maryland was compared to 20 other larger than average states. We found that physician dispensing in Maryland was more frequent than in 17 of these 20 states—twice as common as in the median state, [emphasis added] and four times more frequent than in the neighboring state of Virginia. 

Rather than get into a “mine’s better than your’s” conversation, here’s what we know.

There’s no question Maryland has a very large physician dispensing problem – one that all the research indicates is likely driving worse outcomes for patients and higher costs for employers and taxpayers.  The really troubling thing here is the stakeholders know, or should have known outcomes may be significantly and adversely affected by doc-dispensed drugs, yet went along with the deal.

In conversations with stakeholders, I asked why they didn’t consider this, and got no answer.  When I pressed and asked if they were going to work with JHU’s researchers to look at outcomes, I was told they “may have to think about that.”

Think about…what?

I don’t think these stakeholders are bad people or ill-intentioned; they do have a lot on their collective plate.

I do think they have – for their own reasons, which may make sense to them – given up the fight against physician dispensing.

In so doing, they are missing out on an opportunity to help Maryland employers, taxpayers, and injured workers.

They are also empowering the dispensers in other states.

What does this mean for you?

All the research indicates physician dispensing increases disability duration, indemnity expense and medical costs.  THAT is what Maryland should study.

Note – in the interest of full disclosure, I am (as most of you already know) president of CompPharma LLC, a consortium of workers’ compensation PBMs. It’s also important for readers to know that it matters not one iota to me financially if physician dispensing increases or decreases.

It does matter to me personally as it is flat out wrong. It is bad policy that is damaging the many to enrich a very few.

To understand, be at WCRI

The annual WCRI meeting is just a couple weeks away – if you haven’t signed up, you better do it now – here.

I caught up with Executive Director Dr. Rick Victor via email last week to get his take on key findings.  Understanding Rick doesn’t want to give too much away, here’s what attendees will hear..

MCM -There’s been a lot of recent research coming from WCRI; what has been the most surprising result that will be discussed at WCRI?

Rick Victor (RV) – An underappreciated, but likely very significant unintended consequence of the Affordable Care Act  is shifting cases from group health to workers’ compensation.

MCM – What is a key finding attendees will take away?

RV – Why surgery rates vary from state to state

MCM – Do you see any conventionally held wisdom that will be confirmed, or rejected, by research presented at WCRI?

RV – For states that do not have fee schedules, the decision to adopt one is a strategic decision from which there may be no going backwards

One of the most useful aspects of the WCRI Conference is there are few events where the audience is as sophisticated, diverse, and knowledgeable.  That’s why the conference is always sold out.

What does this mean for you?

Better be there…

Pharmacy Management in Worker’s Comp – 11th annual survey

Is up and available for your downloading pleasure here.

Among the highlights are the following…

  • drug spend for the 25 respondents declined year-over-year, marking the fourth year of flat or decreasing spend
  • despite that good news, payers remain more concerned about drug costs than other medical cost areas
  • opioids and related issues again dominated the conversation (the survey was telephonic and took about 20 minutes) with respondents noting issues related to addiction, drug testing, fraud/waste/abuse/diversion, cost, delayed recovery and increased indemnity expense as concerns
  • compound drugs were identified as the biggest emerging issue
  • respondents also noted that regulations and legislation have not kept pace with developments in work comp pharma such as the growth of physician dispensing

The report contains a host of statistics, data, and insights from the respondents, along with perspective gained from doing the survey for over a decade.

Happy reading!

Med mal’s not a factor in health care costs – more evidence

More research indicates tight restrictions protecting physicians and facilities from malpractice suits doesn’t reduce health care costs.

Three states, Georgia, South Carolina, and Texas, essentially prohibit suits unless the physician intentionally orders care that s/he knows will hurt the patient.  A pretty very high standard, and one that would – one would think – allow docs to practice care with no concern about “defensive medicine.”

That may indeed be the case, however it is also the case that there’s no evidence that this high standard reduces cost.  The research, which focused on Emergency Department utilization and costs, found tight limits on suits didn’t reduce the “cost or volume of ED care.”

Moreover, “Legal risk does not motivate physicians as much as some previously thought.” [emphasis added]

This will not still the wagging tongues in the talking heads – nothing will.  But they’ll have less to wag about.

What does this mean for you?

Question those assumptions…

Drug formularies – much needed in workers comp

Controlling drug usage in workers’ comp is – far too often – the proverbial pushing on the rope.

Sure, PBMs and payers have done a remarkable job constraining costs and reducing the initial inappropriate use of opioids. Virtually all payers use PBMs and benefit greatly from PBMs’ clinical management and pricing that is almost always significantly lower than the state fee schedule or retail price.

However…the explosive growth of compounding, the fact that a quarter of drug costs are for opioids and a third for physician-dispensed drugs, the inability of clinical staff to get many prescribing physicians to discuss potential alternative treatments, and the frustration experienced by adjusters and employers unable to resolve claims due to long-term, highly-dangerous, and counterproductive use of drugs all argue for more regulatory help.

There are two valuable and too-little used tools in the box; evidence-based guidelines backed up by strong UR and formularies. While many jurisdictions dabble in guidelines, the litigious nature of comp coupled with the imprecise and nebulous wording of regulations often results in more problems, less clarity, and more delays.

In contrast, formularies established in regulation, whether the very tight version used in Washington State or the loose one in Texas, are clear, precise, and incontrovertible.  Drugs are either allowed or not.

CWCI’s just-released study analyzes the potential impact on work comp of those two formularies.  By comparing the drugs dispensed in the Golden State to what would have been allowed by Texas or Washington, Swedlow et al have determined that employers and taxpayers are overpaying somewhere between $102 million and $541 million annually – with no negative effects.

Before some naysayer starts screaming about the unfairness of payers influencing doctors’ treatment decisions, that naysayer should understand that formularies are in place in every group health, Medicare, Medicaid, and individual health plan.  Moreover, said naysayer should READ the CWCI study, and note that a “formulary” may be “set” to require dispensing of the drug that is the lowest-cost but otherwise identical drug instead of a higher-priced-but-otherwise-identical medication – or use any one of several other “levels” to establish a somewhat more restrictive formulary.

Formularies provide better care and tighter control without compromising.  And, a major benefit would be the huge reduction in the contentious and generally pointless UR dealing with drugs…a third of California’s IMRs are for drugs.

An excellent review is in this am’s WorkCompCentral – Greg Jones has penned a thorough, detailed, and well-researched piece that should be required reading.

Medicare Set-Asides and Workers’ Comp

I’m gingerly stepping into a topic I’ve mostly avoided to date – MSAs.  I avoid it because it is mind-numbingly complex, seemingly illogical in application, and served by often-contentious vendors.

NCCI’s Barry Lipton et al just released an excellent synopsis of the MSA situation (opens .pdf) and summary of where things are today. The report focuses on the feds’ review process, wherein they examine payers’ proposed MSAs.  Based on an analysis of data submitted by Gould and Lamb and NCCI’s Medical Call database, a few of the Research Brief’s highlights include:

  • most MSAs are for Medicare-eligible claimants, with 45% over 60
  • MSAs make up 40% of the average total proposed settlement
  • Drugs make up fully half of the MSA amount
  • CMS’ processing time for MSAs has declined of late to a median of 41 days
  • The gap between submitted and approved MSAs has shruck dramatically.
  • 29% of settlements are for amounts over $200,000, while 45% of the MSA amounts are less than $25,000.
  • Most MSA settlements are paid as a lump sum.
  • More than 90% of MSAs completed in December 2012 were approved as submitted.  That came after CMS changed approval vendors in July 2012.

The report is stuffed full of great information and, for those of us who are relatively ignorant of MSAs yet encounter them on occasion, well worth a read.

What does this mean for you?

If you don’t have the time right now, put it in your research file so you’ll have it when you need it.  And you will need it.

Physician dispensing in workers’ comp is killing your financials

The cost of physician dispensing is far above the outrageous premiums the dispensers charge.  The real cost includes:

  • longer disability duration
  • higher medical expense – over and above the excess cost of drugs
  • higher indemnity expense
  • more and longer use of opioids

Lost in the conversation, ignored in legislation, and pooh-poohed by dispensers and their enablers, the research – real research by real scientists, not anecdotal BS by dispensers – proves dispensing is having cost implications far and above the cost of the drugs.

In addition to the ground-breaking work done by Alex Swedlow et al at CWCI, the folks at Accident Fund (kudos to Jeffrey Austin White) teamed up with Johns Hopkins to analyze the impact of dispensing on their claims.

The results – which will be discussed next week in an IAIABC-sponsored webinar – are striking.

Slots for the webinar are still available – it will be held next Wednesday, September 10 from 1-2 Central Time.

Kudos to IAIABC for their leadership on this.

 

 

Work comp claim reporting – why no data?

There’s very little publicly-accessible data about who reports work comp claims, via what channel.  We just finished up a brief project for a client interested in comparing their data to national benchmarks, and we found precious little data on the topic. It may be out there, but it sure is hard to find…

We know the sooner claims are reported the better; there’s some good research out there altho arguably the best – the Hartford study – is dated.  There is more info about the impact of delays in reporting on ultimate claim costs, which is certainly critical, but that’s “outcome” information.  What we don’t know is the “process” information – which helps payers understand where they stand and what they can and need to do to improve.

Payers need to know when and who and via what channel claims are reported, by type of payers, states, industries, employer sizes, class codes – if they want to set goals, figure out where to put their efforts, who to target.

In general, we learned that the vast majority of claims are reported by employers via phone.  Whilst many payers have web- or email-based reporting capabilities, these are rarely used.  Some have developed smartphone-based reporting, but with a couple exceptions (very large self-insured employers) very few claims come in via this channel.

What does this mean for you?

Should we do a Survey of Work Comp Claim Reporting?  I’m thinking this may be worthy of study; perhaps HSA should develop and conduct a quick study to gather some baseline intel on the current state of the industry.

If this makes sense to you, please say so in the comment section.

Thanks!

 

 

 

 

Workers’ comp – the near-term outlook

NCCI’s just-published assessment of work comp trends has a wealth of information, much of it well worth contemplation by anyone in the industry.

Here are a few takeaways that jumped out at me.

  • Overall the current state of the market is steady – the market and rates are firm, premiums are trending up modestly, frequency is continuing its structural slow decrease, and claims cost inflation appears to be well within acceptable ranges.
  • Employment has returned to its pre-recession level, yet the percentage unemployed remains above 6 percent.  Employment drives premium so that’s good news, however there’s plenty of room for that percentage figure to drop even more.
  • More specifically, employment in manufacturing and construction, traditionally high-premium industries, remains lower than it was before the recession.  If this picks up significantly, so will work comp premiums and rates.
  • If investment yields remain low, we may well see premiums increase as insurers seek to offset the decline in ultimate cash flow.
  • Medical trend is pretty low as well as the work comp world’s experience parallels group and governmental program results.

Which leads to the key questions – what could change the outlook from “steady”?

  • A surge in employment especially in construction will increase injury risk and premium volume.
  • Continued low investment returns may force insurers to raise rates.
  • An uptick in medical inflation – perhaps due at least in part to cost-shifting – could lead underwriters to push rates up quickly.

What does this mean for you?

Lots of ifs and maybes; fortune favors the alert.

 

 

Survey of Drug management in work comp – quick take

This is the eleventh (!) year I’ve been involved in surveying workers’ comp payers to get their take on pharmacy management.  Now that Yvonne Guibert (thank you Yvonne) has finished collecting the data, I’m working on the report.  It’s going to take a week or so, but I’ve pulled a couple highlights to whet your appetite.

  • Overall, drug spend declined for most of the 25 respondents, with some seeing percentage decreases in the double-digits.
  • In addition, total spending (across all respondents) declined as well – by about the same margin.
  • Top problem? close between opioids and physician dispensing, same as last year.
  • Biggest emerging problem? Compounds, without a doubt.
  • 21 of 25 respondents said prescription drug costs were more or much more important than other medical cost issues at their organization.
  • 88% of the 25 respondents (large, mid-sized, and small WC TPAs, state funds, and carriers) have a urine drug monitoring program in place today or will by the end of the year.

Much more to come – the data geek in me is getting all fired up about what we’re going to learn.

Thanks to the 25 organizations who spent time collecting their data, then sharing it with Yvonne.  This is not an easy task, but one that really helps all of us understand what is going on with pharmacy programs, utilization, solutions and cost drivers and how payers are addressing the issue.

Stay tuned…