Insight, analysis & opinion from Joe Paduda
Finding malfeasance, mismanagement, incompetence, or just plain fraud related to workers comp is pretty easy if you confine your search to Ohio. The latest comes from the Plain Dealer in a report on vocational rehab companies that have benefited enormously from their cozy relationships with managed care firms.
In one answer to the question, where did Ohio’s Workers Comp premiums go?, the answer is to a contractor building Tommy Noe’s house on Lake Erie.
Noe, the defendant in a criminal trial, is alleged to have used workers comp funds set aside as reserves to pay future claims to help pay for his 4200 square foot house on Lake Erie. And another one in the Florida Keys, both of which were worth a million bucks each.
If anyone has photos of these places, let me know.
Coventry announced their third quarter earnings this week, and much of the news was good. Health plans have been experiencing declining medical loss ratios and strong pricing, resulting in solid profiits and increasing revenues, and Coventry’s results mirror the industry.
Before diving into the FH WC business, a caveat. Coventry is a very well-managed company. They run a very solid business, understand the group health, HMO, and Medicare businesses better than most, and have consistently delivered excellent results.
But, while all is good in group health, Medicare and Medicaid land, the same can’t be said for the First Health workers comp business.
Tommy Noe, the political fund raiser/rare coin investor/investment adviser to the State of Ohio’s bureau of workers compensation (BWC), ought to be teaching negotiation seminars in his next life – that’s after he gets out of the pokey.
The deal he negotiated with BWC is far better than any I’ve come across or heard about, According to the article, Noe’s deal prevented any future BWC administrators from reviewing or rejecting his deal, as he did not want them to interfere with his investment “strategy”.
As well they should have.
There is quite a bit of interest among private equity and venture capital firms in the work comp managed care “space”. These investors seek to buy into companies that are poised for growth, that have a “sustainable competitive advantage”, solid management, long term contracts with customers, and a profitable business model.
A key to success for these investors is to find these firms before the other investors do, which means identifying good companies quickly. Analysts spend lots of time, energy, and brain power analyzing, assessing, and interpreting data. looking for the wheat among the chaff.
A much faster, and probably more accurate way, is to pick up the phone and call the company. Talk to the receptionist, someone in customer service and someone in billing. What they say doesn’t matter nearly as much as how they say it.
Good companies have energy, enthusiasm, and a desire to help that comes through the phone. Not so good ones have none of the above.
The announcement that healthplan semi-giant CIGNA is getting into the workers comp pharmacy benefit management business is stirring up a good bit of interest.
I don’t get it. Further, the press release has so many factual and inferential errors that it makes me wonder what CIGNA was thinking.
Kudos to USAToday for publishing a pretty good article on variations in practice patterns related to back surgeries. In a front page story today, the paper that has been derided by some as “McNews” explores the issues surrounding the explosion in the number of spinal fusions.
The reporting is balanced, insightful, and thorough, a bit of a surprise coming from a paper that prides itself on short sentences, really short words, and lots of color, not depth and nuance.
Noted throughout the article is the primary problem – no one knows how many spinal fusions are the right number, and there is significant disagreement among stakeholders re when a patient should have surgery. (free registration required) That’s all true, and that’s where workers compensation comes in.
Continue reading Workers’ Comp – the answer to the spinal fusion question
Ohio’s Bureau of Workers Comp (BWC) could take a lesson from the State of Washington’s own workers comp fund. While the two state funds have some similarities, their results are quite different.
How different? Read on…
Florida is one of, or perhaps the only, state to have as an official elected position a state CFO. The incumbent is supposed to oversee state spending, review state contracts and investigate insurance fraud among other functions. Florida’s CFO is also part of the four person cabinet along with the governor, attorney general, and Commission of Agriculture and Consumer Affairs.
Obviously, the CFO would have a broad and deep impact on the state’s insurance industry, the provision of same, and purchase of insurance by the state. That makes it interesting for we insurance types.
For readers interested in workers comp, news from Effect Measure to whet the appetites of litigators looking to subrogate workers comp claims.
It seems that the highest levels of the Federal government were intimately involved in publishing information about the safety, or lack thereof, of the air around the WTC in the days after 9/11. And by all accounts they got it wrong.
Liberty Mutual, among other workers comp insurers, was, and is, on the risk for many of the people affected by the clouds of noxious substances resulting from the Towers’ collapse. Perhaps they are already subpoena-ing away…