The IMR debate is focusing on the wrong metric

Now that California’s courts have ruled the IMR process is Constitutional, we can hope things will settle down, docs will start learning what is acceptable and what isn’t, and needless friction will decrease.

Unfortunately that isn’t likely.  If history is any indicator, a very few docs will continue to flood the system with thousands of requests for IMR, most of them for drugs and procedures that fall far outside the state’s evidence-based clinical guidelines.

Let’s acknowledge that the system – like any – isn’t perfect.  Let’s also acknowledge that all the data, research, and credible study to date indicates it works quite well.  What’s lost in the data-driven debate is the real problem – we aren’t looking at the right metric.

As CWCI has documented, well over 90% of all work comp medical procedures, tests, drugs, and treatment are approved.  And, when appeals do get to the last stage; the Independent Medical Review:

Data on the IMR outcomes show that 91 percent of all IMR decisions upheld or agreed with the physician-level utilization review opinion, while conversely, 9 percent of medical service requests submitted for IMR after being modified or denied by a UR physician were approved by the independent medical reviewer.

I’d suggest the CA UR and IMR process is approving TOO MUCH care.

Does anyone think that 94%+ of all medical procedures requested or delivered to California’s work comp patients are medically necessary, appropriate, and the best possible care?

Didn’t think so.

There’s no question too much care can be quite harmful.  The rampant overuse of opioids in workers’ comp is but one example of far too much care causing grievous harm.  Add in far too many spinal surgeries with lots of implants, and one can see that these “approved” services are far from optimal care.

What does this mean for you?

Why aren’t we focused on making the UR process tighter with more stringent controls and requirements before potentially dangerous and debilitating treatment is authorized?

Friday catch up

Heading home from California, where I had the honor of spending most of a day with the good folks at the California Workers’ Compensation Institute.  Really fun (yes, fun!) to discuss research topics, methodologies, limitations, and uses with the real experts. CWCI has a robust research agenda heading into the winter, and we’ll see much of it published before their annual meeting.

Which is a “don’t miss”.

If you haven’t seen their latest work on drug testing in work comp, it is well worth a read.  This is one of those complicated topics where a brief scan of the report isn’t enough to do it justice.

There’s been a lot of great research from NCCI and WCRI published recently as well.  I’ll be able to work thru the backlog while enjoying a cross-country flight, and will report back on Monday.

In the interim, there’s been a bit of buzz about a big acquisition of late.  I’d suggest that folks take a deep breath and relax.  These things take a lot of time, there are lots of regulatory hurdles to navigate, and things are especially sensitive when a publicly-traded company is involved.  If you are thinking something will happen before NWCDC in Vegas, you should re-think.

Finally, the just-announced Stevens decision affirmed the Constitutionality of California’s IMR process.  This is BIG NEWS, as it removes a lot of uncertainty about utilization review and related matters. Read Stephanie Goldberg’s piece for the details.

ProPublica’s Opt-Out reporting

ProPublica and NPR have a new investigative report out on Opt-Out, the nascent industry seeking to allow employers to “opt-out” of workers comp. Perhaps more accurately, PP/NPR focused on one individual in the Opt-Out industry, concentrating their attention on Bill Minick, his company, and their clients and supporters.

As one who has fiercely criticized ProPublica and NPR for their slipshod, inaccurate, and biased reporting on workers comp, I am quite skeptical about their work.  Even after lengthy conversations with myself and other work comp experts, even after we sent numerous documents, studies, and papers refuting their many errors, even after sharing information with them about the myriad abuses of the system by profiteering docs and shady physician dispensing companies and surgery mills, these two refused to acknowledge those errors, expand their coverage, and correct their “reporting”.

Unfortunately, this taints not only their work, but the work of ProPublica as well. Grabell and Berkes are the lead authors on this new piece on opt-out, which makes me very skeptical.

I’d note that the tone of their writing remains hyper-critical, and while there are ample opportunities to give credit where it is due, Grabell and Berkes seem averse to reporting on any positive aspects of Opt Out – giving short shrift to the Texas Association of Responsible Nonsubscribers, (TXANS) even though that group is the largest association of non-subscribers in the state and nation. However, overall the piece does appear more balanced than their earlier hack-job on workers’ comp.

I do find it ironic that workers comp – an industry/benefit system pilloried by Grabell and Berkes – is portrayed by those two worthies as preferable to Opt Out.

There are big problems with opt-out; employers with minimal coverage protected by LLC status for one; the poorly-worded definition of “injury”, unrealistic reporting requirements, and failure to protect claimants from discharge are just a few. But perhaps the biggest is the total lack of meaningful regulation; in Texas and Oklahoma, employers have wide discretion as to what their plan covers and doesn’t, coverage limits, injury definitions, settlement conditions, and redress.

There are many good employers using opt-out as a means to avoid the worst of the work comp environment; claims that drag on forever, plaintiff attorneys seeking ever more care to jack up settlements, diagnoses that migrate seemingly at will. So let’s not tar every non-subscriber with the same dirty brush.

I fully understand employers’ frustration with the work comp “system”; I also know there are many injured workers who are treated poorly by that “system”.  There are problems aplenty on both sides.

The solution is NOT opt-out.  Rather we should getting employers to pay enough in taxes to fund adequate regulatory resources; promote speedy and clinically-sound, independent resolution of medical and disability disputes; and promulgate real evidence-based clinical guidelines.

What does this mean for you?

For every problem, there is a resolution that is quick, cheap, and wrong.  Opt out is a great example.



Somebody has some ‘splainin to do.

Claims were up less than 5%, while claim costs increased 29%.

That’s what’s been happening at North Dakota’s state work comp fund, aka WSI as published in their biennial report (note the time period referenced above is FY 2012 and 2013). Fortunately, premiums have been increasing rather dramatically as well, which should help address those rapidly escalating claims costs.

On the downside, the oil patch is suffering from declining prices and slipping employment, which means lower payroll and lower premiums going forward.  If claims costs continue to escalate while premium growth subsides, things are going to get a bit tight in Bismarck.

But let’s not ignore the differential between claim frequency and claim severity.  The biennial report doesn’t indicate much change in the type of injury, so it’s not clear what is driving the big jump in severity.

And the biennial report is all smiles, and precious little discussion of this rather shocking metric.

There’s also a $15 million hit due to WSI’s technology debacle; that’s a pretty substantial contributor to WSI’s “decline in net position” despite a 20% jump in premiums year over year.

So what does this all mean?

Here’s what’s scary.  Claim severity increased a lot, and claim frequency popped up just a bit.  If there are more job cutbacks in the Bakken oil fields, we may see more workers filing comp claims rather than suffer thru a layoff.  And, with fewer jobs to return to, disability duration is likely to increase.

What does this mean for you?

These are very nervous times for WSI.  And based on past experience, it doesn’t look like senior management is up to the challenge.

hat tip to WorkCompCentral for the head’s up!



High deductible health plans are stupid.

Okay, poor grammar, but true.

High deductible health plans (HDPHs) are designed to a) reduce health insurance premiums by b) making people better consumers of health care. It’s also been suggested that lower costs of HDHPs may make it possible for more small employers to provide health insurance.

Let’s take these in order.

First, a bit more background these plans allow members to contribute, tax free, dollars to a Health Savings Account.  These contribution limits in 2014 were $3,300 for individual plans and $6,550 for family coverage.  The idea is folks will be more careful spending their “own” money than their employer’s or insurer’s.  Of course, the members have to actually fund these accounts; more on that in a later post.

Comparing a HDHP plan to a “regular” lower deductible plan, premiums are reduced – but that’s only because the cost is shifted from the employer/insurer to the consumer.  It’s a shell game, and the consumer ends up with the empty shell.

There’s no evidence that these plans make us better consumers of health care, and growing evidence that there’s no such result.  Here’s a quote from a story about a recent study of high deductible plans…

employees who reduced their use of care the most before reaching their deductibles were the sickest workers, even though they were also the most likely to continue using services after their deductibles were reached. Once such workers did exceed their deductibles, their use of medical services increased, the study found.

This brings up the main reason high deductible plans don’t control costs; the 20% of consumers who incur 80% of health care dollars blow thru their deductible sometime in March.  After which their care is free, so they use a lot of it.

Couple that result with the fact that many healthier folks avoid preventive care – including maintenance medications – because they don’t want to spend the money.

When it comes to controlling costs, high deductible plans are counter-productive.

As to the possibility that HDHPs help smaller employers afford coverage, that’s indeed possible.  Notably, according to a Health Affairs article, less than 2% of the smallest employers offered HSA plans in 2012 compared to about a quarter of the largest employers.

And, as of 2012, there were only about 6 million HSAs reported to the IRS, so it does not appear as if the takeup has been dramatic.  Of course, that may well have changed over the last two years.

So, if you’re looking to benefit design to control costs, what’s a better alternative?

Simple.  Replace deductibles and copays with co-insurance.  That is, have consumers share in the actual cost.  If treatment costs $100, then the consumer pays $20; if it is $4000, then the consumer pays $800.  This will make the consumer cost conscious without breaking their bank.

I understand that this will require the consumer, provider, and health plan to know what the cost of care is, ideally before treatment.  That is another major benefit of a co-insurance based program; it will speed adoption of transparent pricing and make consumers much more discerning buyers.

Yes, keep an out of pocket limit to protect consumers.  High utilizers will feel the pain of paying co-insurance far longer than they do today.  As a result, they will be better consumers overall.

What does this mean for you?

This isn’t that complicated, nor is it difficult.  Health plans that do this will gain a competitive advantage.

Catching up…

It’s the busy time – budgets, 2016 planning, getting those revenues in before year end. Tough to keep track of important stuff – no worries that’s what we at the Intergalactic Headquarters of Health Strategy Associates are here for!

First, a brief comment on the Cadillac Tax.  The cries for repeal are ill-advised and politically driven – even if they have the support of both Bernie Sanders and many in the GOP. Fact is repealing the Tax would cut Federal revenues by $87 billion; notably those calling for repeal haven’t figured out how to replace the lost income.

Under PPACA, hospitals, health care providers, insurers, drug companies, device companies are all paying their share to help reduce the number of uninsureds.  Yes, some union members and highly-paid executives with rich benefit plans are going to pay slightly higher taxes – but that’s because they are lucky enough to have incredibly generous benefits.

Whatever happened to shared sacrifice, to working together to solve big problems, to Kennedy’s call to ask not what your country can do for you but what you can do for your country?  We constantly hear politicians talking about making America great; that doesn’t happen without sacrifice from all of us.

It’s time to for Sen Sanders, his GOP allies, and highly-compensated workers and executives to stop whining, suck it up, and do their part. 

Okay, that’s off my chest.

Helios has published their latest update on regulations and legislation affecting pharmacy issues in work comp.  A helpful document to file away for future reference.

NWCDC – the Vegas confab looks to be a big event this year; don’t forget to register for the Women in Workers’ Comp Leadership event here.  It will be held the day before the Conference officially begins.

In the shameless self-promotion department, the must-attend session is the Blogger’s Panel on Thursday at 3:30.  See Mark Walls do his level best to maintain order among chaos as Becky Shaffer, David DePaolo, Bob Wilson and I opine on the great events of the day.

Bob and I will be joined by John Plotkin and Bob Reardon of ISG at ISG’s event at 5:30 on November 11 – we’re going to discuss social media as a force for good in the work comp industry.  Make sure to register here.

WorkCompCentral’s CompLaude Awards Gala will be held December 5 in Burbank.

Finally, for those docs looking to increase their income, here’s a GREAT opportunity.

As a colleague noted, if the new guy is making $700k a year, how much are the partners making??


What work comp people are really like

I was thinking it’s about time for another post on the good folks in workers’ comp.  A follow up to the few I’ve published in the past.  In thinking about the subject, I realized I’ll never know many of the really good ones; I’m just one person.

So, allow me to render compliments to a broader group…

The claims handlers, executives, program managers and medical management folks I know – and I know a lot of them – are, with rare exceptions, good people trying to make sure injured workers get the best possible treatment as quickly as possible so they can get back to work.  There’s way more concern about quality care than there is about the cost of that care, a strong focus on figuring out the “right” treatment and the right provider, a real desire to make sure the right thing gets done.

Yes, there are some adjusters who are burnt out, overwhelmed, poorly trained, managed or evaluated based on flawed or downright stupid metrics.  There are misguided “managed care” programs that force adjusters to use crappy vendors so those vendors keep paying fees to the adjuster’s company.  There are mistakes made, documents misplaced, miscommunications and missteps aplenty.

But focusing on the relatively small number of problems gives a grossly distorted picture of the claims adjusting process and profession.

These are people, just like us, who are trying to do a very tough job that involves individuals who are hurt, in pain, scared, and sometimes belligerent.  Claimants’ families are worried about their loved one, their financial future, their security. Claimants’ managers often don’t understand much about work comp, need to get tasks done, and aren’t exactly sure how this whole work comp thing works.  Attorneys may – or may not – be interested in what’s best for the claimant, but won’t allow the adjuster to talk directly with the claimant.  And the C-Suite decision makers may not – for myriad reasons – give claims, medical management, ops, or other departments enough resources, IT expertise, staff, or assistance to do what they need to do.

Despite what some in the press say, most of you are doing a good job under trying and difficult circumstances.


Prepping for the National WC Conference

It’s just around the corner; time to get those appointments nailed down and social calendar set.  There’s always a lot to do and much to learn.  I’ve been going to NWCDC since it was held in the basement of a hotel in Chicago; based on that long experience here are a few things I’ve learned.

  1.  Don’t schedule too tightly.  It can take a bit to get from one meeting to the next, so be aware of location and how long it takes to get around.  And don’t forget that you’re bound to run into colleagues and friends on the way – catching up always takes a few minutes.
  2. Set your schedule ahead of time.  Review the agenda, figure out the must-dos, and block them out.  Then, schedule around those must-dos.
  3. Download and use the NWCDC smartphone app. It is here.  This is a no-brainer; it will make your life so much easier.
  4. Use your smartphone’s voice recorder to “take notes” after your meetings.  Unless you’ve a much better memory than I have, it is too easy to forget what transpired, what you committed to do when.  And, the voice function allows you to record your thoughts while heading to your next meeting.
  5. Don’t get caught up in the rumor mill.  There’s a lot going on in Vegas, and the M&A world has never been busier.  As one who has gotten it wrong a time or two, I’d suggest listening with a skeptical ear, and not passing anything on unless you’ve got the scoop from two different and credible sources – who didn’t get it from the other “different and credible” source!
  6. Know the landscape.  The Mandalay Bay location is great – a very welcome change from the Hilton – but it is spread out and it takes a while to get from the meeting rooms to the lobby to the exhibit floor.  And, there are two Starbucks, so make sure you are specific about where you are meeting.
  7. Wear sensible shoes.  You are going to be on your feet all day and much of the evening, so be kind to them.
  8. Finally, what happens in Vegas gets posted on instagram.  Don’t be stupid. Like these guys. Alcohol is not your friend, and this is not spring break.

Finally, among the events you should strongly consider, register here for the 2nd Annual Women in Work Comp Leadership Forum; it starts at 2 pm on November 10, the day before the official NWCDC kickoff.




Social media in work comp isn’t just about busting claimants

Sure, the news is replete with stories about work comp claimants busted for posting pictures of their car repairs or elk hunts or CrossFit workouts.

But social media is also a force for good – it enables communities to learn quickly about news that wouldn’t be worth any mass media’s time. Communities can share their views, provide guidance and support, engage intelligently.

Bob Wilson, the legendary WorkCompKing, John Plotkin and I will take the stage at 5:30 pm Nov. 11 at the Mandalay Bay in Vegas to discuss how social media can be used for good. (Registration is here; cocktails and hors d’oeuvres will be served) Our Bob’s public discussion of SAIF’s appalling treatment of Plotkin is well known and but one example of the power of social media.  (Bob’s post on the session is here.)

More to the point, the SAIF community’s support for John would have been much more difficult to marshall, document, and report without social media.

That and Bob’s biting wit and relentless pursuit of the issue may well make other organizations a bit more cautious before crossing the stupid line.

Hope to see you there