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The latest workers’ comp intel



The weather is heating up, and so is the workers’ comp services industry.  Here are a few of the latest and greatest.

The big news remains CWCI’s report on opioid usage; some are using the headline that use is “leveling off”, which, to be completely factual, is, well, factual.  It is also just like saying “new cases of bubonic plague in (insert your home town name) have leveled off after hitting an all time high and killing lots of your neighbors.”

Oh goodie.

On the upside, Accident Fund Insurance Company just received a patent for “evaluating medical service providers and directing claimants using a computer and a database…”  The rationale, in patent-ese, is this:

“a method and system is needed to transform the processing of claimants. Without the additional step of directing certain types of claimants to specific medical service providers, not provider networks, the success of directing claimants cannot be effectively measured and used to redefine medical service provider groups and claimant groups in order to improve efficiency and optimize medical costs at the claim level.”

As a consultant, it is rare indeed to see something you actually worked on years ago reach full implementation.  And immensely gratifying as well. Kudos to Jeffrey Austin White, Craig Bilinski, Pat Walsh, Marsha Fenton, Lisa Riddle, and their colleagues at AF.  While others continue to talk, you guys are actually doing it.   

Healthcare Solutions has hired industry pro Rich Leonardo to run PBM sales.  Rich is a highly-experienced and well-regarded exec with a long track record of success.  He’s a good guy too.  Good move by HCS; Rich’s experience running sales for Express’ WC PBM will be invaluable.

PMSI continues on a roll; heard they landed the State Fund of Wyoming PBM contract.  Word is this is in the “several million dollar” range; implementation is underway.

Saw a press release recently that Medata had won the bill review business for a Florida-based auto insurer; that got me interested in re-visiting the medical bill review business to see what’s been going on.  Lots of private equity attention being paid to this space of late; word is one or more of the jumbos are for sale.  Not surprising; if anything the investor activity in P&C services is – if anything – heating up.

Of note, auto insurers in some states (Michigan and Hawai’i in particular) are seeing a big increase in physician-dispensed medications, an unfortunate occurrence that is not only driving up medical costs and will lead to higher settlements, but adding confusion and delay to medical bill processing.  Insurers are wrestling with how best to address bills for physician dispensed drugs, as some are extremely costly and their medical appropriateness (Prilosec et al) can be rather questionable at times.  And yes, this is hitting the PIP/auto insurance lines – and in many cases completely using up the available medical coverage.  

Then there’s this…A Michigan company is hiring 50 (!) reps to sell a compound pharmaceutical narcotic pain cream. Sources indicate a local doc is behind the venture, undoubtedly designed to bring much-needed relief to those poor souls who can’t swallow pills.  Both of them.

Proving that I’m waaaay behind in my mandatory reading and reporting, a few weeks back Chris Walsh wrote a great piece in WorkCompWire about improving workers comp outcomes with systems automation.  Chris started his career in the HMO IT business and knows of what he speaks.  Well worth a read.

Finally, now that Aetna’s completed the legal/financial part of acquiring Coventry, the real work begins.  Well, actually, continues – because the two companies have been working on integrating/combining their operations for months.  Don’t expect to see Aetna sell off the workers’ comp business – because a) it makes a ton of money; b) it is a regulatory risk mitigator; and c) even if they wanted to – which they do NOT – they can’t.   


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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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