Month: April 2016

Apr
7

Making work comp services more “efficient”

Posted by Joe Paduda on Thursday, April 7th, 2016 | Comments

That is the reason there’s been so much investor interest in workers’ comp – we are the epitome of the “yellow sticky” business…

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Workarounds abound, driven by individual adjuster’s requests, insurer system limitations, ever-changing state requirements, unrealistic-but-nonetheless-mandatory employer demands, and system “upgrades” that eliminate prior changes built specifically to accommodate a specific customer.

A couple examples…

Some state regulations require insurers to allow physician dispensing of drugs only within seven days of the date of injury. This requires the payer, Pharmacy Benefit Manager, bill review processor, and adjuster to have a “counter” to make sure they aren’t approving/allowing/paying for doc dispensed drugs they shouldn’t be. Data feeds have to be designed and built and tested, new fields added, new alerts coded, and staff trained and monitored and QA processes developed.

Or, more likely, put a yellow sticky with “do not pay Doc Disp Rx w/i  DoI” on that computer.

A large employer’s risk manager does NOT want Dr Awful to perform any Independent Medical Examinations (IMEs).  The employer TPA has to ensure its adjusters never use Dr Awful.  The adjuster that usually handles that employer’s claims is out on maternity leave, and somehow their replacement is supposed to KNOW this, perhaps by puzzling thru the SLAs (Service Level Agreements), reading the special handling instructions, or asking their manager.

Or, more likely, just put a yellow sticky with “DO NOT USE DR AWFUL FOR COMPANY X’S IMEs” on that computer

Pretty soon you get a cube that looks like our photo above.

Our industry is seen – rightly so – as horribly inefficient, ripe for automation, desperate for change. It is also inherently un-automatable, for several reasons.

First, it’s a state-driven system.  And when you’ve seen one state, you’ve seen one state.  Fee schedules, billing rules, employee direction to preferred providers, clinical guidelines, utilization review, state forms, dispute resolution processes, documentation requirements, all vary from state to state, and are constantly changing.  It’s just very, very hard to stay on top of these changes, figure out how to implement them, and also educate adjusters, clinical staff, bill processors, employers, lawyers and patients.

Second, payers chronically under-invest in technology, so even if the vendors have this whiz-bang terrific artificially intelligent tech platform, chances are pretty good they are trying connect with a payer just a generation away from the green screen era…if they ever left it.

Third, TPAs and service vendors have gotten very good at figuring out how to jury-rig their platforms and workflows to accommodate demanding customers.  It’s a hyper-competitive business; it’s either accommodate or lose the business.  Often it comes down to Martha or Mike in operations knowing that Fred the adjuster wants his reports on pink paper on Tuesdays and purple on Wednesdays.  And if that’s what Fred wants, that’s what you need to give him to earn – and keep – his business.

What does this mean for you?

Smart people who really understand the business can find lots of ways to do things more efficiently, increasing performance while stripping out cost and eliminating errors. However, if one doesn’t really understand the business, making things more efficient may well disrupt and break processes put in place because customers want and need them to work that way.

Apr
6

Highlighting the lowlifes – Real investigative journalism looks into workers comp

Posted by Joe Paduda on Wednesday, April 6th, 2016 | Comments

Finally.

Investigative journalists are catching on to the widespread, rampant abuse of work comp by unscrupulous “doctors” and scam artists who’ve figured out it’s easy to make bank by cheating employers and taxpayers out of their workers’ comp dollars; and a whole lot less risky than taking on Medicare or Medicaid.

Christina Jewett’s series in Reveal highlights the lowlifes in California who’ve made millions filing fraudulent claims for non-existent medical conditions attributed to both real and imaginary patients. Comparing work comp fraud to Medicare, Jewett cites the relative ease and low risk inherent in cheating workers comp compared to the higher risk, harsh penalties, and Federal investigative muscle confronting would-be Medicare fraudsters.

The list of scams won’t surprise anyone who’s been in workers’ comp; fake diagnoses used to justify procedures that never happened; non-existent medical providers billing for services never delivered to claimants; claimants subjected to surgeries for conditions they never had.

Nauseating indeed, if for no other reason than we’ve seen it all before so many times.

Another “area of opportunity” for profiteers looking to shake the work comp money tree is the air ambulance industry. A recent Nightline story shines a very bright light into the very cloudy world of “life flights;” families bankrupted, insurers bilked, and employers stuck with bills for “life-saving” flights for patients whose lives were not in imminent danger.  Last summer, James Laughlin reported there were over five hundred fee disputes between comp payers and air ambulance companies in just one state – Texas.

I applaud Nightline, Jewett and the Center for Investigative Reporting for their diligence.  It’s remarkable how real journalists can help focus public attention on what’s really wrong with workers’ comp.

Michael Grabell and Howard Berkes could learn a lot from Nightline and Ms Jewett.

Apr
1

Obamacare – Round Two

Posted by Joe Paduda on Friday, April 1st, 2016 | Comments

Elections have consequences, none more so than this one. With the GOP headed for potentially historic losses in the Senate and House – and another four years of a Democratic-controlled White House and administration, policy makers are working on what some are calling “Obamacare, Round Two.”

That’s the quick takeaway from conversations with several leading Administration officials earlier this week in Atlanta.

After eight years of mostly-failed attempts by the GOP to de-fund, repeal and obstruct the PPACA, the anger at these “obstructionists” is being channeled into both legislative and regulatory initiatives designed to increase coverage, dramatically reduce consumer costs, and expand regulatory authority over states and private insurers alike.

And, in what appears to be more than just an afterthought, fundamentally change occupational medical coverage for many employers by shifting it to Exchange-based plans.

Specific focus is on requiring state expansion of Medicaid and “re-funding” the Co-Operative health plans that had billions stripped away last year by GOP Senators, resulting in the bankruptcy of many. This last is the subject of some internal debate, with two alternative approaches emerging as alternative solutions.

One is to fully fund current Co-Op plans while allocating additional funds to new start-ups in those areas where Co-Ops disappeared due to the funding elimination. While this would likely require additional allocation of some $10-$12 billion over five years, policy makers note that this is just returning dollars that should have been allocated according to the original PPACA. Notably, there’s already furious resistance from the big private payers as the legislation would require cross-subsidization from plans generating better-than-expected financial returns.

While the Big Three don’t like the “Zombie Co-Op” idea (they thought the idea, along with most of the plans, was dismembered, dead, and buried), they absolutely hate the alternative – a Public Option. Despite that animosity, the health plans’ huge lobbying power is likely to run up against the political reality that is the Democratic Party’s efforts to win back Congress AND keep the White House blue.

Back when PPACA was taking form, liberal Democrats in the Senate pushed very hard for a public option in each market area, claiming that the market power of the huge health plans could only be countered with a governmental plan.  As there was a considerable effort by the Dems to get at least one Republican backer (Susan Collins of ME was courted long and hard), the public option went nowhere. Unhappy with the Co-Ops offered as an alternative, liberals are also pointing out the political reality of their electorate.

Simply put, to ensure Sanders supporters turn out in the general election (forecast to be a Clinton-Trump contest), Clinton’s advisers are pushing her hard to release a “platform plank” requiring a “Medicare for All” option in every state. Clinton’s strategists are leaving no stone unturned in their effort to shift the millennials’ support from Sanders to presumptive nominee Clinton; they see this as great politics both nationally and in the contested House and Senate races as well.

As a sidelight (to some, but hugely consequential to many), it appears there’s a strong move to include coverage for occupational injuries and illnesses in “ClintonCare”. Health nerds (yes that’s me too) will recall that Ms Clinton’s stillborn healthcare reform plan incorporated workers’ comp in Title X.

The furor over opt-out, recent OSHA reports, and public scrutiny of some bad actors – along with a very favorable political environment – have made several key policy advisers revive this once-dead concept, while adding on disability coverage thru an expanded Social Security function.

Where all this leads is anyone’s guess, but the politicians involved strongly believe ClintonCare will be a very powerful tool to unite the somewhat-split party while driving GOP Congressional candidates closer to presumptive nominee Trump.

What does this mean for you?

May we live in interesting times…