Mar
8

Headed to WCRI…

It’s that time of year – the annual gathering of the work comp experts/geeks in Boston to hear the latest research from those who are really the experts.

Along with discussions of physician dispensing of drugs (can we PLEASE kill this beast!?) to worker outcomes to opt out (two sessions that I am relying on to get me completely up to speed) it’s going to be a brain-filling couple of days.

For those interested in work comp – that includes you, hedge funds and other investors – this is a must-do.  Registration’s still open here.


Mar
3

Dr Glenn Pransky – one of work comp’s great ones

Recently I had the honor of meeting the nation’s foremost expert on disabilityGlenn Pransky M.D.  What a wonderful gentleman.

Glenn is the Director of Liberty Mutual’s Center for Disability Research; he is an occ med physician and has his Master’s in Occupational Health as well and has authored over a hundred articles, research papers, and book chapters.  That’s all quite impressive; what really struck me is how approachable, genuine, and open Glenn is. [my use of his first name is intentional, Glenn is completely without pretension or ego.]

His passion is disability; reducing its occurrence, mitigating its impact, improving the lives of those with physical limitations.  The research Glenn and colleagues have conducted includes seminal work on low back pain’s impact on disability; age and job tenure and their relationship to disability duration; the impact of pain on disability; the effect of supervisors’ leadership on return to work for workers with back ailments.

And that’s just what he did last year; if you want to fully grasp the depth and breadth of Glenn’s work, peruse this list.

He will be the first to note that there are a lot of co-workers at the Center and co-authors and fellow researchers that have also done yeoman work, and that’s true.  But Glenn’s contribution is second to none, and its clear that his leadership, focus, and keen intellect has had a wide, deep, and overwhelmingly positive impact.

Kudos to Liberty Mutual for its foresight in setting up the Center almost two decades ago, and for continuing to support its work.  The Center’s contribution to the betterment of America’s workers, in fact to all of us, has been significant indeed. [full disclosure – I was employed by Liberty for several years back in the 1990’s.]


Mar
2

Examworks released their Q4 and 2015 earnings report last week, while Clinical Solutions boss Ken Loffredo and several of his colleagues left the company rather abruptly, with Ken departing ten months before his contract was up.

First, key takeaways from the earnings call, followed by my take.

  1. organic growth in the US increased by 0.7%
    ManagedCareMatters – Given work comp claim (Exam’s core source of business) frequency continues to decline, that’s not surprising.
  2. Execs claim they’ve signed a “national account” and another will close later this year.
    MCM – From talking to investors, there’s a misconception about so-called “national accounts.  Namely, this just gives Exam a license to hunt; their field sales force still has to go out and beat the bushes to get adjusters to refer cases to Exam. Notably, I know of NO national payers that use ANY IME provider exclusively; most have several.
  3. Exam execs believe that they are killing off small mom-and-pop IME firms that can’t compete w Exam on price or service
    MCM – I’ve spoken with several IME firms of varying size; all claim to be competing effectively with Exam
  4. Exam claims it has 15% of the US IME business.
    MCM – Let’s dig into the math…

    1. 2015 US revenues were $511 million.
    2. Estimating the clinical solutions group business accounted for, say, $60 million of the $511 million, IME revenues totaled somewhere around $400 – $450 million.
    3. So, EXAM believes the US IME business totals between $2.7 – $3.0 billion
    4. That’s around twice as high as my best estimate, which is based on actual interviews with major payers. [happy to have you check my assumptions and math]
  5. “We estimate that only 20% of claims require IMEs.”
    MCM – Interested in hearing from folks in work comp or disability; what percentage of total claims have IMEs?
    UPDATE – from a former WC Insurer CEO:
    20%? 20% of what? There is no way we ever had that volume of total claims with an IME, ever. We would have been in perpetual litigation…to have 20% of all claims in a standard carrier go to IME … just seems crazy to me.”
  6. don’t expect many more acquisitions of IME firms
  7. document management firm ABI was acquired six weeks ago; execs seem to think they’ll be able to convince their IME customers to use ABI for “the vast majority of their claims”

Other observations

  • Net income from operations dropped by almost half from 2014 to 2015.
  • Pricing is a complex issue.  Often there is a “flat” price which gets inflated with add-ons such as rush fees, documentation prep fees, nurse review fees, complexity surcharges and the like.  Thus, unsophisticated buyers often think they are getting one price – and end up paying much more.
  • Not sure I understand management’s thinking re ABI; almost all P&C insurers currently use a document management firm; Xerox is a major player in this business and is the industry leader.  If Exam is intending to compete with Xerox for broad-based document management, that will be a big challenge.
  • Sources indicate the Clinical Solutions Group (acquired about 18 months ago) isn’t doing so well.  Those who follow the Medicare Set-Aside business aren’t surprised; Exam’s pricey acquisition of Gould and Lamb was seen as a head scratcher.  The ASN/MedAllocators purchase a few months later may have been an attempt to fix G&L by bringing in experienced management and complementary business lines. With the departure of Loffredo, chief lieutenant Kevin Mahoney, and others the future of Exam Clinical Solutions seems rather cloudy.

Perhaps the new ABI business will turn out better than the Clinical Solutions venture. And that’s no slam against Loffredo et al; my take is they were brought in to patch a very leaky ship while sailing it in a very competitive race.

It would have required a ton of resources to patch, bail, and sail, resources which weren’t made available.


Mar
1

WCRI’s John Ruser on today, tomorrow, and next year

Late last week I sat down with WCRI President/CEO John Ruser to get his views on his first few months at the helm, find out what’s on the agenda at the WCRI conference next week (if you haven’t registered, get your fingers over here), and learn about future areas of focus.

MCM – What has been the most eye-opening for you as you’ve moved from the Bureau of Labor Statistics to WCRI?

Ruser – First off, it is an honor to take the helm of such a well-regarded organization with such a diverse membership and to be working with such an intelligent and talented group of colleagues who are committed to publishing high-quality, credible and independent research. Along those lines, what has been most eye-opening has been the tremendous support for the research from all stakeholders in the workers’ compensation community. I’ve always knew WCRI was well-regarded, but when you are in the position I am in and interacting with people all across the country, you really understand how truly special WCRI is and how important the mission is to provide policymakers and other stakeholders with the data they need to make more informed decisions.

MCM – What has been the most fun?

Ruser – Working for BLS, you put out data and that is it. However, WCRI has so much interaction with the workers’ compensation community through their rigorous quality assurance process (i.e., reviewers, state advisory committees, etc.). The other thing that makes WCRI different is our mission, which is to be a catalyst for significant improvements in workers’ compensation systems. So that is what is fun, to see the research being used by the community it is seeking to help.

MCM – What will attendees learn at WCRI’s conference next week?

Ruser – A big area of interest this year is opt-out. We have two sessions on opt-out that will provide a deep dive from multiple viewpoints. In addition, researchers from the Dartmouth Atlas project and NCCI will join our staff to discuss interstate variation in medical treatments. The conference will also include the latest research on prescribing of opioids across the country, which is an issue that garners great attention in and outside the workers’ compensation community. We are hopeful that presentations on the issue lead to changes.

MCM – Do you see changes in the research focus of WCRI going forward?

Ruser – Over the next two years, I expect we will be doing a lot of work on treatment guidelines; their impact on outcomes, procedures, costs, and injured worker outcomes. We are also working on an update on injured worker outcomes with surveys of injured workers. Areas covered by the surveys include access to and satisfaction with medical care, return to work timing, and earnings loss. There has also been a lot of interest in our work on case-shifting, so we will be doing a study to see if there is evidence of case shifting due to high deductible health plans.

MCM – Can you give a bit more detail on treatment guidelines? What’s driving that focus?

Ruser – In discussions with our members and other stakeholders, treatment guidelines have risen to the top of the priority list. There is interest in learning what leads providers to use treatment guidelines and to what extent treatment guidelines affect outcomes. Utilization review (UR) and compliance issues affect the former. We want to better understand what kind of programs are out there and how are they being used, do treating physicians comply with guidelines?, are denied services paid?, what are providers’ views of these programs.

We have begun semi-structured interviews with physicians in Louisiana re guidelines, and have seen a wide range of responses. We are learning a lot about providers’ views and, at the same time, gaining experience and expertise in collecting, analyzing, and using information from free-form surveys.

I expect we will use what we’re learning about text mining in another area – triggers of claimant attorney involvement. This gives us an opportunity to explore using broad questions to collect unstructured data, and then code that data to provide information. There is tremendous opportunity to use less-structured information in our research.


Feb
29

What job?

Many high-injury rate jobs that drive lots of work comp premiums and services won’t exist in ten years.  And lots of low-injury rate jobs will disappear as well.

How we prepare for this – or rather how you prepare for this – will separate the survivors from the corpses.

A bit of historical perspective; twenty-plus years ago when I worked at MetraComp, Lockheed Martin’s Fort Worth plant was a customer.  The workforce there was highly trained, averaged around 48 years old, and paid very, very well to make fighter jets.

MetraComp’s contract with LM had a big success fee baked-in.  MetraComp would be rewarded for improving disability results, and penalized – rather painfully – if future results were close to or, God forbid, below historical results.

Then the Air Force decided to stop buying new fighter jets.   The average worker had 17 years to go till retirement, was making great money, and there were zero jobs in the area that paid anything close to the hourly rate, much less provided LM’s benefits.  Add in the physical nature of the job – crawling around inside really small spaces attaching tiny parts requiring lots of repetitive movements.

The injury rate jumped, while opportunities for re-employment suddenly dried up.  MetraComp got killed.

Today, we’re looking at a future with a whole lot of Lockheed Martins.  

A robust and well-documented research project estimates almost half of US employment is at risk of disappearing.

Here’s just one industry where we’re going to see big changes.

Trucking employs 3.5 million drivers today, paid about $40k a year.  Good-paying jobs that don’t require a college degree, a rarity in today’s economy, jobs that will disappear with autonomous driving. When they do, jobs in truck stops, motels, and restaurants will dry up.  And the folks who drive the trucks and work in those truck stops, motels, and restaurants will not spend their wages in small towns, rural areas and cities.

BTW, truck driving is the most common job in 38 states…

For now, trucking is a great business.  For now.  Sure, there aren’t enough drivers today, but those jobs aren’t going to exist in 10 years.

So here’s the two questions you need to ponder.

Are you insuring/serving a thousand Lockheed Martin jet factories?

Where are you going to re-employ the truckers, hotel staff, wait staff, and mechanics? 

 


Feb
26

Work comp; two quick things

First, WCRI’s annual meeting is coming up quickly.  The fine folks from Cambridge Mass have added a second panel on opt-out.  You’ll hear from a regulator, employer, workers’ advocate and industry spokesman after listening to a “point-counterpoint” from two of the leading experts on opt-out.

For anyone who’s remotely involved in or affected by work comp, this is a must-do; you’ll get a solid education on one of THE key issues in workers’ comp.

Second, Tennessee’s adopted the ODG treatment guidelines and formulary; they go into effect Monday. More precisely, as of 2/28/16, the formulary applies to refills of scripts written before 1/1/16.  For newer prescriptions, the effective date is August 28, 2016.

Tennessee becomes the fifth state (after WA, OH, TX, OK) to adopt a drug formulary; perhaps a dozen others are working on formularies.

I’ve been far from diligent in posting of late – now that a couple projects are almost wrapped up, thing should get back to normal.  Thanks for your forbearance!


Feb
25

The future of ACA – the wonks sound off

18% of our economy is healthcare.  To know where it’s headed and how it will change, read Louise Norris’ edition of Health Wonk Review.

Louise has a plethora of posts from really smart people about the Path Forward for ACA and health reform, plus thought-provoking takes on pharma pricing, conflicts of interest, grandfathered health plans and the working person’s travails in 1915.

 


Feb
23

Tuesday’s California catch-up

Back from vacation and catching up on all the goings-on; some pretty big news out of California re work comp these days…

We’ll start with the highest impact news, and that is the California Supreme Court’s “decision” to let stand a lower court ruling that the IMR process is not unconstitutional (sorry for the double negative) AND that the IMR process does not violate an injured workers’ due process rights.

While there remain constitutional challenges to the IMR process, the Court’s decision to not review the lower court’s ruling implies these other challenges may face a similar fate.

Implication – business as usual for California.  As Court rulings supporting the IMR/UR process continue to pile up, it’s becoming increasingly clear that IMR is not going away.

Serendipitously, CWCI just released its latest analysis of IMR outcomes for 2015 (they work fast out there in Oakland!).  Here’s the need-to-knows:

  • IMR letters increased 19% from 2014 to 2015.
  • Turn-around-time (TAT) is pretty stable – and a lot faster than in 2014
  • UR decisions were upheld by IMR 88.6% of the time – essentially identical to previous results.
  • Drugs were the leading category of service appeals yet again, with opioid scripts topping the list as the drug class most-commonly appealed.  88% of denials were upheld.
  • Compounds accounted for 11% of requests; denials were upheld 98% of the time.
  • 10 physicians accounted for 34,700 IMR decisions – 11.8% of the total

Implication – Many docs are not learning – or are willfully ignoring established precedent for medical necessity/appropriateness.  The 10 docs who average 10 letters for every calendar day are jamming the system with futile requests, knowing full well that 9 out of 10 will be rejected.

Why?

As California moves to adopt a formulary next year, we may well see a rise in IMR requests when these unteachable docs continue to prescribe drugs that are inappropriate.

Thanks to Bob Young at CWCI for the heads’ up; CWCI’s take on the Court case is here.

Another item worthy of your attention – Congratulations to Rick Victor PhD; the founder and former Executive Director of WCRI has been named a Senior Fellow at the just-established Sedgwick Institute. Rick is a good friend and one of the most honorable people I know. It is great to see he will stay involved in the industry.

 

 


Feb
15

Catch up Monday

On holiday this week, hiking in Arizona.  Hope your week is fabulous, unless you are a physician dispensing advocate or opioid overuse apologist, in which case I hope it is anything but.

Speaking of which, opioid guidelines are becoming more commonplace – a welcome event indeed.  One well worth your time has been put together by the estimable Steve Feinberg MD and his colleagues.  Dr Feinberg is a practicing physician in California; he deals with a lot of chronic pain patients, many workers’ comp claimants. Note – CompPharma, the work comp PBM consortium of which I am president, participated in the guideline review process.)

Dr Adam Fein’s Drug Channels has this useful graphic detailing the US pharma distribution and reimbursement system.  Worth downloading and posting on your cube wall.

The good doctor has also penned a brief and compelling synopsis of the current drug pricing landscape, forecasting that the rampant generic price inflation of the last few years is over.

Implementing health reform

Following up on last week’s report indicating ACA’s employer mandate has not had a material effect on hours worked comes news that the expansion of Medicaid in most states has had the same “non-effect”.  Evidently there was some concern that low-paid workers would drop out of the workforce or reduce their hours once they got coverage via Medicaid; the latest research indicates that – at least so far – this does not appear to be occurring.

Work Comp

Heard last week that OneCall has (internally) announced its plans to revamp operations and detailed the impact on employees.  There will be about 150 folks affected; job responsibilities will likely change for those who remain, others will be moved to different locations, and it looks like some will lose their jobs.  This comes after the sales meeting of a few weeks ago where a shift in emphasis towards more focus on HQ sales was reportedly unveiled.

And don’t forget the WCRI Annual meeting is coming up in less than a month.  I’ll be interviewing Dr John Ruser later this week and will report back on what’s on the agenda.  Registration is here.  

Time to hit the trail – literally.


Feb
9

A mass murderer brought to justice.

A California doctor, convicted of second-degree murder was just sentenced to 30 years-to-life in prison for overprescribing opioids that resulted in the deaths of 3 “patients”.

Dr Lisa Tseng’s apparent willingness to hand out scripts to anyone with cash was going on for years and reportedly resulted in the deaths of at least a dozen patients.  Worse, she knew her patients were dying; according to news reports the County Coroner called her office at least monthly to let her know one of her patients had died.

At least a dozen of her patients died of overdoses.

Let’s call her what she is – a mass murderer.

While her motives – apparently purely financial – may have been different than the Ted Bundys, John Wayne Gacys, and Jeffrey Dahmers, her death list is not.  Nor is the impact on the families and friends of her victims.

Her defense attorney complained that the verdict was already affecting other doctors’ behavior.  I should hope so.

Another physician bemoaned the verdict, saying:

“When you use the word ‘murder,’” said Dr. Peter Staats, president of the American Society of Interventional Pain Physicians, “of course it’s going to have a chilling effect.”

Staats said he believes an aggressive medical board — not prosecutors — should go after reckless doctors. But, he added, any doctor who is prescribing pills knowing that they are being abused or diverted shouldn’t be called a doctor.

Let’s understand what’s going on here.  Some in the medical community are totally missing the point.  Over a three-year period, this “doctor” wrote some 27,000 scripts for opioids and other very dangerous drugs.  That’s about 25 each day. 

Instead of whining about “chilling effects” and the impact on doctors, these protesters should be asking themselves why 28,000 people died as a result of “accidental poisoning” due to overdoses.

They should ask themselves why heroin use has exploded.

And why it came to this.

Fortunately, the Tseng case seems to be sparking some much-needed conversation in the pain physician community.  Here’s hoping it results in a lot more caution and far fewer opioid scripts.

Thanks to good friend and colleague Sandy Blunt of Medata for the heads’ up.