Mar
10

How workers fare under work comp varies across states

That’s the top takeaway from the second presentation at WCRI’s annual meeting.

The researchers interviewed 6000 injured workers on topics including access to and satisfaction with health care, recovery of health and functioning, and speed/sustainability of return to work. (preliminary findings, results may change); efforts were made to control for factors that might affect results.

Across the 15 states, “substantial” return to work varied from 91% in IN to 81% in GA (sustained across at least 30 days, with the median of 14%.

My reaction is probably same as your’s; that’s awful.

Digging into the data indicates there’s a lot more to this.

  • there’s a very solid improvement in health status across the surveyed population post injury;
  • however the average respondent is still significantly less functional/has a significantly lower health status post-injury
  • on average one in six injured workers reported “big problems” getting the medical services they wanted. (I know, that care may or may not be medically necessary or indicated)
    • a third of those workers said the problem was due to their employer or insurer discouraging them from going to a provider they wanted to see or getting a procedure (again, paraphrasing).
  • 14% of workers were “very dissatisfied” with overall medical care
  • Wisconsin consistently ranked better than most or all other study states; it’s also one of the highest medical cost states.
    • David Deitz MD noted that all the research into health care costs and quality show no correlation between expenditures and outcomes.

Kudos to WCRI for conducting this research; ultimately the work comp system and stakeholders therein should be judged based on outcomes.  That said, don’t make the mistake of taking results at face value.

Digging into data always reveals details that may confound or contradict initial impressions.


Mar
10

Reimbursement’s effect on case shifting to work comp

WCRI’s annual meeting began with a presentation on the relationship of fee schedules to case shifting.  Put another way, does physician compensation affect categorization of claims as work comp?

This followed their previous study (discussed here) on the impact of capitation on case shifting (kudos to WCRI for allowing me to present a different view in their webinar on the topic).

(note the report discussed herein is based on preliminary findings and subject to change)

The basic question addressed was “do higher fee schedules increase the number of workers’ comp cases?”  More specifically, do treating docs categorize claims as work comp because they make more money under work comp?

The research looked at knee arthroscopies across a couple dozen states; there was some consistency in prices paid in those states for group health claims; notably several states had much higher reimbursement for work comp than group health (CT, IL, NJ are three).

Key finding – “A 20% growth in WC reimbursement rates for office visit related services equates to a 6% increase in the odds of a soft tissue injury being called work related.” [paraphrase, may not be exact quote]

In contrast, there was no difference in trauma-related cases, which implies providers

David Deitz, MD noted a key consideration not addressed – the microgeography of health care varies quite dramatically within states and may be an important driver; this may be a fruitful area for further investigation. (the Truven database doesn’t allow for this type of analysis) Dr Deitz also noted the American Academy of Orthopedic Surgeons evidently recommends physicians consider type of coverage when determining whether or not to perform surgery.  (paraphrasing Dr Deitz)

Notably, patients may get significantly richer benefits if the claim is determined to be work comp due to indemnity benefits.

The researcher, Dr Olesya Fomenko, determined that two states in particular saw significant financial impact of this; there was a multi-million dollar impact in IL and TX due to the higher medical costs AND indemnity expense associated with the “higher number” of work comp cases due to case shifting.

A key question not addressed is this: how is the treating doc’s pay affected by the payer type?  Not the overall reimbursement differential, but the payment to the doc who actually makes the causation determination.

 


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.