Author: Joe Paduda

Apr
4

Friday catch up and idle speculation

Posted by Joe Paduda on Friday, April 4th, 2014 | Comments

Lots of big info out this week, and a few tidbits about pending deals in the workers’ comp services space too.  Here are the highlights…(for the latest on deals in the work comp space, scroll down)

There’s a lot of confusion about the Obamacare signups; I’ll cover this in detail next week, but here are the facts as of today…

  • more than 7.1 million signed up via the federal and state exchanges (we won’t know the total for a week or so as some state exchanges haven’t posted final March numbers)
  • a lot more – i’d guess a million to two million – bought insurance via the private exchanges
  • about 20 percent won’t pay the premium and there’s some duplication between all the exchanges and other enrollment methods for reasons we’ll discuss next week
  • more than 5 million MORE Americans have insurance today than at the end of 2013.

The net – Obamacare has increased coverage substantially; the uninsurance rate has dropped by 2.7 points.

Meanwhile, Fitch reports the P&C industry is doing just grand, thank you.  Profits are up, loss ratios declined, underwriting margins are improving, and revenue is too.  Thank the continued hard market and expanding economy.

Work comp is doing better as well, altho there’s still a negative underwriting margin.  It remains to be seen if pricing discipline holds, or if some big carriers cross the stupid line.

The “doc fix” is in; Congress passed and the President signed a bill that will increase Medicare reimbursement for physicians by 0.5% for the next 12 months. The bill also:

  • delays implementation of ICD-10 for a year till October 2015 – for an excellent discussion of how this will affect workers’ comp, read Sandy Blunt’s piece at workers compensation.com
  • and does some other stuff which you probably don’t care about and I won’t bore you with.

Work comp services Coventry is trying to sell their marginally–profitable work comp service business lines – we’re talking CM, UM, MSA, peer review, and likely pharmacy. They will NOT be selling the jewels – bill review and the network, because a) they make huge profits; b) bill review really isn’t sellable as the application is quite dated and would require the buyer to transition to a different platform likely resulting in customer defections; and c) they can’t sell the network.

Coincidentally, another large case management firm is also for sale; word is Apax/OneCallCareManagement is currently the leading contender; most likely they will add the asset to their ever-growing list of companies.

And I’d be remiss if I didn’t speculate that Apax is looking hard at the Coventry assets as well. OCCM CEO Joe Delaney has certainly proved himself a competent manager, but methinks the thought of adding these two to the portfolio would give even the best of execs pause…

Enjoy the weekend, watch some baseball, get out in the gardens, and ride your bike.

Apr
3

Sorry about that…

Posted by Joe Paduda on Thursday, April 3rd, 2014 | Comments

well, not really.

I’m referring to yesterday’s annual April Fool’s Day post, in which I “reported” Obamacare would include a single-payer federal workers’ comp system for small employers.  While some chalk it up to my sophomoric attempt at humor, (and they would be right), there’s another, more important takeaway, one that is particularly relevant in the work comp industry.

There’s a lot of mis-information out there, much in the form of reports, statistics, metrics, findings, research, and it often goes unchallenged.  Here are a couple examples.

“Research” published by benefits giant AFLAC claims companies that set up voluntary disability programs saw reductions in work comp claims.  Except the “research” is not credible, isn’t reproducible, is based on nothing more than opinion, and therefore is just marketing BS. (hat tip to Mark Larsen of WorkCompCentral for the info)

The key here is don’t believe “research” unless it is credible, which means there was a solid methodology (asking people their opinion then drawing a statistical conclusion from those opinions is NOT a solid methodology).

Vendor claims that they can “save” X% more than your current vendor on pharmacy/medical bills/provider costs/whatever are often – but not always – pure speculation.  Fact is, unless the vendor making the claim really, really understands what your current program/vendor is doing, how they are doing it, the methodology they are using to calculate results, and reviews the bill/provider/script data, their claims are suspect at best.

That’s not to say that some programs don’t deliver measurably better performance, but unless the vendor pitching you can provide a detailed analysis of why and how they can do better, they’re just blowing smoke.  How can you figure this out?  Simple – ask lots of questions – starting with how, when, who, how much, where.  Dig deep and do not be satisfied with generic marketing-speak answers.

You will find some vendors are only too happy to get into the details, while others get really uncomfortable.  And that tells you a lot about their REAL ability to deliver.

Finally, the April Fool’s post caught more than a few readers, so if you were one, you’re in pretty good company (there were several clients and a few regulators – all shall remain nameless – who fell for it).

What does this mean for you?

Don’t be an April – or any other month – fool.

 

Apr
1

Obamacare exchanges to be used for work comp enrollment

Posted by Joe Paduda on Tuesday, April 1st, 2014 | Comments

Turns out one reason the small employer mandate has been delayed is the Feds are incorporating a national “single payer” work comp program that is not quite ready for prime time.

The POWER (Protecting Our Workers and Ensuring Reemployment) program, which will be administered by the Office of Workers’ Compensation Programs, had been back-burnered while the tech folks worked on the other parts of the site, added capacity, and straightened out the back-end issues related to enrollment, payment, and citizen verification. POWER was not part of the original healthcare reform bill; it was initiated as part of a Presidential directive shortly after PPACA was passed and signed in to law.

Now that the health exchange “glitches” are mostly fixed, the expectation is the workers’ comp program will be moving very quickly. It should be much less complicated, as there will be a single payer (the Feds’ OWCP), a single payment system, and universal benefits and coverage specs.  Detailed in the POWER initiative, the program will measure employers’ performance across eight metrics, with those employers failing to demonstrate improvement targeted for additional Federal oversight.

DOL is targeting June 1 as the implementation date; small employers (26-99 employees) will be required to sign up for POWER as their current workers’ comp policies expire.  (The POWER press release says this should make for an “orderly and straightforward transition”; safe to say that’s highly doubtful).  Evidently employers WILL be allowed to “opt out” of POWER; this requires completion of an application of exemption, documentation of three years’ ex mods below 1.00, and a commitment from their current carrier to maintain current premiums; it has to be renewed every year.  While not too onerous, the paperwork and reporting burden may well give employers pause.

According to an OWCP press release, the POWER program is intended to “reduce the administrative burden on small employers while ensuring rapid, professional, and fair adjudication of claims for injured workers.”  Although this will “negatively impact” some insurance companies, the (anticipated) reduced expense for employers coupled with the additional oversight by OWCP staff will help “improve the competitiveness of America’s small business.”  POWER will use the OSHA reporting system to cross-index claims reporting to ensure all claims are captured; evidently there’s sensitivity/concern that some employers will avoid reporting claims to reduce the risk of the dreaded “additional Federal oversight.”

The details – The federal fee schedule will likely be used for medical treatment, and indemnity benefits will be almost certainly be pegged to the existing DOL standards.  OSHA will have to revamp their reporting process, with much more emphasis on timeliness and additional data points captured; expect the Exchange website to be used for claims reporting.

What does this mean for you?

We can only hope it doesn’t take months to figure it out.

Mar
31

Compounding drugs – myth v reality

Posted by Joe Paduda on Monday, March 31st, 2014 | Comments

There’s a lot of nonsense circulating about the wonders of compounded medications, almost all of it promulgated by companies and people in the compounding industry.

What’s notable about all of their claims is the complete lack of scientific research supporting their claims that more people need compounds, that compounds work, are safe, and deliver better results than non-compounded medications.

Turns out the reason these advocates don’t cite research is – the research doesn’t support the use of compounds for more than a very few patients.

That’s the key takeaway from CompPharma’s just-released research paper; Compounding is Confounding Worker’s Compensation.  You can download it here.

Here are a few of the findings:

  • Compounds have not been proven to be more effective than commercially available, manufactured drugs that have been approved by the U.S. Food and Drug Administration (FDA) in similar classes. In fact, efficacy data in general are non-existent for the types of compounds seen in workers’ compensation claims.
  • Using compounds poses risks to patients
  • Compounds are often not medically necessary
  • Compounds are expensive

Despite reports of outrageous cost inflation, dozens of deaths due to faulty processes and poor quality control, and little progress in improving oversight, compounding continues to plague work comp.

What does this mean for you?

Time to develop and implement a policy for approving and reimbursing for compounds – one based on science, and not marketing nonsense.

Note – I am president of CompPharma, altho I had little to do with the actual research paper; credit for that goes to the pharmacists and government affairs people from CompPharma’s member PBMs.  They did a terrific job.

Mar
28

Friday’s catch up post

Posted by Joe Paduda on Friday, March 28th, 2014 | Comments

A week on the road ends today – if flights are on time and the weather gods are merciful.  Here’s what I missed while sitting on planes and in airports…

This week marked the 103rd anniversary of the Triangle Shirtwaist Fire, the tragedy that led to major changes in employment law, drove adoption of workers’ compensation coverage, and focused the nation’s attention on abusive employers – here in the US.  The rest of the world has a long way to go, as we’ve seen.  There’s a very good, and very graphic, video here that shows the rest of the world needs their own drastic changes in employment law and policy. What happened 103 years ago in New York happens far too frequently today – just not here. 

With the witching hour fast approaching, it looks like the PPACA rollout will end up with somewhat more than 6 million enrolled, most taking advantage of a subsidy or covered thru Medicaid.  Before we all start declaring victory or pronouncing defeat, let’s just sit back and realize we won’t know if PPACA’s goals of reducing cost, improving outcomes, and covering many more Americans will be realized for at least a few years…

Saw an item in Insurance Thought Leadership by one Al Lewis claiming that wellness is a fraud, an” industry conceived in lies, retractions, and hypocrisy.” Lewis doesn’t suffer from a lack of ego; he claims, among other things, to be “widely credited as” the inventor of disease management (now that’s a ballsy assertion). Lewis’ assertions about wellness are similar; simplistic to the point of being misleading.  

Fact is, the wellness story is much more nuanced, more complex, and while there are certainly misstatements and over-the-top claims (akin to naming oneself the “inventor of disease management), there is ample evidence that properly conceived and implemented programs can and do have measurable, positive effects on individuals’ health status and health costs. A RAND study reported:

  • We found statistically significant and clinically meaningful improvements among program participants in exercise frequency, smoking behavior, and weight control, but not cholesterol control.
  • Participation in a wellness program over five years is associated with lower health care costs and decreasing health care use. The average annual difference is an estimated $157, but the change is not statistically significant.

I’d note that almost all business decisions are made based on evidence that is not “statistically significant“, so don’t get caught up on that metric.  More evidence of wellness programs’ effectiveness is here and here.

Back in the real world, a 12 month fix for the Medicare physician reimbursement mess known as SGR will happen before the end of the month. The House passed legislation yesterday, and word is the Senate will follow shortly.  There’s a few other provisions in the bill that, among other things, reduce long term care reimbursement, delay ICD-10 rollout for another year, and cut Medicare payments to rural hospitals.  These may or may not, end up in the final bill that gets signed into law.  I’ll keep you posted.

This matters to workers comp as all states with doc fee schedules use Medicare as the basis (except IL).  In only a couple states is there a “direct” linkage, but what Medicare does tends to eventually work its way into WC fee schedules, and, perhaps more importantly, affects physician behavior.  A cut would motivate docs to shift costs to work comp…

Sticking with work comp, the rumors that Aetna will sell off its work comp subsidiary continue.  As I’ve noted ad nauseum, that’s just not possible.  Can they sell PBM First Script?  Sure, and well they might.  How about their case management and UR and IME and other “ancillary” business? Well, if anyone wants to buy it, perhaps.  Bill review?  no way – unless they do a renewal rights deal, as the current application is just not viable. That, and the fact that Aetna laid off most of the tech support staff indicates they may just let it fade away.

Which leaves the work comp PPO – the Coventry network. Word is Aetna execs have been trying to figure out how to sell it – except it isn’t “sell-able”, at least not for a price that would be anywhere close to the money they are making off the network today.  As I said a couple years back; 

if Aetna wanted to sell the WC business it is hard to see how it could transfer the network’s provider contracts to the new owner as most are a combined WC/group/governmental contract. Sure, Aetna could guarantee access to their contracts going forward for some period certain, but given Aetna’s history with workers comp, any buyer would be very reluctant to bet the future of their investment on that guarantee.

I do have first-hand knowledge of this; about 15 years ago UnitedHealthcare sold MetraComp’s WC network to NHR, which was then sold to Concentra. (I worked for then consulted for MetraComp) There was a deal in place wherein UHC was supposed to maintain the network contracts; didn’t happen.  Discounts declined, the network shrunk, and the asset value diminished rather quickly.

I’d be remiss if I didn’t make sure you are going to Operation UNITE’s Prescription Rx Summit in Atlanta April 22 – 24.  The Summit is focused on all aspects of the prescription drug abuse problem – the top problem in worker’s comp today.

Enjoy the weekend – hope your flowers are blooming!

Mar
27

HWR is up

Posted by Joe Paduda on Thursday, March 27th, 2014 | Comments

As the March 31 “deadline” for enrollment in insurance approaches, the good folks at Health Affairs have put together the best health policy blog posts of the last two weeks and present them to you for your edification.

And managed to do this while keeping up on March Madness too – Christopher Fleming is one impressive guy…

In these days of less and less insight from the mass media, we’re fortunate indeed to have very smart – and very good writers – working for you – and for cheap, too!

Mar
26

Another bomb drops on physician dispensers

Posted by Joe Paduda on Wednesday, March 26th, 2014 | Comments

Allstate Insurance filed suit against physician dispensing “technology” firms Infinite Strategic Innovations Inc (ISI) and Doctors Medical LLC earlier this week.  This is the second in what may be an-ongoing series of legal actions by the giant insurer, and comes on the heels of a settlement in their earlier suit against dispensing “technology company” Automated Healthcare Solutions.  

While the AHCS suit has been dismissed, I think we can assume Allstate made out quite well in the “dismissal”; Allstate doesn’t move unless they are very confident, and they come with overwhelming force.  Even the most arrogant, litigious, and downright nasty opponents are going to quail in the face of an Allstate lawsuit. While no one’s talking,   it is logical that Allstate would not have allowed the suit to be withdrawn unless they were pretty darn happy with the resolution.

My guess is Doctors Medical’s owner, Tom Mollick, is having a very bad week. And things are not going to get any better for Mollick et al.

From reading the complaint, Allstate is claiming ISI and DM received payments totaling $93,265 for PIP claims in Michigan, and has billed Allstate another $443,751 for other claims.  Allstate wants (most of) their money back, doesn’t want to have to pay most of the pending claims, and wants ISI and DM to agree to stop billing the insurer.

The key parts of the suit include:

  • request for declaration judgment
  • a statement that ISI and DM have no standing to bill as they are not medical providers
  • request for restitution for claims adjusting, administrative, and legal costs
  • assertion that ISI and DM operated “under the umbrella” of Rx Development Associates, Inc.  

There’s a lot more to this, but the net is this.  This is the second in what may well be a series of suits against physician dispensing companies; my guess is Allstate won big in their initial suit against AHCS, and is pursuing Mollick now, and will go after other dispensing companies as well.

As the AHCS suit was withdrawn, we don’t know what the resolution was – and never will.  And more’s the pity, because Allstate may well have solved its problem, but did nothing to address the problem for the rest of the industry.  That’s understandable as it isn’t their lawyers’ job to fix other insurers’ problems.

Nonetheless, it would be…helpful if the result of these legal actions was public knowledge – it would give pause to the other dispensers and their cronies, alert other insurers to the issue, and, over the long term, reduce Michigan auto insurance costs.

What does this mean for you?

Check your payment records, figure out how much you’re paying dispensers and their enablers, and do something about it.

 

Mar
25

ACA rollout – how’s California doing?

Posted by Joe Paduda on Tuesday, March 25th, 2014 | Comments

If there’s a state that’s key to the success of the ACA, it is California.  Peter Lee, Exec Dir of Covered California (the Golden State’s exchange) gave a status update.

Lee reported enrollment in insurers via CC is right about a million people – and this doesn’t include the Medicaid expansion. Looks like about 20,000 are signing up per day of late. 

Here are the highlights.

– success is predicated on providing affordable health plans – and there are several plans available in each area, with some having a dozen or more options.

– about 26% of enrollees are in the 18-34 demographic; Lee sees this as a work-in-progress, and considers them the “Young Convincibles”.

– CA is an “active purchaser”, which means they carefully oversaw the health plan bidding process to ensure the plans available on the exchange were comprehensive, affordable, and many.

– about 2 million will get subsidies to buy health insurance

– LOTS of marketing, outreach, advertising, partnering with agencies.  But the most effective part has been via community organizations.

– enrollment has been greatly aided by facilitators.

– a lot of analysis will continue to assess outcomes, access, and disparities by different demographic group, and Covered California will move past the enrollment phase and into the improvement phase over time.

 

Mar
25

ACA – how California’s health plans are adapting

Posted by Joe Paduda on Tuesday, March 25th, 2014 | Comments

I’m honored to be speaking at Keenan & Associates’ annual Summit today, and they’ve graciously allowed me to live blog from the Summit.

The day begins with a panel of California health care executives discussing how their companies are adapting to ACA.  Representatives from Kaiser Permanente, Aetna, Anthem, HealthNet, United Healthcare, and Blue Shield of California answered questions from Keenan’s Henry Loubet and the audience.  Here are a few highlights.

First, the pace of innovation, the investments these companies are making, the focus on smart disease state management, and the effort to get closer and closer to the member are all striking.  There is a LOT going on and I got the sense that these companies are working feverishly to adapt and build and innovate.

A big area of focus was on ACOs/tailored/narrow/high quality networks, which evidently have been a big part of most health plans’ strategies. Loubet wrote about this recently here.  The companies represented seem to be fully invested in ACOs, with several working with multiple ACOs.  They are measuring results, and according to Blue Shield, the metrics are looking quite positive.

ACOs are not monolithic or identical across companies, rather they are highly customized with geographic areas, populations, reimbursement models, and state regs all influencing design and structure.  Simply put, they are akin to the old HMOs, where the focus is on an integrated health care delivery system and consistent, high quality care management.

Working with docs to identify and assertively manage patients with specific disease states is also a big focus, and several of the speakers discussed how they are using technology – smartphones, apps, on-line video consults with a doc, and electronic medical records – to do this.

Someone asked about the integration of WC and group health, and the speakers seemed to agree that ACA’s data integration may help move this closer however there’s so much focus on addressing ACA implementation that tying group and work comp together won’t happen any time soon.  

Finally when asked about possible changes to ACA going forward, the panelists’ comments included; a delay in implementing the small employer mandate; allow consumers to keep their current plan for longer; and possibly postpone fees and taxes (which ones weren’t identified).

Mar
21

Friday catch-up and quick takes

Posted by Joe Paduda on Friday, March 21st, 2014 | Comments

Yikes – where did the week go?

Apologies for not keeping up with the daily blogging – too darn much paying work these days.  Alas…

So here are a few quick takes.

Prime Health got $8 million in debt financing from LongueVue Capital; this likely means the PPO won’t be on the block any time soon.  No word on what they’re going to use the funds for…

Drug compounding hit the big time this week, with the news that both the FDA and HHS’ Office of the Inspector General are looking into compounding.  This from AIS’ Health Business Daily: (free sub req)

“…state-regulated compounding in hospitals and federal oversight of manufacturers — are colliding, as the FDA in January urged hospitals to buy drugs only from compounders that voluntarily register with the agency and abide by “good manufacturing practices.”

Compounding — which is the mixing of two or more ingredients to tailor a drug to a specific patient’s needs — also is a new target on the 2014 Work Plan for HHS’s Office of Inspector General, with the OIG eyeing practices inside hospitals and oversight by Medicare accreditors.

PPACA/Obamacare

About 80% of survey respondents want their elected officials to fix O-care – not make it fail.  Fully three-quarters of non-Tea Party Republicans want their representatives to fix – not kill – Obamacare…and the less-educated one is, the more likely they are to oppose Obamacare.

Of course, among those who disapprove are some who want a single payer system.

Re Obamacare implementation, there were mis-leading headlines and ledes out there saying that insurance markets are less competitive than they were pre-reform.

Once again, these media got it wrong.

Here’s what the study  – which only looked at 7 states – really said:

“early indications suggest that some exchange markets are more competitive than their states’ individual markets before the ACA (emphasis added)…Two states (Connecticut and Washington) that have also been successful at enrolling consumers seem to have less competition than in their 2012 individual markets.  Results from the remaining states generally show either similar levels of competition as their pre-ACA markets or mixed signs.“(emphasis added)

There’s a great infographic up at JAMA’s site showing what people are paying under Obamacare – check your state here.

Finally, myMatrixx has a webinar on specialty pharma in work comp next Tuesday at 2 PM eastern.  Highly recommend it – this is a rapidly growing and very complex issue and Phil Walls is a great “explainer”.

Enjoy the weekend, best of luck in your brackets, and here’s hoping my beloved Orangemen make it thru!