Workers comp bill review – key findings from the latest Survey

Many payers’ bill review systems are still not electronically connected to medical management applications; bill review prices are lower than they were three years ago, and payers are increasingly interested in bill review applications’ rules engines.
Those are three of the key findings from the latest Survey of Bill Review in Workers Compensation, and result from answers provided by 24 respondents from payers large and small.
We last conducted the survey back in 2009, and waited three years to see how quickly the industry would evolve. In some ways there’s been a good deal of change; in others, not so much.
The connectivity issue is perhaps the most visible. While there’s no doubt more payers have done a lot to tie bill review to medical management systems, many are still relying on “manual” processes to ensure bills for unauthorized or denied care are not paid or otherwise handled correctly. This greatly increases the chance for error, thereby increasing costs and wasting the time and money spent in the UR process.
Prices have declined, both for outsourced bill review and for payers leasing vendors’ systems, this despite the consolidation among application vendors that’s removed several once-significant players from the industry.
What has changed is the focus on auto-adjudication and interest in rules engines, driven – according to respondents – by a quest for greater efficiency and consistency.
With prices for bill review coming down, it’s not surprising interest in efficiency and automation is up; the soft market and pressure on admin expense is certainly a factor as well along with the desire to more consistently – and accurately – pay medical bills.
I expect the Survey report will be available by the end of next week. More to come.


The Florida comp conference – quick takes

With a weekend to recover, here are the quick takes from the WCI Conference in Orlando.
The ‘Headline’ keynote – Kathleen Madigan – was terrific. Glad I didn’t have to follow her; my “Industry Keynote” didn’t inspire many grins or guffaws, but did generate some outright hostility from the physician dispensing/repackaging folks.
Liberty’s physician meeting was very well attended; word is there were almost a hundred physicians at the get-together, a credit to Jean Feldman, their local Florida managed care exec. Kudos to Liberty for reaching out to treating physicians to strengthen relationships.
Saw an interesting piece of technology from CORA rehab – an iPad-based tool that serves as a teaching tool, enables patients to record and document their home exercise, and communicates w the PT and others involved in the case. Will be in use in January; they’ve invested a great deal of thought into the app and it looks promising.
The emphasis on broadening the conference’s appeal to a national audience looks to be paying off. There were attendees from everywhere, including Hawai’i, and topics of interest to people from all around the country.
Progressive Medical’s analytics capabilities are pretty impressive – that’s the report from a couple folks who attended their luncheon.
One of the strengths of WCI is a bit of a shortcoming as well; the plethora of audience-specific tracks (regulators, judges, medical issues, claims, etc) means there are not nearly enough “cross-stakeholder sessions” where judges hear from doctors and regulators and vice versa. This is a medical-legal system, and the more perspective we have on the various pieces and parts of the “system”, the better.
Definitely a younger and hipper crowd than at other conferences, but that’s to be expected when adjusters make up a big percentage of the audience. I have no idea how women walk in those five inch heels, but there were lots who somehow managed. And what’s with all the shirt tails out?
I know, showing my (advanced) age…
Overall – a LOT of information available, many excellent sessions, plenty of opportunities to party in the suites; need more cross-stakeholder discussion and better attendance at some really solid presentations.


Taxpayers’ profit on AIG bailout

Yesterday brought the welcome news that the Fed completed the sale of the last of its AG holdings, generating a profit of $6.6 billion.
In total, taxpayers have earned almost $18 billion dollars from the Fed’s investment in AIG and subsequent sale of the company’s assets. We still own 53% of AIG, whose stock is up 46% so far this year.
The highly-controversial decision to use federal funds (taxpayer dollars) to prevent the meltdown of what was then the largest P&C insurer in the nation required $125 billion.
I – and everyone else – am happy and relieved that our dollars didn’t disappear. That said, I’m sure we’re all hoping we don’t have to make that kind of a bet again. What happened to AIG – a relatively tiny subsidiary somehow bankrupted a huge company – can’t be allowed to happen again.
AIG was so deeply entwined in international finance and business that we had no choice but to bail the company out when their investments in credit derivatives went horribly bad. While some would argue that government should have let the chips fall where they may, the cost – to individuals, taxpayers, governments, the economy, businesses – would have been catastrophic.
If the catastrophe was limited to AIG and its shareholders, fine – let ’em suffer. But it wouldn’t have been. In fact, thousands of companies, millions of individuals, hundreds of governmental entities would have been bankrupted/forced out of business/left without pensions if AIG had disappeared.
It’s one thing to talk tough about some fat-cat finance guy losing his Bentley and Gulfstream; it’s a whole different thing when your neighbors lose their pensions. And there’s no question an unmanaged bankruptcy of AIG would have led to that, and other consequences. Such as:
– AIG had very close financial ties to many European banks, ties that would have brought those banks down and done major damage to that continent’s economy.
– AIG provided the underpinning for many pension funds and retirement plans; its financial instruments guaranteed the returns for pensioners.
– It owned many of the airlines’ airplanes, planes that might have been repossessed if AIG went under.
– AIG insures many Fortune 500 companies, and is among the largest writers of workers comp in the nation.
– It was a large individual auto insurer as well.
– AIG insured billions of dollars of cargo in transit across the world’s oceans; a bankruptcy would have increased costs significantly.
AIG insured many other financial institutions against the risk of loss from those institutions’ investments. If that insurance was no longer there, the other financial institutions would have had to dramatically change their financial projections – which may well have led to their demise.
I’m no economist but it is abundantly clear an unmanaged bankruptcy could well have led to a world-wide depression of frightening proportions. The feds had to choose between a bad choice and a horrible one – and they chose the bad one.
Of late AIG has been a big buyer of non-government backed mortgage securities, adding stability to the housing market – a key to continuing the economic recovery.
What does this mean for you?
Let’s hope our elected officials are paying attention.


What comp insurers will pay for

The Hartford wants to pay for what works, not pay for stuff that doesn’t and doesn’t want to argue.
That was the one-line statement from Medical Director Rob Bonner in his talk at the just-concluded WCI.
Bonner went on to discuss how the Hartford defines “what works” and how they evaluate treatment plans that deviate from generally-accepted standards of care/Evidence Based Medicine (EBM).
I reviewed my notes from Dr Bonner’s talk after several comments on yesterday’s posts lamented/complained/squawked/expressed outrage that insurers had any right to determine the medical necessity of treatments much less not pay for treatments deemed not effective.
When you consider the wide variation in practice patterns reported by WCRI’s Dr Rick Victor yesterday, the weakness of the commenters’ arguments become crystal clear.
Notably, Dr Bonner said guidelines don’t work for all patients in all situations; treatment outside of guidelines may be appropriate but only if treatment within guidelines has failed.
Bonner concluded with a very interesting discussion of how payers should – and the Hartford does – look at guidelines and the interaction with providers based on guidelines. It is clear they are central to the way the Hartford medically manages WC claims, and that the use of guidelines is based on driving to better outcomes. It is equally clear that the onus is on the treating doc to develop a treatment plan that gets to a defined result if and only if standard EBM guidelines don’t work, with “work” defined as functional improvement.
I’d add that insurers have this thing called “fiduciary responsibility” that requires them to pay only for services that are deemed appropriate and necessary. That doesn’t include procedures that have been demonstrated to show no positive impact on outcomes; examples may include some cold therapy devices, passive motion machines; certain drugs and surgical procedures.
I’d also add that some insurers are “bad actors”; denying treatments arbitrarily, losing documentation, and generally doing whatever they can to avoid paying as much as possible. That said, in my experience these crappy companies are in the minority.
What does this mean for you?
Practice within guidelines, and if you don’t, be prepared to show why it makes sense to do something different and describe where the treatment is headed.


Is there unnecessary medical care in workers comp?

That’s defined as care that does not improve patient outcomes, and it was the subject of Dr Rick Victor’s concluding remarks at the WCI conference. And the answer is, well, let’s consider the data first.
First, who cares? Not my problem, right? Consider that other research indicates the average household is working 4 weeks just to pay for the estimated total amount of dollars spent on unnecessary care.
When you put it in that perspective, it becomes very, very real. Dr Victor went on to discuss various indicators of wide variations in medical practices in comp. For example, docs inassachusetts are ten times more likely to prescribe schedule ll narcotics when prescribing narcotics than physicians in texas.
If you are prescribed narcotics in Louisiana you are four times more likely to become a long-term user of narcotics than in the lowest ranked state.
If you have a disc problem, you are almost three times more likely to get back surgery if you are in Tennessee than if you live in California.
Well, perhaps there are financial motivations at play. Victor reported their research indicates surgeons that own a surgery center do 76 more surgeries each year than non-owners.
And yes financial ownership is a driver, but owned ASCs are more efficient so they can do more, and owners were usually operating more often before they became owners.
But with all that, there are still 20% more surgeries done by docs who own ASCs when you account for these confounding factors.
Are they unnecessary? Well, Medicaid patients weren’t getting more surgeries, work comp patients were. And by the way, the same 20% increase was seen in colonoscopies.
And that’s not even getting into the huge differences in prescribing patterns exhibited by docs who begin to dispense drugs out of their own offices.
What does this mean for you?
Returning to the headline question, I’d suggest there is ample evidence that suggests there is indeed a lot of unnecessary medical care.
And every year you work until January 29 just to pay for that unnecessary care.


And where were you??

Yesterday afternoon the medical directors from two of the three largest workers comp
Insurers told listeners at WCI precisely what providers needed to do to get paid.
And you were…where?
Providers’ and vendors’ complaints about getting paid are constant and loud. Waaaah waaah waaah is what payers hear from providers far too focused on billing and not near enough focused on delivering services intended to speed healing and return to work.
So Dr Rob Bonner’s brief talk detailing exactly what the Hartford would and would not pay for was exactly what providers needed to hear. There were very few providers in attendance, far fewer than have booths on the trade show floors, advertisements hanging from the rafters, events in their suites.
I guess it’s far more important to pass out trinkets to every Tom Dick and Mary walking y your booth than actually listen to the medical director of a top-four insurer tell you what he wants to buy. Or break away from that lunch date to hear David Deitz of Liberty Mutual tell you how he defines quality in medicine.
Why are you even IN Orlando?


Aetna to acquire Coventry

No this is not an April Fools prank. Aetna announcedtoday it will acquire Coventry Healthcare. The transaction is is in cash and stock and is valued at $7.3 billion after accounting for aetna’s assumption of Coventry’s debt.
The deal will give considerable strength in a number of key secondary and tertiary markets particularly in the central Midwest. It also makes Aetna a major power in Part D, strengthens the company’s Medicaid position, and puts Aetna back into the workers comp business.
This last is rather interesting. While Coventry’s workers comp revenues have been pretty much flat for five quarters, it is a big cash generator. However Aerna recently shut down its workers comp business (consisting of a network marketed exclusively thru Coventry) and management of that unit was not interested in the sector.
I’d be surprised if Aetna doesn’t keep their new work comp unit operating; cash is precious as they prepare for a post-2014 world and David Young’s unit has shown itself very good at generating lots and lots of green.
It is quite clear many other operating and administrative operations will see layoffs. Aetna expects $400 million in synergies ie lower costs – and most of that will be in the form of staff reductions.
From the official press release…
Adds growing individual Medicare Advantage business
Substantially increases Medicaid footprint
Improves Aetna’s positioning and reach in Commercial businesses
Adds low-cost product set built on value-based provider networks
Expected to be modestly accretive to Operating EPS in 2013, $0.45 accretive in 2014 and $0.90 accretive in 2015, excluding transaction and integration costs


Paul Ryan’s evolving stance on deficits and Medicare spending

Rep Ryan has taken what, by any definition, is a very bold and aggressive position regarding Medicare. He has – quite rightly – acknowledged that Medicare’s current financial trajectory is unsustainable. While one can argue with Ryan’s solution, one cannot disagree with the diagnosis.
He has also been in the forefront of the deficit debate, again rightly describing the fiscal disaster that awaits if we fail to control entitlement spending.
Paul Ryan’s faith in the free market is obvious, and is evident in his approach to resolving the Medicare cost problem.
One of the tenets of that faith in the free market is that better/cheaper products and services will win out over costlier/less effective alternatives. The thinking is, over time consumers will force suppliers to improve their products and reduce the cost of those products.
Unfortunately, Ryan has specifically voted against basing payment on a product’s effectiveness, and in so doing, has undoubtedly helped increase medical costs while not improving outcomes.
I’m referring to the Medicare Modernization Act of 2003, which Rep Ryan supported.
MMA does not allow CMS to alter reimbursement on the basis of efficacy.
If a new drug or device comes on the market and is only 1 percent as effective as the existing drug or device, CMS cannot consider that effectiveness when determining reimbursement.
Here’s how the Kaiser Foundation described it:
“The Centers for Medicare and Medicaid Services (CMS) was precluded by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) from incorporating results from the comparative effectiveness [CE] research authorized under MMA into its coverage decisions for Medicare.”
The pertinent language from the Act reads as follows – CMS will pay for items or services “reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member” (Fed Reg 65-95, p 31124- 31129, 2003 MMA); there is no mention of cost).
So, we taxpayers funded CE research, yet the feds can’t use that to ensure our taxpayer dollars are spent appropriately. And they can’t because the people who voted for MMA – including Paul Ryan – forbade it.
There’s more.
One of the other impacts of the Medicare Modernization Act was the reclassification of 6.2 million Medicaid recipients; low-income elderly and disabled people who had been receiving drug coverage through Medicaid were moved into Part D, where they got the same drugs, just at higher prices.
Medicaid negotiates with manufacturers and gets about a 26% price cut, under MMA Medicare is prohibited from doing so, so we taxpayers only get about 8 points off the cost. As a result of this language in the Act, pharma’s profits increased a bit under $3 billion dollars per year – a direct transfer from taxpayers to private industry.
The difference between Rep Ryan’s avowed belief in the free market and laser-like focus on deficit reduction and his strong support for MMA is striking.
It isn’t just a difference, it is Jekyll-and-Hyde like.
The vote for MMA increased the deficit and eliminated pay for performance, while his current persona rails against that very behavior.


Responsible opioid prescribing – your support needed

From a note I received from several folks –
I’m writing in the hope that you’ll submit comments to FDA limiting drug manufacturers’ promotion of the long-term use of opioids for chronic non-cancer pain.

Here’s the link where you can submit comments:
As you may have heard, a couple of weeks ago the group Physicians for Responsible Opioid Prescribing filed a petition with FDA. The petition will prohibit drug manufacturers’ promotion of the long-term use of opioids for chronic non-cancer pain and the medical community will be informed that this practice has not been proven safe and effective.
In the comments box, say something like:

I support PROP’s petition placing controls on drug manufacturers’ promotion of the long term use of opioids for chronic non-cancer pain. Until and unless there is sound scientific evidence of the efficacy of opioids for CNCP this promotion should be severely limited.

More detail…
From PROP – “We believe that this will help reduce overprescribing of opioids. And since it’s overprescribing that’s harming pain patients and fueling the opioid addiction epidemic, the label change could help bring this public health crisis under control...This request has received support from members of Congress, including Rep. Mary Bono Mack and Hal Rogers, so we believe that FDA is paying close attention.”
You can read the petition here; and here’s a press release about the petition that was issued by Public Citizen:
FDA just started receiving comments from the public about the petition. It takes just a couple of minutes to submit comments. And just a few sentences are fine. Just make sure to state clearly in the first or second sentence that you support the petition. If you want, you’re able to upload attachments, including medical articles, newspaper stories or anything that might help you get your point across.
FDA will periodically post comments that are submitted. So far, comments opposing the petition outnumber comments supporting the petition… so PLEASE submit your comments and please ask others to submit comments too.
The petition is here.