Category: Providers

Dec
23

Malpractice investigations

Posted by Joe Paduda on Friday, December 23rd, 2005 | Comments

Insurance Journal reports on changes in the way the State of Maryland will deal with investigations of potentially problematic physicians in yesterday’s edition. In a study conducted by the Baltimore Sun newspaper, 120 of the state’s approxinmately 17,000 physicians were found to have five of more malpractice claims in a ten-year period.
The review of the state’s policies was initiated when a new review board found the staff was swamped and overloaded, investigating too many situations where problems did not appear to be significant. In revamping the criteria, the review board decided to:
“investigate automatically only when doctors settle three cases for $150,000 or more each over five years. Pinder (head of the review board) said the board also reviews any doctor who resolves a claim about care in the past five years with a payment of at least $1 million”
There were 11 settlements over $1 million, and only 4 physicians met the three cases for $150,000 or more over five years criterion.
There are wide differences among the states in the criteria and process for investigating physicians, ranging from Nevada and Pennsylvania which investigate each and every claim, to Massachusetts which reviews any physician with three or more claims in a ten year period.

Dec
20

Pay for Performance – does it work?

Posted by Joe Paduda on Tuesday, December 20th, 2005 | Comments

Pay for performance, or P4P, is gaining traction amongst health care organizations, policy types, and some health plans as a potentially promising way to link compensation to outcomes. A study published in October indicates that P4P as presently practiced is in need of refinement and improvement.
The study published in JAMA and sponsored by the Commonwealth Fund, found that physicians compensated under a P4P program improved their performance in one of three metrics, showed no significant improvement in the other two, and three-quarters of the physicians receiving bonuses under the program were performing at the standard before the program’s inception.
The program compared 200 physician groups in two of Pacificare’s networks with a P4P program and compared them to a control group in another network that did not have a P4P program. Of note, the quality of care for two of the indicators, mammography and hemoglobin-A tests, improved for both the test and control groups, while the P4P groups’ performance improved 5.3% for Pap smears while the control group’s performance was only up 1.7%.
That said, physicians with the lowest quality scores before the P4P was initiated showed the most significant improvement. One wonders if this was not deviation towards the mean, or the Hawthorne effect, or if the improvement was driven by the program itself.
Obviously these programs need some improvement, and this study should not be interpreted as conclusive evidence that P4P is a non-starter. However, the industry would be well-served to take to heart some of the findings. One of the more obvious is that 75% of the physicians winning bonuses were already performing at that level before the program started. There are two views of this. One is that the payment reflects appropriate compensation for high-performing docs, and this compensation is a just reward for performance.
The other view is that the additional payment, as high as $270,000 for a physician group with 10,000 patients performing at the highest possible level, is a waste of resources as the extra pay is not justified by any improvement in performance.
Clearly, pay for performance is a contentious subject, with various groups including CMMS (contemplating P4P in Medicare) taking an active interest.
What does this mean for you?
Provider compensation is a dynamic field, with previous efforts at capitation, risk-withholds, Fee for service, U&C, DRGs and others all found to have limitations.
This may be overly simplistic, but simply finding the best docs and sending patients to them strikes me as the smartest, and easiest, thing to do.

Dec
2

Concentra’s future

Posted by Joe Paduda on Friday, December 2nd, 2005 | Comments

Concentra’s naming of Norm Payson MD as the company’s new “non-executive” chairman of the board appears to be yet another sign that Concentra is positioning itself for sale or IPO. Long rumored to be preparing to go public, Concentra may be closer now than at any time in the past few years.
Payson got his start in managed care at HealthSource in New Hampshire 20 years ago. He and others built that HMO from the ground up and sold it to CIGNA in 1997. He then joined Oxford in 1998, was there through the turnaround and left it in excellent condition in 2002.
Payson’s role appears to be “non-operational” to say the least; he will be working on strategy issues, providing guidance to senior management, etc. He will be making an investment of $10 million in the firm; before you jump to conclusions, understand that Payson will also be receiving “awards of restricted and unrestricted stock and options

Oct
18

Race, genetics, and medicine

Posted by Joe Paduda on Tuesday, October 18th, 2005 | Comments

A fascinating article about the role of genetics, race, and societal interactions is in today’s New York Times. Before you blow this off, consider the following points.
1. so-called “personalized medicine” is touted by some as the next big breakthrough in medicine, using genomics to customize therapies for individuals
2. there has been a considerable increase in the investment in and marketing of drugs that are targeted to distinct “racial groups”.
3. there is some evidence that this makes sense, and other evidence that it makes no sense whatsoever.
4. the push to unravel the human genome is both supporting and detracting from the “race-based drug development” effort.
5. billions will be invested in research in these areas

Oct
14

Pay for performance study results

Posted by Joe Paduda on Friday, October 14th, 2005 | Comments

Fellow blogger DB’s Medical Rants has an interesting take on pay for performance. Citing a study published in the New England Journal of Medicine, the post notes:
“One underlying principle of the pay for performance movement stems from the belief that we can use incentives to improve adherence to evidence based quality indicators. The crux of evidence based medicine (EBM) follows from an examination of high quality data. EBM eschews belief.
This study tries to understand how P4P might influence physician practice. It finds no positive impact. Rather P4P may simply be a scheme for rewarding high performers…
However, as I hear the debate, most proponents see P4P as a means to improve quality. This article argues against that.”
Changing physician behavior is a windmill that has absorbed billions of dollars and millions of hours of tilting, with little evidence of impact. While the objective is noble, the business case is highly suspect.
What does this mean for you?
Identify the best performing physicians and direct your patients to them. Let others shatter their lances.

Oct
13

ACOEM Survey on providers and payers

Posted by Joe Paduda on Thursday, October 13th, 2005 | Comments

ACOEM, the American College of Occupational and Environmental Medicine, is reaching out to payers – TPAs, employers, insurers, managed care companies, to find out about their interests, priorities, and views on occupational medicine.
The “conversation” between payers and providers is usually limited to voice mail, email, and fax, with the occasional mutterings under one’s breath. Here’s a chance to help improve the dialogue.
If you are involved in this area, take the time to fill out their survey.
Here’s more information.
“Effective occupational medicine: opinions wanted
Want to have an impact on the future of occupational medicine? Do you purchase (or influence the purchase) of occupational medicine services for your organization? Do you manage relationships with medical service providers for your company? If so, the American College of Occupational & Environmental Medicine (ACOEM) invites your opinion via an online survey.
The purpose of the survey is to assist the American College of Occupational and Environmental medicine (ACOEM) in learning more about the current practices, priorities, and point of view of those who pay for and use occupational medical services. In particular, ACOEM wants to learn how company managers and executives in organizations are currently viewing a few major issues in organizational and occupational health. ACOEM also wants to hear what companies look for when choosing physicians to provide either hands-on or consulting medical services for their workers compensation and disability programs.
The survey is being conducted by Crescendo Consulting Group, a national research and consulting firm based in Portland, ME. Results will go directly to Crescendo Consulting Group to preserve anonymity.
The survey should take less than 15 minutes of your time, and individual responses will be confidential. In exchange for participation, ACOEM will provide an executive summary of results to any participants who supply contact information. ”

Sep
27

Concentra’s investor briefing

Posted by Joe Paduda on Tuesday, September 27th, 2005 | Comments

Concentra Inc.’s presentation at the Bank of America Investor Conference earlier this month focused on their continued growth, focus on workers comp, and impact of the acquisitions of Beech Street and Occupational Health and Rehab.
Here are some of the highligts from the presentation and comments on same.
Revenues for 2005 are projected to be $1.1 billion, with EBITDA of $156 million and operating cash flow of $101 million. Revenues are growing organically about 5% per year, while operating cash flow is down from $114 million in 2003 to $98 in 2004 to $101 in 2005.
Workers comp is by far their largest market, driving 70% of revenues. The Beech deal will certainly help diversify Concentra’s revenue base, as Beech is a strong mid-tier group health PPO. Beech’s provider contracts will also be compared to the Concentra contracts to identify the ones with the best rates. This, coupled with the greater buying power brought by Beech, may help Concentra drive better deals with some providers.
Of Concentra’s three distinct business units, by far the highest margin business is network services, with a margin of 31%, followed by the clinic business’ 14% margin. The care management sector, which is primarily field and telephonic case management, was hurt by declining revenues and price compression and returned 6%.
Of note, the clinics saw same store revenues up 6.6% on a 5% increase in visits. This at a time when the WC injury rate has been declining by about 4%.
Thomas made the point several times that after the completion of the OH+R deal, Concentra’s clinics will see one of of every ten workers’ comp injuries for initial care. While that sounds impressive, and is impressive, it is important to note that the clinics only see the routine injuries, and most of the dollars that are spent on WC medical go to the more complex cases that are treated by specialists.
The Beech Street and OH+R acquisitions were expensive at $210 million +. The Beech deal adds significantly to Concentra’s group health product offering. while OH+R will add 26 clinics after 8 existing clinics are closed.
Both Thomas and Kiraly repeated their assertion that Concentra is the industry leader in the WC managed care business, and is a full service integrated services provider. From a sheer numbers perspective, they are correct. However, other entities are leaders in segments of the WC business. For example, Coventry’s First Health is by far the leader in the WC PPO sector. MedRisk is the industry leader in management of physical medicine; and PMSI in pharmacy management.
Thomas noted that because Concentra manages all aspects of the claim, it therefore impacts more claims dollars than other competitors. Not exactly. Intracorp has case management, networks, bill review, peer review, and access to specialty managed care. So do Genex and CorVel. Concentra’s out of network bill negotiation entity (Concentra Payment Services) may well be the industry leader in non-network bill processing, but a host of competitors are now in this space.
While Concentra is not a public company, rumors have been rampant for years of their desire to become one. That, coupled with the large amount of debt outstanding, is evidently the reason for their continued participation in these road shows.

Sep
14

Medicare physician reimbursement cuts

Posted by Joe Paduda on Wednesday, September 14th, 2005 | Comments

The latest news from Washington indicates the cut in Medicare reimbursement scheduled to go into effect on 1/1/06 may actually occur. The reduction of 4.3% is a hot topic amongst physicians, many of whom are claiming they will not continue to treat Medicare patients if the cuts go through.
Two of the key Senators on the Finance Committee (which has jurisdiction over CMS) have stated their desire to rescind the cuts. According to Congressional Quarterly, “Sen. Max Baucus (D-Mont.) said he and Senate Finance Committee Chair Chuck Grassley (R-Iowa) are “not going to let those cuts go into effect this year”.
The fate of the proposed fee reduction will not just affect Medicare. Many group health and HMO reimbursement arrangements as well as states’ workers compensation fee schedules are based on Medicare.
Yet more evidence that when CMS gets a chill, the rest of the health care payers catch a cold.
What does this mean for you?
Keep an eye on Congress’ actions, or lack thereof, on this reduction. Regardless of the action taken or not, it will affect health care payers’ bottom lines.

Aug
29

CHOICE Awards for Workers Compensation

Posted by Joe Paduda on Monday, August 29th, 2005 | Comments

I’ve been hard pressed to keep up with the blog; seven days in Florida starting at the Florida Workers Comp Institute annual conference followed by a three day audit of a managed care firm is to blame. One of the biggest events at the conference was the third annual CHOICE Awards for excellence in workers compensation.
These awards are presented to physicians who exemplify the highest standard of care and demonstrate thorough understanding of workers comp and return to work while communicating clearly and effectively with all parties in the process.
Physicians are the key to effective workers comp and other medical programs.
They diagnose the condition, assess the patient, develop the treatment plan, write the scripts, schedule the imaging, refer for surgery, deal with managed care’s questions and requests for information, monitor progress, and remove obstacles.
In workers comp, docs also identify limits and restrictions, develop return to work programs, recommend job accomodations, coordinate with employers, assess relatedness, and cajole, badger, encourage, and push injured workers back to work.
Many docs do this despite the request from insurers that they perform these services for a “discount” below their list price or fee schedule.
The unfortunate thing is the CHOICE awards are one of the few efforts by payers to publicly recognize those physicians that outperform their peers. And it is not a few docs getting a black plastic award and handshake from an insurance company exec. Over 200 nominations were received, a rigorous judging process was conducted, and all finalists were invited to the banquet. (disclosure – CHOICE is a client).
The keynote speech was given by University of Miami president and former Secretary of HHS Donna Shalala. The sit down dinner was attended by 400+. The band played for each recipient and for all the guests before and after the awards.
And the award recipients deserved all of it.
What does this mean for you?
If you have yet to figure out that physicians are the most important contributors to the success of managed care programs, get with the program.

Aug
24

Aetna’s quality ranking of physicians

Posted by Joe Paduda on Wednesday, August 24th, 2005 | Comments

Aetna announced they will be offering a new health plan network option in northern California and the Central Valley that ranks specialists by several cost and quality indicators. The program, which goes by the unfortunate name of Aexcel, will only include those specialists that meet the Aexcel standards, and will be offered to larger self insured employers.
According to California HealthLine,
“Aetna evaluates them on factors including:
Number of hospital readmissions within 30 days;
Adverse events;
Adherence to clinical guidelines; and
Cost of care — adjusted for the severity of a patient’s illness — relative to the geographic area.
The health plan considers Aexcel specialists to be the top-performing in an area with regard to cost and quality. Employers can include Aexcel in Aetna’s non-HMO health plans, either as an option or a requirement.”
Kudos to Aetna for their courage – physicians who do not meet their criteria will undoubtedly protest, and some may have valid points. But the key is to start somewhere, and this is a great start. The best physicians deserve more business, and docs who underperform deserve less.
What does this mean for you?
More incentive to differentiate your health plan, or select a health plan, based not on a spreadsheet but on the value they deliver, defined as the plan’s ability to help you improve outcomes and costs.