The worst provisions of HB1465, aka the “any willing provider whether or not they can spell “workers’ comp” can join an MPN” bill have been removed from the text.

Now, we get to deal with an almost-as-bad bill, which henceforth shall be known as the HB335 – the “Make Adjusters Jump to Inappropriate Conclusions Act”.

Among other things, the MAJIC Act:

  • forces employers to decide if a filed claim is or isn’t compensable in 45 days instead of today’s 90; and
  • forces employers to pay up to $17,000 for medical care while the claim is being investigated.

The MAJIC Act creates problems in an attempt to solve others that don’t exist. 

About one of every eight claims ultimately judged compensable takes 45 – 90 days to investigate.  So, the MAJIC Act would force employers to accept or reject a significant chunk of claims without a full investigation.

I can hear the counterargument now…”well adjusters should just work faster!”  Well, “pushing on a rope” isn’t much of a solution…because adjusters don’t control:

  • whether and when a doctor sends medical records;
  • whether or not a patient responds to calls;
  • whether a qualified medical professional can schedule an appointment;
  • whether or not an investigation has been completed and all relevant information collected;
  • and a lot of other materially-important pieces of the puzzle.

The result will be more provisional denials, leading to more litigation, and higher cost for everyone with no benefit whatsoever for folks injured or sickened on the job.

Then there’s the 70% increase in the employers’ medical liability for claims that have been reported but not accepted. How that number was decided upon is a mystery, because, according to a study just published by CWCI;

  • less than 1 out of every 165 claims incurred costs of more than $10,000.
  • 1 of every 500 denied claims had costs more than $10,000

SB 335 proposes “fixes” to problems that do not exist; there’s no evidence that injured workers are suffering because they are denied care, nor are they harmed because adjusters are doing thorough investigations – as required by state law.

SB 335 will lead to more litigation, which will increase employers’ and taxpayers’ costs while benefiting no one.

What does this mean for you?

Please encourage California legislators to leave the MAJIC to the magicians. 


Comp’s culture of catastrophizing

At the height of the COVID crisis last year, some research organizations, brokers/consultants and “thought leaders” were gravely forecasting how awful this was going to be for workers’ comp.

Sure, we didn’t know what was going to happen, although careful and thorough research would have indicated things weren’t headed towards the “awful”.

Instead, we heard:

  • investment returns were going to suffer;
  • profits were in deep peril; and
  • workers’ comp was going to be the “go to” insurer for COVID due to presumption

These could have happened, but the data clearly indicated these outcomes were pretty unlikely.

Then there’s “social inflation”, a term describing some rather nebulous and ill-defined “drivers” which are allegedly increasing the cost of insurance claims. [There are a host of methodological problems with the research cited in the link and with this study as well]

Social inflation is being blamed for all manner of problems – jury awards (many drastically reduced on appeal), ‘increased litigation”, “broader definitions of liability, more plaintiff-friendly legal decisions.”

This from Fitch’s Robert Mazzouli, [emphasis added]

A high-profile litigation example in the U.S. is the so-called opioid crisis – drug companies have been accused of playing a harmful role in the extensive overuse of opioid medications, with the overuse blamed on both medical prescriptions and illegal sources.

Read that again.

“So-called opioid crisis?” What planet is this guy living on?

Not this one. There is overwhelming evidence against Purdue and other members of the opioid industry.

Not sure where these experts get their information, as research indicates the various “problems” attributed to social inflation are overstated or exaggerated.

What’s abundantly clear about these two issues is workers’ comp insurance people have no idea what’s really driving their business. Instead of doing the hard work to figure out how to address over-spending on claims, too many blame outside forces.

COVID and “social inflation”‘s impact on work comp is insignificant compared to opioids and facility costs.

Opioids drove up workers’ comp rates and claims and claim duration. Yet few work comp insurers have figured out how to help long-term patients reduce or eliminate opioids.

Facility costs are the fastest-growing part of medical spend, driven by:

  • the failure of some states to expand Medicaid;
  • (mostly for-profit) health systems’s amazing ability to over-charge workers’ comp payers and get away with it;
  • changes in reimbursement by Medicare;
  • reliance on PPOs to address facility costs; and
  • grossly inadequate medical bill review

What does this mean for you?

Instead of blaming external issues, work comp execs should focus on understanding medical drivers and how healthcare impacts workers comp.


Recklessness and Responsibility

The Greatest Country on Earth will not conquer COVID.

Misinformation by “thought leaders” and their followers is the primary reason.

The CDC ‘s experts no longer believe herd immunity is possible. Instead COVID will become woven into the fabric of everyday life, with new variants popping up from time to time, killing the most vulnerable and sickening thousands of us. Lest one think that’s not a big deal, recall the most common version of COVID now circulating in the US came from Britain – and this version is 60% more transmissible than the “original” version. More concerning still, future variants may well be more lethal.

While there are many factors contributing to the herd immunity problem, the biggest driver is vaccine uptake (which contributes to the variant problem).

from US Dept of Health & Human Services via NYTimes

Of course, this doesn’t help.

Sturgis ND during Bike Week

Which leads to the key question – why?

Why don’t people get vaccinated? Why don’t they mask up and physically distance?

Mostly because they listen to “thought leaders”, influencers and friends who spread misinformation.

The key takeaway.

Those of us who have followings, however modest, have a moral and ethical responsibility to use that influence for good. Re-posting and re-tweeting inflammatory, wrong, and just plain stupid “information” is reckless and irresponsible.

It can also be deadly.

Do your research before publishing anything – and don’t just check “sources” that always support your thinking.

When you make a mistake, own it. Correct it publicly and apologize.

I’ve made my share of mistakes, so I’m certainly not immune; a few examples are here, here, here, here, and here.


Work comp pharmacy and claim outcomes

myMatrixx’ Drug Trends Report is out  – here are my key takeaways.

Behavioral Health

Kudos to the authors for the comprehensively addressing behavioral health (BH) issues. Among the takeaways are:

  • Not addressing the mental health of injured workers can delay return-to-work, increase the risk of opioid addiction or both.
  • Although mental health conditions rarely can be proven as work-related on their own, they often arise as a result of work-related injuries. (italics added)
  • The older the claim, the more likely psychotropic medications were prescribed.

What this means

Claim closure and settlement are driven by the recovery of the patient. You are not going to get those claims closed or settled unless and until BH issues are resolved.

Opioids and benzos drive claim outcomes

The Report referenced a 2014 JOEM study noting the more dangerous drugs a patient is prescribed, the higher the claim cost – and the longer the claim is open.

While there’s certainly a severity issue at play here, the central takeaway is minimizing the inappropriate use of short- and long-acting opioids and benzodiazepines is key to patient recovery.

What this means

If your PBM and clinical staff aren’t on top of opioids and benzos – as in instantly aware of scripts and able to deploy clinical support expertise – those patients are far less likely to recover – and you’re going to pay dearly.  

Both of these issues – behavioral health and dangerous drugs – are critically important to patient recovery and claim closure.

As I noted yesterday, far too often WC payers choose vendors/partners based on the wrong criteria.

Nowhere is this more common than for pharmacy management. Price is important, and service is key – but both are secondary to the impact of pharmacy on claim outcomes.

What this means for you.

More than any other service, PBMs drive claim outcomes – for better or worse.  

note – myMatrixx is an HSA consulting client. I’m honored to work with them.




Friday catch-up

Good to be back in the habit of regular posting…lots going on deserving of your attention.


From myMatrixx, a very useful post from Phil Walls, everyone’s favorite pharmacist. Phil highlights three drugs in the pipeline that may well find a place in work comp.

Nalmefene was developed as the naloxone for fentanyl. While naloxone has saved countless people on the verge of dying from opioid overdose, a single dose isn’t strong enough to save someone on fentanyl. Read Phil’s post for details.

Two other meds – Molnupiravir and Ofev may help patients battling COVID. The former is an anti-viral, easily administered and offering the potential to reduce the length of infection.  Ofev is more narrowly focused on combating a very serious lung disorder associated with COVID.


As if Florida, Mississippi, and other states needed yet another reason to expand Medicaid...individuals with Opioid Use Disorder referred by criminal justice agencies were more likely to receive  medications for OUD in states that expanded Medicaid compared with those in states that did not.

Considering overdose deaths dramatically increased after the pandemic started, legislators in non-expansion states need to get off their collective butts and do the right thing. Stop with the bullshit arguments and do something that actually helps people.

And the Biden Administration should do the same – fast track authorization for medical providers to prescribe buprenorphine. We’ve been waiting over three months, Mr President…

Hospital profits

Hospital and facility owner HCA reported profits more than doubled in the first quarter of 2021 over 2020. The really scary part is

“Same facility revenue per equivalent admission increased 16.6 percent in the first quarter of 2021, compared to the first quarter of 2020, due to increases in acuity of patients treated and favorable payer mix.”

In English – employers and taxpayers’ facility costs shot up. Here’s looking at you, workers’ comp…

Workers comp

Despite the rampant profiteering off workers’ comp by HCA and others, workers’ comp remains a very profitable line of business. That’s mostly because rates are still too high, frequency continues to decline, and medical trend remains flat.

National Underwriter reported WC was the fourth most profitable P&C line in 2019, at with a “relative net worth” of 12.2%. I’m not entirely sure what “relative net worth” is…perhaps the best way to compare margins across not-for-profit, mutual, and stock companies?


Finally – be Skeptical!

Did 4% of Americans gargle with bleach last year?

You may have read the news reports on a “study” that found a bunch of us were gargling with bleach. Bunch of morons…typical (insert demographic group here),

But, the answer is likely no.  In fact, the “study” had fatal flaws, flaws which came to the surface when a well-designed study followed up.

Takeaway – beware of clickbait, ESPECIALLY when it supports your own opinions and biases. Here’s looking…in the mirror.

Lastly, a request.

Smile at someone you don’t know today. Things are getting better by the day, and you can spread the joy.


A really bad idea

A long list of real and very difficult problems face California’s legislators; no where on that list is worker’s compensation.

  • Work comp premiums are at an all time low,
  • injured workers have no trouble accessing care,
  • are generally satisfied,
  • benefits are good and indemnity payments up by half a billion dollars since reform,
  • fewer workers are getting hurt or sick at work which means claims counts are dropping,
  • medical costs have actually declined,
  • opioid prescription volume has plummeted, and

  • even the IMR mess seems to be improving.

Oh, and rates are dropping again.

Not satisfied with leaving a good thing alone, two legislators are pushing to end all this good news. They’re proposing to return California’s comp system to the awful old days of rampant medical inflation, profiteering by a few shameless medical providers, rapidly rising premiums and much higher costs for taxpayers and employers.

What’s not to love?

AB 1465 is not a solution in search of a problem, rather it creates a problem – one identical to the problem we had before workers’ comp was reformed.

In essence, AB 1465 would allow any doc – regardless of their knowledge of workers’ comp  – to care for any workers’ comp patient who seeks them out. Employers and taxpayers would NOT be allowed to negotiate reimbursement, nor would they be allowed to evaluate physicians’ actual performance. (correction thanks to a diligent reader – thanks Sara!)

The bill’s sponsors claim there’s an “access to care” issue that prevents patients from receiving care.

No, there is not. There is no credible evidence that access is an issue – no studies, research, or data whatsoever. If you have any, please share.

Quite the contrary, there is NO significant difference in access to care for patients treated within or outside a Medical Provider Network.

This from CWCI’s report…

Similarly, there was no significant difference in distance from the patient to provider between MPN and non-MPN patients.

Solving this non-existent problem of access to care will cost California’s employers and taxpayers an additional third of a billion dollars.

But wait, there’s more.

Enabling any Tom Dick or Mary MD to treat workers’ comp patients will almost certainly lead to delays in return to work, higher medical costs, and lower recovery rates. Volumes of research show the more experience a doc has with workers’ comp, the better the outcomes. The contrary is true as well – the less the experience, the worse the outcomes.

I love California. The quality of life is generally excellent, services are generous and pretty good, it is beautiful and diverse and productive, the education system is among the best and higher ed is terrific.

It also has more than its share of problems, some created by stupid policy (restrictions on taxation, fire prevention initiatives, a poorly maintained electrical grid), others by all of us (climate-change-exacerbated wildfires and drought), a really problematic water situation, a major homeless population challenge, wildly expensive housing, awful traffic, and a complete inability to do important things like connecting cities by fast and efficient rail.

With fire season approaching and the grid in dire need of a major upgrade legislators should spend their very limited time fixing those real issues – not creating more problems. I have no idea why these two legislators think a non-existent “access to care” issue  merits increasing employers’ and taxpayers’ costs by a third of a billion dollars.

And I don’t think they do either.

What does this mean for you?

If you do business or are a workers’ comp patient in California, you’ve got to kill this bill.


Why are you using that metric?

I’ve had several conversations with claims and managed care folks over the last few months about measuring performance, outcome metrics vs process metrics, and the challenges of data collection, aggregation and analysis.

Two takeaways.

Too often the discussion has been too focused on process, too down-in-the-weeds, too concerned about how and what to measure. While process and detail are important, they are secondary to the “why” question.

The most important question is “Why?”

Why are you doing this? Why are you using that metric? Why do you think that is the right metric?

Sometimes I’m a (very) slow learner, but I’ve finally figured out that it is far better to ask those questions than to tell the person what they should be doing. Telling someone something eliminates the chance for them to think through what they have done, why they’ve done that, and if it that was the best thing they could have done.

It forces them to take a step back and question themselves, their assumptions, their pre-conceived notions.

It’s easier – and more ego-gratifying – to tell someone what they should do. I’ve found that this can shift the discussion into a far less productive direction, one where the client may well disagree, to defend what they are currently doing. After all,  to hear someone say what you have been doing for X years is “wrong” will make anyone bristle a bit.

Second, metrics are almost never directly aligned with the organization’s overall goals.

For example, the goal of medical management is to improve the combined ratio.  Has anyone in your organization verbalized that…ever?

If they have, then you:

  • wouldn’t give a rat’s rear end about “savings” or “discounts”;
  • would focus on overall spend;
  • would evaluate providers not on how much of a “discount” they give but on what their services cost and how that compares to other providers;
  • would evaluate networks not on how big their directory is and how deep their discounts are, but on the quality of their providers and the cost of their services.

And that’s just the beginning.

Once you establish the “why” the “what” is pretty straightforward – with one big caveat – every time you settle on what you will measure, go back and see if it aligns with your “why”.

Don’t be surprised if it takes a bit to re-orient thinking. Be patient – with yourself and others. It took me 30+ years, so hopefully you’re a much faster learner.

What does this mean for you?

Asking the right questions requires one to invest time and thought. If you don’t have time to do it right on the front end, you’ll never have time to fix it.


COVID’s impact on workers’ comp…focus on the facts

Could COVID have a “very alarming potential outcome that could have a huge impact on workers’ comp” due to claims for neurological and psychiatric issues? That’s a concern raised by Mark Walls in tweet that was noted in a recent article in

Before we opine on Mark’s fears, let’s look at the science. I know, you just want the takeaways, but you have to eat your veggies before you get dessert.

A few days back the Lancet published a study assessing the neurological and psychiatric “outcomes” of about 236 thousand US COVID survivors. Here are the key findings.

  • there was a statistical correlation between COVID-19 and higher frequency of neurological and psychiatric diagnoses (the Brits used “outcomes”, but for we Americans, in this instance the analogous word is diagnoses)
  • these diagnoses were more common in patients who had required hospitalisation, and more common still in those who had required ICU admission or had developed encephalopathy

The researchers compared the increased frequency of those diagnoses in COVID survivors to increases in a similar set patients with non-COVID respiratory diseases including flu.

OK, here are some key considerations.

First, these patients are in the US; many of them may not have had regular healthcare prior to contracting COVID, and the neuro/psych conditions may have been present but not diagnosed pre-COVID. While the researchers attempted to control for this by comparing the group to a similar demographic of patients with respiratory infections, it is indeed possible – if not likely – the post-COVID patients had much more thorough medical care during and after COVID than the control group.

Interpretation – The more care, the higher the likelihood of a diagnosis.

Takeaway – The more you look for something the more likely it is you’ll find it.

Second, the older the patient group, the higher the correlation – and the less likely the patient was employed (note I did NOT say “risk” as the study did NOT show that a COVID diagnosis caused the neuro/psych diagnosis.) The average patient that was hospitalized or in the ICU was about 15 years older than non-hospitalized patients (58 vs 43).

Interpretation – COVID hits older people much harder than younger folks; the older the person, the less likely they are working.

Takeaway – the higher the correlation, the less likely the patient is employed, so the lower the potential for a workers’ comp claim.

Third, patients who already had neuro/psych diagnoses may have had that condition exacerbated by COVID. The research showed that a patient that had a stroke before COVID, was more likely to have another one than a COVID patient that had not had a stroke before COVID.

This is especially true for the most severe neuro/psych diagnoses…see “any” vs “first”

Takeaway – very tough to blame an ostensibly work-caused disease for a second stroke or encephalitis event.

Fourth – the most common post-COVID diagnoses were anxiety disorders (occurring in 17% of patients), mood disorders (14%), substance misuse disorders (7%), and insomnia (5%).

But here, the differences between the COVID and control populations were minimal (HR is Hazard Risk – the risk that a member of that population will have that event occur)

Takeaway – very tough to blame an ostensibly work-caused disease for a mood/anxiety/psychotic disorder, especially when the control group’s incidence rate is so close to COVID survivors’.

Fifth – Mark makes the point that outcomes for workers’ comp patients are worse than under group health for similar conditions – he goes on to say costs are higher too – and this may well be the case with COVID. Couple thoughts…

The definition of “outcome” in comp vs group health is pretty different and highly subjective; in comp we care about functionality – group health doesn’t. If you are worried about functionality, you will pay more for more care to improve the patient’s functionality. Ergo…more dollars spent.

There are any number of other reasons costs are higher in work comp – but I’d argue – vehemently – the primary reason is this – compared to other payers, WC does a generally crappy job managing medical. I work in both comp and group/Medicaid/Medicare, and the sophistication of medical management in group, managed Medicaid and Medicare is far superior to comp.

As in a graduate student vs a junior high student.

Takeaway – Lower quality healthcare = poorer outcomes at higher cost.

Finally, Mark says “we’ve never had a global pandemic where the government has mandated it be covered under workers’ compensation.”

Well…we still don’t.

I’m not sure which – if any – government(s) have broadly  “mandated COVID be covered under workers’ compensation”. Sure some states have passed presumption laws or had executive orders re presumption – but those are few, far between, rarely cover all workers – and typically come with a rebuttable presumption.

  • Only California and Wyoming cover all workers with a rebuttable presumption
  • Several states (NJ VT IL) cover “essential workers” – with varying definitions thereof
  • MN UT WI only cover first responders and healthcare workers

An excellent and up-to-date resource on state laws is provided by the good people at NCCI…

I’m struggling to see how the science and current state mandates will cause anything like a “huge” impact on workers comp.

  • The people with the most “risk” are older and less likely to have contracted the disease at work.
  • The study did not show a causal link but a statistical correlation – and correlation is not causation.
  • There have been relatively few COVID claims accepted by work comp.
  • Only two states have passed broad presumption laws.

To his credit, later in the article Mark notes “when you see a study like this, it makes you pause.”

I agree. Pause, read the study, then step back and think it through. And avoid hyperbole. 

What does this mean for you?

There’s a lot of fear out there about COVID – much of it more FOTU [Fear of the Unknown] than fact-based. Focus on the facts, and don’t react until and unless you know the details.

Side note – I opined on a related story 14 months ago…




Chronic pain, opioids, and other drugs – the latest research

Dr Steve Feinberg pointed me to two studies conducted by the Agency for Healthcare Research and Quality on chronic pain, both systematic reviews [reviews of published studies of a specific topic]. One focused on opioid treatments for chronic pain, the other on non-opioid pharmacologic treatment.

The non-opioid research reviewed 190 studies, of which 185 were RCTs. Researchers concluded:

improvement in pain and function was small with specific anticonvulsants, moderate with specific antidepressants in diabetic peripheral neuropathy/post-herpetic neuralgia and fibromyalgia, and small with nonsteroidal anti-inflammatory drugs (NSAIDs) in osteoarthritis and inflammatory arthritis.

The takeaways include there are some benefits from some drugs, often dependent on the patient’s medical condition.

The opioid treatment for chronic pain study was based on a review of 162 studies; “115 randomized controlled trials (RCTs) [the gold standard of clinical research], 40 observational studies, and 7 studies of predictive accuracy.”

Note that for research purposes, chronic pain is described as pain that lasts more than 3 to 6 months.

There was more credible research available to assess short-term outcomes vs longer-term outcomes; there was no RCT comparing opioids to placebo for medium or longer-term periods.

Takeaways included (and these are direct quotes):

  • There were no differences between opioids and nonopioid medications in pain, function, or other short-term outcomes
  • Opioids were associated with small benefits versus placebo in short-term pain, function, and sleep quality.
  • There was a small dose-dependent effect on pain, and effects were attenuated [reduced] at longer (3 to 6 month) versus shorter (1 to 3 month) followup.

Most concerning, “there is evidence of increased risk of serious harms that appear to be dose dependent” [the higher the dose, the greater the risk].

This crossed my desk the day before a good friend’s brother died of an apparent opioid overdose, adding a painful exclamation mark to the study’s conclusion.

Extensive research in Australia focused on long-term opioid use in patients with chronic non-cancer pain found that:

Despite limited evidence of efficacy, there has been a considerable increase in the long-term prescribing of opioids for chronic non-cancer pain in several countries

Here’s the thing; the research we do have clearly demonstrates the risk of opioids is high, and the benefits are limited. However, there isn’t near enough research on the efficacy of long-term usage of opioids for chronic pain.

Anecdotal evidence indicates some patients can do well on opioids for extended periods.

That said, the evidence we do have suggests that overall, efficacy may be limited at best, and the risks are high. Fortunately more research on opioid efficacy and risks and chronic pain has already been funded.

What we cannot do is force patients off opioids; this is dangerous and unethical.

What does this mean for you?

Opioids have their place – but be very careful, especially when use is long-term. Life is precious. 



Facilities, fee schedules, and what should be your takeaway

Perhaps the most practical presentation at this year’s WCRI conference focused on outpatient facility costs. While the content itself was excellent, what was more valuable were the implications for medical spend management.

Rebecca Yang PhD provided a wealth of information about outpatient fee schedules, Medicare reimbursement, and the impact of Medicare’s changes on workers’ comp fee schedules. Note that as the slides indicate, findings are preliminary so subject to change.

First, the findings.

Dr Yang noted that outpatient hospital and Ambulatory Surgical Center costs  [outpatient costs] represent about 15% of total medical spend across the 18 study states, with Louisiana the outlier at 28% of spend.

There are lots of different ways to manage spend via fee schedules; one can base reimbursement on a fixed amount, % of charges, cost to charge, Medicare or some hybrid mechanism.

All have strengths and weaknesses, issues and challenges, but – with one very big exception – in general it is better to have a fee schedule than not – except when the fee schedule is easily gamed (we’re looking at you, Florida).

That exception is cost-to-charge, a term describing the ratio between a hospital’s expenses and what they charge. As we’ve discussed here ad nauseam, all hospitals in C-t-C states have to do to make bank is jack up their charges. 

I won’t dive deep into details about how Medicare’s changes to reimbursement affect workers’ comp except to note that when the dog wags the tail, the flea on the end (that’s workers’ comp) gets whipped about.

Okay, maybe a little detail…

The Peach State adopted Medicare as the basis for the WC FS back in 2013.  Essentially, the change followed Medicare FS changes, except excluded device reimbursement and (if I heard this right) some associated charges.

Medicare made changes to its reimbursement in 2016 and 2017 which drove  reimbursement declines for some knee surgeries; others were unaffected.

The point of this is to note that basing a fee schedule on a third party’s reimbursement demands payers really deeply fully understand the underlying third party’s reimbursement policies, practices, requirements and nuances.

Most workers’ comp entities don’t. The result is they are unable to ensure medical bills and accompanying documents support reimbursement – or don’t. Far too often, bill review entities just assume everything is in order (if the surgery was pre-approved) and authorize payment for all billed services. Reality is it’s pretty common that some of those billed services should have been bundled into the overall surgical fee.

What does this mean for you?

This isn’t unique to Georgia, or knee surgeries. If your BR operation doesn’t know this stuff at a granular level, you’re probably overypaying. 

(WCRI published an excellent summary of outpatient reimbursement and drivers last year).

Oh, and don’t forget my annual Aril Fool’s post is coming up Thursday. Don’t be fooled!