Late last week I sat down with WCRI President/CEO John Ruser to get his views on his first few months at the helm, find out what’s on the agenda at the WCRI conference next week (if you haven’t registered, get your fingers over here), and learn about future areas of focus.

MCM – What has been the most eye-opening for you as you’ve moved from the Bureau of Labor Statistics to WCRI?

Ruser – First off, it is an honor to take the helm of such a well-regarded organization with such a diverse membership and to be working with such an intelligent and talented group of colleagues who are committed to publishing high-quality, credible and independent research. Along those lines, what has been most eye-opening has been the tremendous support for the research from all stakeholders in the workers’ compensation community. I’ve always knew WCRI was well-regarded, but when you are in the position I am in and interacting with people all across the country, you really understand how truly special WCRI is and how important the mission is to provide policymakers and other stakeholders with the data they need to make more informed decisions.

MCM – What has been the most fun?

Ruser – Working for BLS, you put out data and that is it. However, WCRI has so much interaction with the workers’ compensation community through their rigorous quality assurance process (i.e., reviewers, state advisory committees, etc.). The other thing that makes WCRI different is our mission, which is to be a catalyst for significant improvements in workers’ compensation systems. So that is what is fun, to see the research being used by the community it is seeking to help.

MCM – What will attendees learn at WCRI’s conference next week?

Ruser – A big area of interest this year is opt-out. We have two sessions on opt-out that will provide a deep dive from multiple viewpoints. In addition, researchers from the Dartmouth Atlas project and NCCI will join our staff to discuss interstate variation in medical treatments. The conference will also include the latest research on prescribing of opioids across the country, which is an issue that garners great attention in and outside the workers’ compensation community. We are hopeful that presentations on the issue lead to changes.

MCM – Do you see changes in the research focus of WCRI going forward?

Ruser – Over the next two years, I expect we will be doing a lot of work on treatment guidelines; their impact on outcomes, procedures, costs, and injured worker outcomes. We are also working on an update on injured worker outcomes with surveys of injured workers. Areas covered by the surveys include access to and satisfaction with medical care, return to work timing, and earnings loss. There has also been a lot of interest in our work on case-shifting, so we will be doing a study to see if there is evidence of case shifting due to high deductible health plans.

MCM – Can you give a bit more detail on treatment guidelines? What’s driving that focus?

Ruser – In discussions with our members and other stakeholders, treatment guidelines have risen to the top of the priority list. There is interest in learning what leads providers to use treatment guidelines and to what extent treatment guidelines affect outcomes. Utilization review (UR) and compliance issues affect the former. We want to better understand what kind of programs are out there and how are they being used, do treating physicians comply with guidelines?, are denied services paid?, what are providers’ views of these programs.

We have begun semi-structured interviews with physicians in Louisiana re guidelines, and have seen a wide range of responses. We are learning a lot about providers’ views and, at the same time, gaining experience and expertise in collecting, analyzing, and using information from free-form surveys.

I expect we will use what we’re learning about text mining in another area – triggers of claimant attorney involvement. This gives us an opportunity to explore using broad questions to collect unstructured data, and then code that data to provide information. There is tremendous opportunity to use less-structured information in our research.

Now that California’s courts have ruled the IMR process is Constitutional, we can hope things will settle down, docs will start learning what is acceptable and what isn’t, and needless friction will decrease.

Unfortunately that isn’t likely.  If history is any indicator, a very few docs will continue to flood the system with thousands of requests for IMR, most of them for drugs and procedures that fall far outside the state’s evidence-based clinical guidelines.

Let’s acknowledge that the system – like any – isn’t perfect.  Let’s also acknowledge that all the data, research, and credible study to date indicates it works quite well.  What’s lost in the data-driven debate is the real problem – we aren’t looking at the right metric.

As CWCI has documented, well over 90% of all work comp medical procedures, tests, drugs, and treatment are approved.  And, when appeals do get to the last stage; the Independent Medical Review:

Data on the IMR outcomes show that 91 percent of all IMR decisions upheld or agreed with the physician-level utilization review opinion, while conversely, 9 percent of medical service requests submitted for IMR after being modified or denied by a UR physician were approved by the independent medical reviewer.

I’d suggest the CA UR and IMR process is approving TOO MUCH care.

Does anyone think that 94%+ of all medical procedures requested or delivered to California’s work comp patients are medically necessary, appropriate, and the best possible care?

Didn’t think so.

There’s no question too much care can be quite harmful.  The rampant overuse of opioids in workers’ comp is but one example of far too much care causing grievous harm.  Add in far too many spinal surgeries with lots of implants, and one can see that these “approved” services are far from optimal care.

What does this mean for you?

Why aren’t we focused on making the UR process tighter with more stringent controls and requirements before potentially dangerous and debilitating treatment is authorized?

Heading home from California, where I had the honor of spending most of a day with the good folks at the California Workers’ Compensation Institute.  Really fun (yes, fun!) to discuss research topics, methodologies, limitations, and uses with the real experts. CWCI has a robust research agenda heading into the winter, and we’ll see much of it published before their annual meeting.

Which is a “don’t miss”.

If you haven’t seen their latest work on drug testing in work comp, it is well worth a read.  This is one of those complicated topics where a brief scan of the report isn’t enough to do it justice.

There’s been a lot of great research from NCCI and WCRI published recently as well.  I’ll be able to work thru the backlog while enjoying a cross-country flight, and will report back on Monday.

In the interim, there’s been a bit of buzz about a big acquisition of late.  I’d suggest that folks take a deep breath and relax.  These things take a lot of time, there are lots of regulatory hurdles to navigate, and things are especially sensitive when a publicly-traded company is involved.  If you are thinking something will happen before NWCDC in Vegas, you should re-think.

Finally, the just-announced Stevens decision affirmed the Constitutionality of California’s IMR process.  This is BIG NEWS, as it removes a lot of uncertainty about utilization review and related matters. Read Stephanie Goldberg’s piece for the details.

In my ongoing effort to serve the public good, here are current facts and figures related to how many dollars are spent on medical care in worker’s comp. 

Total medical dollars

In 2013 workers comp medical spend totaled $31.5 billion.  Source – NASI’s Workers’ Compensation 2013 Report.  NASI is the definitive source for this data; their primary sources are NCCI for the 38 states where NCCI is the rating agency and state rating agencies/bureaus for the other 13.

Worker’s comp medical trend rate

NCCI’s Annual State of the Line presentation at the firm’s Annual Issues Symposium provides the earliest – and most complete – insight into medical inflation.  For 2014, initial indication was medical severity for lost time claims increased 4 percent.

A couple of caveats – this is for lost time claims only; while LT claims account for the vast majority of medical spend, medical only claims account for perhaps 15% of spend.  In addition, NCCI’s data does not include self-insureds; about a quarter of comp benefits are self-insured.

Pharmacy spend

Work comp pharmacy spend accounts for somewhere around $5.5 – $6 billion.

Sources

• Internal HSA data from research projects (my consulting work)
• NCCI – by their estimate drugs accounted for 18% of all medical expenses in 2011; note that this is based on total incurred cost, or for the layperson, their estimate of what the total including already-paid and future drug costs. Therefore this isn’t actual annual “spend”. And, the data comes from 2011 reports.  There’s a lot more to this, but suffice it to say the $ range above is solid.
• note – some claimants are submitting their work comp scripts to their group health plans.  While this won’t affect “spend”, it does impact the addressable market.

There are a lot of other sub-categories out there – and just as much confusion about what services, codes, provider types, or locations of service belong in what buckets.

If you are attempting to categorize spend, make very sure you understand your sources’ definitions.  E.g., script count; how do you define a “script”?

• Is it the prescriber’s prescription written out for a patient?  If so, understand that most “scripts” include 2+ drugs.
• Is it each individual medication prescribed?  If so, understand that some “scripts” are for 3 days’ supply, others for 90.
• Is it for a certain number of days’ supply?

Different stakeholders use different definitions – and not just for pharma.  How is “surgery” captured, and what is included?  CPT codes? Facility fees?  Associated office visits? Bills submitted by providers with a surgical specialty?

I could go on, but hopefully you get the (cloudy) picture by now.  If not, your bad.

What does this mean for you?

Work comp data is dirty, inconsistently categorized, and there are no single sources for all categories/spend types.

If you want to really understand the space, get granular, precisely understand definitions, and do NOT make any assumptions that other non-primary sources have got it right.