Of late there’s been “confusion” in several quarters about the impact of provider networks/PPOs/specialty networks on access to care and outcomes.
These uninformed or willfully ignorant folks claim all manner of bad stuff is due to workers’ comp provider networks – without an iota of evidence to support those assertions.
Let’s pick on the Golden State…
Let’s be clear…actual research shows:
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.
The latest proximity to care findings also track with results of CWCI’s April 2021 research which found that 99 percent of claims in which treatment was rendered by an MPN provider, and 98 percent of non-MPN claims met the state’s access standards.
What does this mean for you?
Do NOT give any credence to statements similar to: “of course, paying providers less than fee schedule affects access to care” UNLESS they are backed up by real research and not built on a pile of unfounded and unsupported assumptions.
Basics here folks…
Facility costs soak up 2 out of every 5 dollars of work comp medical spend.
“Physician” costs take up another 2 bucks…however that is misleading.
In NCCI-speak, “physician” is a catch-all for most practitioners…MDs, DOs, PTs, chiropractors, PAs…and, the “physician” fee schedule in most states doesn’t apply to things like physical medicine (PM).
Historically PM accounts for right around one of every 6 work comp medical dollars (yes that is a very solid number based on a ton of work I’ve done), although like everything in work comp it varies somewhat by state.
Then there’s drugs, dx imaging, DME, etc.
Drugs account for less than 10% of spend, a figure that has been declining for years thanks to much better clinical management of pharmacy – mostly by PBMs – more generic usage, a massive decrease in overuse of opioids, fewer new brand drugs used for MSK injuries, and declining fee schedules.
Risk and Insurance’s Annemarie Mannion penned an excellent explanation of how Medicare reimbursement affects work comp fee schedules. Read her piece and save it in your reference files…you will need it in the future.
Finally, network penetration does have some effect on prices paid…although that impact has declined over the last few years as providers have figured out that when it comes to negotiating with health systems, workers’ comp is pretty much clueless. Here’s a synopsis of network impact from a post a couple years back.
is hospitals hoovering dollars out of employers, work comp insurers, and taxpayers’ wallets.
(sorry all…due to a bug in WordPress some of you may be getting this again)
WCRI’s latest research report on hospital costs is a must-read for anyone involved in work comp claims, medical management and actuarial issues. Kudos to Drs Olesya Fomenko and Rebecca Yang for their excellent work.
The study focuses mostly on how payments for outpatient surgery vary across the different types of fee schedules (no fee schedule vs fixed amount vs cost to charge ratio vs percent of charges…)…and how those payments have changed over time.
But there are several other issues that I’d argue are more impactful.
- It’s not so much the type of fee schedule as other factors…
- there’s a LOT of variation between states with the same type of FS
- failing to expand Medicaid is a big problem for hospitals
- Basing fee schedules on percent of charges is a really bad idea…
- states with %-of-charges FS had – by FAR – the highest costs, averaging more than 3 times what Medicare pays. (Medicare reimbursement is slightly above break-even for hospitals)
- `hospitals easily game the “fee schedule” by jacking up list prices
- 2 of the three states with the largest increases in hospital payments had FS based on %-of-charges
- States with NO fee schedules were not quite as bad – averaging “only” 225% of Medicare
- Clearly network arrangements have failed miserably.
What does this mean for you?
Actuaries…check the inflation trend to predict where costs will be in the future
Medical management folks…dig into your data to identify the worst offenders, and direct care AWAY from them. Hint – HCA facilities are usually among the worse offenders.
Bill reviewers – STOP relying on network discounts and start getting LOT smarter about dealing with facilities.
Workers’ comp news…
After a long and litigious delay, myMatrixx has been awarded the contract to manage pharmacy benefits for the Coal and Energy programs run by the Federal Department of Labor’s Office of Workers’ Compensation Programs (OWCP). Details of the case – which involved a protest by rival PBM Optum – are here.
That’s the good news (the Feds should have had a PBM managing these programs years ago).
Now, the bad news.
The press continues to dive into the audit of the other OWCP program – the one that provides workers’ comp to all Federal employees (FECA). [audit report is free for download here]
The latest is from Leslie Small of AIS Health. [available at no cost via free trial subscription].
From Ms. Small’s piece:
- “OWCP has been doing a poor job of both controlling the FECA programs spending on prescription drugs and implementing its own policies to ensure that prescriptions are being appropriately dispensed, said the OIG report.”
- OWCP published a bulletin in 2011 that forbid reimbursement for fast-acting fentanyl prescriptions unless claimants had been diagnosed with a certain type of cancer…during the audit period…98.7% of the fast-acting fentanyl scripts that OWCP [and taxpayers] paid for “went to claimants without evidence of one of hte eligible cancer diagnoses”
- Even more troubling – if that’s possible – OWCP did not institute controls to mitigate opioid usage until the end of 2016, years after many commercial insurers, third-rate administrators, and large employees had done so…”
Here’s hoping this much-needed attention results in even-more-needed improvements.(my opinion only)
Drug costs in California are getting well deserved attention again; CWCI’s research identified 9 drugs – 3 each opioids, dermatologicals and antidepressants – that account for a significant percentage of total drug spend. CWCI members can get the full report at no cost; it’s $18 for others.
Briefly, branded anti-depressants, tapentadol/Nucynta, and the three anti-depressants make up a small percentage of scripts but a big percentage of dollars.
Of course, in the vast majority of cases the dermos are just BS drugs that should never be allowed…
What does this mean for you?
Don’t sleep on pharmacy...sure costs are down, but it still has a major influence on recovery, RTW, and claim closure.
One of my favorite people in workers’ comp is now heading up WCRI…I connected with Ramona Tanabe who was named President and CEO. making her the third leader of this august institution.
here’s our conversation…