Delivery systems and workers’ comp

There’s been quite a bit of focus on alternate health care delivery methods of late, with medical homes and Accountable Care Organizations prominently noted as ways care will be improved and costs reduced.  One source indicates there are 270 ACOs currently operating with an estimated 20 million members.

While the early evidence is somewhat mixed, in general the news is positive; a Pennsylvania ACO raised quality, and decreased infections and readmission rates, leading to a year over year decrease in medical costs.  Generally, ACOs involve facilities and providers agreeing to focus on specific quality measures and reward performance instead of paying on a fee for service basis.  In PA:

Half of hospitals and physicians’ potential earnings are based on their performance improvement in hospital-acquired infections, patient experience, readmissions, surgical care, and treatment for heart attacks, heart failure and pneumonia. The other half of the earnings are based on the providers’ ability to manage costs across inpatient care, outpatient care, ancillary care, home health services and prescription drugs.

There are problems inherent in the model; patient satisfaction is a tough metric to achieve when ER patients only want narcotics for their pain, while readmission rates are going to be higher when patients refuse to be responsible for post-discharge care. Our daughter works in an inner-city ER and this is all too common; patients KNOW these are key criteria and tell care givers they will downscore them if they don’t get their meds.

Nonetheless, it’s a far better financial model than fee for service as it doesn’t incent more care and higher intensity care.

Notably, it’s hard to find any evidence of ACOs in work comp.  I’d be most grateful if readers could point me to any reports or information related to alternative delivery systems in WC; while there are some bundled payment models, and a couple episode-of-care pilots I’m aware of, there’s just not much going on as far as I can see.

Just leave a comment here – and thanks!

Adjusters are happier than we thought…

Jack’s been getting ever deeper into the world of the adjuster of late – here’s his latest post.

Over the past couple weeks Joe and I developed and sent out an Adjuster Survey to get more insight into adjusters’ (and other front-line staff’s) work life. We are looking for first hand information as website reviews and other second-hand sources can be easily misinterpreted.

Surprisingly, the response rate to date is an astronomical 24.4%.  We are delighted with our results, but we’re looking for more.

Perhaps even more surprising adjusters’ views of their work life are very positive; contradicting what I had read online prior to developing the survey.

Just over 90% of our participants claimed that their daily workload was either “manageable” or “a bit too much, but still manageable.”  We were very pleased to see that these participants were not getting overworked and that they were at least tolerating their work environment.  About 66% of the survey participants said that their work environment was “great” or even “unbelievably fun and enjoyable,” while another 30% said that the work environment was “tolerable.”

A tiny percentage – 3% of participants – claimed that their work environment was “not fun at all.”

We are data hounds here at Health Strategy Associates, and need you to help develop an even better understanding of adjuster likes, dislikes, and attitudes.

Please take roughly 2 minutes out of your day (that’s all it takes!) and fill out our survey.  In appreciation of your participation, you will receive a $5 Starbucks eGift card via email if you fill out our survey by Friday.

We’ve been getting great feedback thus far and would like to continue this run.  Once again, here is the survey link if you missed it.  Enjoy the (generally pretty good) work week!

Friday catch-up – the work comp world

WorkCompCentral’s Joey Berlin wrote up the details of a presentation on chronic pain treatment featuring Gary Franklin MD, Medical Director of Washington state fund L&I, Kathryn Mueller MD, Medical Director of Colorado’s Work Comp department, Noah Aleshire of the National Center for Injury Prevention and Control, and John Hanna PharmD, Pharmacy Director of Ohio BWC.

This august panel laid out the problem and discussed the potential for solutions including cognitive behavioral therapy, exercise, tight dosing and opioid treatment guidelines, and tight formularies. Hanna’s BWC has made solid progress in reducing the number of long-term claimants on opioids, adding more support for the expansion of formularies – and the tight UR rules that make them effective – to other states.

Kudos to CDC for bringing these folks together.

Mail order pharmacy IWP has been sold.  

The auction had been going on for several months, with many private equity firms taking an initial look at the company; the new owners are a quad-umvirate (my new word) comprised of PE firms ACON and Triton Pacific along with two individuals, Patrick Keefe and Tracy Finn.

I’m not a fan of IWP; they rely on doctors and attorneys to get injured workers to use their pharmacy services, claiming that these worthies do it because the workers can’t get their drug otherwise. While that may be true for a (very) few claimants, it most certainly is not for the vast majority.  So, why do docs use IWP? That was the question asked by several of the potential investors I spoke with, and none were comfortable with the answers.

CEO Ken Martino is a long-time friend and colleague, much as I respect the guy I just don’t see the value and the distribution model is a question mark.

Sticking with the pharmacy story line, IAIABC is hosting a primer on Prescription Drug Monitoring Programs on August 26.  PDMPs are another piece of the solution to the opioid disaster, helping to prevent doctor shopping, duplicate therapy, fraud and diversion.  Sign up here.

Payers – insurers, TPAs, and self-insured employers – should pay particular attention as some states allow payers and their agents to access PDMP data, while others don’t.

Off to work – enjoy your mid-summer weekend!

 

 

 

Monday catch-up

Summer is in full swing, which means the A/C is running at full blast in Florida and Texas, while those of us in upstate NY are gloating…I know, you will be soon when we’re subzero and you’re at 70…

Things are supposed to slow down somewhat – they haven’t yet. Here’s what happened last week while I was working on a couple projects last week.

P&C results

The P&C industry is doing well – very well. For the second straight year it will show an underwriting profit, and the combined is still almost three points below 100. Rating agency Fitch thinks things will deteriorate somewhat as the cost of weather-related cats increases; that and lower investment performance (as the equity markets cool off) will lead to lower return on surplus as well.  Still and all, things are looking pretty good – for the P&C industry.  That said, P&C financials are not exactly good; historical return on equity is really low and the cyclical nature of the industry is legend.

Work comp

One of my favorite states, Montana, is suffering from dramatic increases in already-high workers comps cost, driven in large part by drugs; pharmaceutical costs account for 16 percent of total medical compared to 11 percent nationally. Their top drug, accounting for almost 15 percent of total spend – Oxycontin.  That is about twice what it is nationally.

One more time folks – Oxycontin has almost NO PLACE IN WORKERS’ COMP.

Hopefully the state’s new medical guidelines will help reduce this.  Kudos to State Medical Director for Carla Huitt MD for highlighting the issue.

There’s a news brief from NCCI re claim frequency - they report that it continued its decline last year, with indemnity claims dropping 2 percent.

The Coventry work comp auction is proceeding, albeit without many of the big private equity firms. I’ve heard they are concerned about:

  • the PPO network, specifically Aetna’s unwillingness to help re-contract providers. As this is the crown jewel, the lack of a fail-safe strategy to preserve the network greatly reduces the deal’s appeal.
  • the lack of tech and other support for BR 4.0, the bill review platform.  With the layoff of much of the application support staff and chronic under-funding for BR 4.0, the new owners need to either private label someone else’s app or get out of bill review altogether.  Not good.
  • the mediocre-at-best-performance of the other businesses (case management, UR, PBM, etc)
  • the need to recruit a “name” exec to lead the company (nothing against current management, they’ve been handed an impossible task by mother Aetna)

I’d expect Apax/One Call to be the winning bidder – if there is one.  If that happens, the mega-humongous OCCM/Apax will have even more market power.  Methinks payers are going to be most worried about that.

Joe Boures has been promoted to CEO at Healthcare Solutions, replacing David George who stays on as Board Chair.  Under George, predecessor company Cypress Care acquired Procura to become Healthcare Solutions, then added PBM ScripNet and PBM/DME/HHC provider Modern Medical, making HCS one of only two companies to offer a full range of work comp managed care services. Joe is a friend and good man whose steady, thoughtful style will serve the company and its customers well. [disclosure - I have a very small equity position in HCS]

Also just heard that Acrometis has landed a new customer – MacRisk.

Implementing PPACA

For the states that opted out of expanding Medicaid, the proverbial chickens are headed home to roost – and they’re dropping loads of red ink on hospitals in the process.  That’s the news from Fitch,

Fitch has downgraded 10 entities [hospitals and health systems]. Of those, five are in states that have not participated in expanded Medicaid coverage. Several of those downgrades were driven by operating performance declines related to funding and reimbursement pressures, which may have been lessened by Medicaid expansion. Conversely, of the nine upgrades since Jan. 1, eight were hospitals in states that have expanded Medicaid. [emphasis added]

From Jonathan Cohn comes the news that states that decided to expand Medicaid have seen insurance coverage increase almost three times more than states that have foregone expansion.  As folks in these states are healthier to start with, the health disparity between the states will – depressingly – increase.

I’m really confused by House Speaker John Boehner’s decision to sue President Obama over alleged abuse of executive power; after all the caterwauling about immigration, Guantanamo, the border, drone strikes, recess appointments, and the Bowe Bergdahl trade, the best he can come up with is the delay in the employer mandate...

It doesn’t make sense.  Politically, there’s increasing evidence that voters are feeling better and better about PPACA, torpedoing what had been THE key talking point for GOP candidates this fall.  GOP senators and congresspeople have all but abandoned “Obamacare” as a talking point.  Bringing more attention to an issue that may redound to their opponents’ benefit is puzzling at best.

As evidence, I give you the news that political ads slamming “Obamacare” may well have resulted in higher enrollment in “blue” states.

Back to work now!

 

 

The contentious and misunderstood world of drug testing

Any time you have to mention urine in a blog post you know it’s going to be a tough one.

There’s a kerfuffle in the world of urine drug testing, one of the more litigious and contentious industries I’ve ever encountered.  The parties involved, Ameritox and Millennium Labs, have been involved in litigation for some time now.  [full disclosure, Millennium has been a consulting client for a couple of years; I work closely with them, and have found them to be great people who do the right thing consistently.]

A while back, Ameritox lost a suit brought by Millennium over alleged deceptive advertising; more recently a jury ruled Millennium had improperly given cups to docs in four states, a practice the jury deemed an unfair trade practice. Ameritox trumpeted their “win”, however the jury’s finding was inconsistent with the opinion of several experts in the area, all other charges were dropped, and the case is on appeal.  And there was a serious legal question raised when one of the key witnesses allegedly provided information that perhaps they had no right to.

Be that as it may, the case was noted by friend and colleague David DePaolo, who opined: 

While medical guidelines recommend drug testing for compliance purposes and to help ensure that drugs aren’t being diverted to the black market, we know those are specific case recommendations particular to a certain set of medical facts, not to be applied universally.

But the way medical suppliers stimulate sales with physician gifting and revenue enhancement programs tests the ethical and moral qualities of the individuals on the front lines, and physicians should not be placed in those positions, and we should not be placed into positions of having to pay for it.

Sometimes drug testing is warranted. Most of the time it is not.

A couple comments.

First, research from various organizations including WCRI clearly indicates there’s far too much testing going on of a small population, and far too little of most.  About a quarter of folks who should be tested are, while some unscrupulous docs test every patient every time, making bank.  I respectfully disagree with David’s statement that “most of the time” drug testing isn’t warranted.

Second,

What is correct is to say many more patients taking opioids should be tested, and that testing should comply with accepted evidence-based clinical guidelines; Washington State, Colorado, ACOEM, and others are all excellent sources.

Opioid abuse, misuse, diversion, and related problems have long surpassed crisis status – we’re now in a national disaster with more people dying from this than motor vehicle accidents.  Drug testing is a critical part of the answer.  Yes, there are vehement disagreements among stakeholders, and yes, they can get very contentious, and yes, I have a dog in this fight.  That said, I – and many others – have been working long and hard to bring attention to the opioid disaster, and we need to keep the focus on addressing the problem and not get distracted by tangential issues.

On that all parties should agree.

What doe this mean for you?

There’s a real danger that we over-react, over-simplify this issue, and in so doing make blanket statements that do more harm than good.

 

 

 

Latest changes in the work comp PBM world

Helios is the new name for PMSI/Progressive.  The idea is to have a single name for the two different firms, both of which had positive brand images in the work comp world.  In talking to the marketing folk, their take was that while both brands had strong equity neither legacy name would work for the combined entity.

It seems a shame to end PMSI’s decades-long run, especially after Eileen Auen, Jay Krueger, and their excellent colleagues rescued the PBM from what seemed like a sure path to oblivion.  Instead of watching over the demise, they turned it into one of the top players in the business.  That said, Progressive had a well-earned and well-deserved reputation as a VERY customer-focused PBM; beginning under founder Dave Bianconi (one of the best people in the business…ever). If anything that focus has grown under the current Auen-Young-Sisson triumvirate; customers are (with rare exceptions) universally pleased.

So, Helios it is.

That will be a d/b/a; due to legal, regulatory, compliance matters I would not expect to see the Helios name show up on provider contracts and other legal stuff as that may well trigger all kinds of re-filing and jumping-through-legal-hoops.  But what we’ll very likely see is a big re-branding push, with lots of PR, a new logo, and a splash in Florida next month and Vegas in the fall.

Meanwhile, Aetna’s much-discussed sale of its workers’ comp sub (I know, I owe a bunch of folks on my mis-call on this one) hasn’t been finalized – as far as I know.  In conversations with several potential financial buyers, Coventry WorkComp’s declining revenues and earnings, coupled with the problems inherent in re-contracting a provider network without mother Aetna’s market clout and concern over PBM First Script’s strong ties to network Express Scripts makes for a “sub-optimal-go-forward-scenario.

Yup, that’s a direct quote. I think it means the potential investor doesn’t think they can pay what Aetna wants and get a decent return on that investment.

Undoubtedly, someone else will come up with a different scenario; whether it’s enough is to-be-seen.

Side note - long time First Script exec Brain Carpenter has joined Healthcare Solutions as their top clinical pharmacist.  HCS has been dramatically increasing the number and expertise of their pharmacist corps and the addition of Brian is a big plus. Brian will report toy EVP Jim Andrews; kudos to Jim (who I am fortunate to consider a good friend) for successfully building HCS’ clinical programs.

What does this mean for you?

Stability at one PBM…

 

Up? Down? Sideways? What’s up with health care costs?

There’s been a good deal of confusion over health care cost trends for the first half of this year.  Initial reports indicated they were up dramatically; more recent intel paints a very different story.

So what’s the deal?

First, let’s not confuse “costs” with “insurance premiums”.  Unfortunately, many mass media outlets don’t understand that insurance premiums are not costs…which certainly contributes to the confusion. Overall, premium increases for large employers have been trending generally downward for years, with 2014′s 4.4% rise just a touch over 2013′s record-low 4.1% increase. A big part of that is from increased deductibles and employee cost-sharing; today employees pay over a third of the cost of their insurance, a big change from way back in the day when many employers covered the entire cost (yep, I’m old).

Second, let’s not confuse “price” with “cost”, as this report does.

Recall cost is the price per service times the volume of services – so the price matters, as does the utilization of health care.

Fortunately, some sources – the PWC annual report being one of the better ones, don’t conflate or confuse.  Their latest estimate is health care costs will go up 6.5% this year, while premiums will only rise 4.5%.

That makes sense – more coverage means more utilization especially among folks who just got insurance.  Early indications are the recently uninsured are less healthy than the general population, a finding that should surprise no one.  Many may have long-term but relatively low-severity chronic conditions, while some undoubtedly could not get or afford coverage.  These newly-insureds will seek care for their long-term conditions, and that care will be pretty expensive. Think of this as a one-time big bump in cost due to pent-up demand; I would not be surprised to see spikes in cost for surgery, orthopedics, cardiology, pulmonology, rheumatology, and other areas with high chronicity over the next couple of years, followed by a reduced inflation rate.

What does this mean for you?

Don’t get too wrapped up in any forecasts or reports of recent cost trends; wait a year before putting much stock in inflation rates and you’ll find you have a lot less back=tracking to do. 

 

 

 

Is PPACA – the Affordable Care Act – working?

That depends on how you define success.

Are more people covered?  Is health insurance more affordable? Are patients “protected”?

In general, the data says yes.

From Jonathan Cohn, a summary of PPACA’s impact on coverage:

the proportion of working-aged adults without insurance dropped from 20 percent in the late summer of 2013 to 15 percent in the late spring of 2014...there are still a lot of Americans walking around without health insurance today. But there are about 9.5 million fewer of them than there were last fall… [emphasis added]

re Affordability, among those who enrolled in a PPACA-compliant plan, about half saw premiums increase – with the other half seeing a reduction.  Notably, the self-reported health status of enrollees was generally lower than the overall population.  This isn’t surprising; many likely couldn’t get coverage due to pre-existing conditions before PPACA.

Of course, many got subsidized insurance, which significantly reduced their premium cost.  Some may say this is a problem; I’d suggest that one can’t fairly evaluate PPACA on individuals’ ability to afford health insurance without accepting the need for and role of subsidies.  Which, btw, are paid for by various fees and taxes on health plans, devices, tanning beds, and rich benefit plans and reductions in reimbursement for Medicare.

The patient protection piece is harder to assess; the elimination of medical underwriting, requirement that plans cover kids to age 26, mandated enrollment, subsidies for small employers, and enforcement of actions against health plans who try to finagle their way to excluding certain groups (AIDS patients, for one), are all helpful.  However, given that health insurers have always made their money by not insuring those who might have claims, this will be a long, difficult, and up-and-down struggle.

Old ways don’t change without a lot of continued, intense, focused pressure.

What does this mean for you?

PPACA is here to stay. It is pretty far from perfect, but it’s better than the alternative.

Compound medications – a killer scam

Compound drug use is exploding – so much so that Texas has changed their employee benefits program to limit reimbursement to $300.  They didn’t have much choice, as the Texas Employees’ Retirement System’s compound drug costs have gone up 4,600% over five years.

That was not a typo.

They’re now requiring prior auth and ONLY covering FDA approved drugs.

The only thing that may potentially slow down the growth is bad news – and that was delivered in spades last week with the news that a coroner’s report found the infant died after ingesting a topical pain cream.  After sustaining injuries at work, the baby’s mother, Priscilla Lujan, applied some of the cream to her knee and back, made a baby bottle, and some of the substance got on the nipple.  The story was broken by Karen Foshay of KPCC; Foshay reported the cream contained the

“antidepressant amitriptyline, the pain reliever tramadol and the cough suppressant dextromethorphan…

Workers’ compensation records show Jarminski’s office billed $1,700 for the initial 25-day supply of the cream. That is much more than the prices of various mass-produced medications, asserted McCann.

Jarminski [the mother's physician] was informed the cream was linked to Lujan’s son’s death but, according to McCann, that didn’t stop the doctor from sending more creams.

“Priscilla had expressed she didn’t want to see that cream anymore or use it anymore,” McCann said. “Despite that they continued to send her more creams by mail and bill workers’ comp for it.”

McCann said at least two to four more tubes of cream were sent to Lujan after her son’s death. It’s unclear how much Jarminski billed in workers’ compensation claims for those additional tubes.

As horrible as this is, this baby’s death may protect others from this deadly scam. The press is all over this, medical malpractice insurers are undoubtedly quite concerned, and law enforcement is getting more engaged.

While one would hope the mother’s doctor prescribed this medication solely for health reasons, the prescribing physician was one of those indicted in the California compound drug case.

Of course, the compounders have hired a PR firm to try to convince us with BS that which they can’t validate with science – and even started an astroturf group to “fight for patients rights”.  Like the right to have tubes of deadly cream lying around…

UPDATE From a colleague’s email -

One strategy that seems to work well in Texas is to approach every compound as Experimental and Investigational and require prior authorization for ALL. The Texas WC UR rules appear to allow for that approach since essentially none of the compounds has gone through specific FDA approval. Without high quality (or essentially any) studies to support their use compounds can only be viewed as E&I in Texas.

At least one large carrier I know of is approaching compounds this way in Texas and other jurisdictions.

For those interested in the current state of research into compounds and workers’ comp, CompPharma’s research paper can be downloaded here.

What does this mean for you?

DO NOT approve compounds without proof of medical necessity and safety.