Monthly Archives: November 2015

An Open Letter to the Latin American Medical Tourism Community

Today marks the one-year anniversary of the creation of FutureComp Consulting, and this past October 29th was the three-year anniversary of the creation of my blog, Transforming Workers’ Comp.

In the three years that I have been writing my blog, I have attended three medical tourism conferences, two in Florida, and one in Mexico in November of 2014, where I gave a presentation entitled, “Barriers, Obstacles, Opportunities and Pitfalls of Implementing Medical Tourism into Workers’ Compensation.”

At these conferences I have met many people from Latin America and have told them of my idea for transforming workers’ compensation in the US by sending patients to countries in the region.

To date, not one person I met at these conferences, nor anyone who has read my blog and is from that region has contacted me to offer their support and services to make this idea a reality.

And when I discuss the issue with Americans, especially those in the workers’ compensation industry, their response has been to call it a stupid and ridiculous idea, and a non-starter.

They have also suggested that medical care in your region is not up to American standards, despite the fact that I have pointed out to them that outcomes here are not guaranteed, and that mistakes can happen in local hospitals as well.

Here is a sample of a typical response from someone in the workers’ comp industry:

“Honestly, medical tourism for injured employees will not work. We are already challenged daily when injured employees leave the country and we have to provide them with care outside of the US. I hear you but it’s a stretch. We can’t get good outcomes here I hate to think what would happen when we send them somewhere else. The laws are much too complicated to garner the intended result.”

Early in my blogging, I wrote the following article based on some comments made on social media that I included in a virtual dialogue, “Point/CounterPoint: A Virtual Dialogue on the Merits of Implementing Medical Tourism into Workers’ Compensation”.

In the presentation I gave in Reynosa, I said that there is a lack of knowledge about the quality of medical care abroad (so-called “Third World medicine”) and that American harbored negative attitudes towards medical care abroad, as well as the conceit known as “American Exceptionalism” whereby only American doctors know how to practice medicine and only American hospitals are qualified to offer care.

However, not all Americans are like that; in fact, one lawyer representing injured workers had knee surgery in Costa Rica, and had such a great experience, he wants his clients to have that too.

In my presentation, I laid out six major barriers and obstacles to implementation, but in writing this letter now, I want to say to the Latin American medical tourism community, that there is a seventh barrier and obstacle, and that is your inability to market and defend your medical services to the American insurance industry, and most specifically, to the workers’ comp community.

That has been one reason why I have been writing about this for so long. In many of my articles, I implore you to do something about this. I even said this in Mexico when I said that you had to go after the market; the market will not come to you.

Just so you don’t think I am some crazy gringo, Norte Americano, here are some of the articles I have written that does exactly that:

The Stars Aligned: Mexico as a medical tourism destination for Mexican-born, US workers under Workers’ Compensation

Lower Cost, High Quality Health Care is Nearby

Clearing the Air: My Defense of Implementing Medical Tourism into Workers’ Compensation

Far in Front of the Crowd

Muy por delante de la multitud

E PLURIBUS UNUM: Latin American and Caribbean Immigration, Workers’ Compensation and Medical Tourism

Why Medical Tourism for Workers’ Comp is an idea whose time has come

Questions, Questions — How Medical Tourism Can Become a Real Alternative in Health Care and What it Means for Workers’ Compensation

More Questions, Questions: A Call for Answers from the Medical Tourism Industry

Más preguntas, preguntas: Una llamada para obtener respuestas de la industria del turismo médico

Finally, next week was supposed to be when I was going to give a second presentation in Mexico, this time in Puerto Vallarta, but for personal reasons, I had to back out.

This is the presentation I was going to give that outlines the challenges facing workers’ compensation, and what the medical tourism industry needs to do.

So my challenge is to you, Latin and Central America. Are you going to market your services to this industry, and will you defend your medical care as equal to, or better than the care we get in the US?

What about price and transparency? Will you share data with industry leaders skeptical of your better medical care, or are you going to allow them to call you “carnival barkers”?

I am willing to work with you. You know how to reach me.

The Miasma of Fraud

One last post before you celebrate Thanksgiving.

Business Insurance’s Stephanie Goldberg reported today, that five people have been charged  with workers’ comp insurance fraud in California, and that the insurance commissioner called it, “one of the largest workers’ compensation insurance fraud cases we have ever seen.”

In July, 2014, I wrote two articles about fraud in California, “The Stench of Fraud: Why Workers’ Comp Can No Longer Be a Closed System” and “The Stench of Fraud, Continued.”

Charged in the case was the former CFO of Pacific Hospital, James L. Canedo, two orthopedic surgeons, a chiropractor, and Paul Richard Randall, a health care marketer.

They were charged with illegally referring more than 4,000 patients for spinal surgeries, and generated more that $580 million in fraudulent bills during an eight-year period, according to the US Department of Justice, in a statement released yesterday.

Many of the claims were paid by the California work comp system, the rest by the federal government.

Canedo and Randall have pled guilty, and the other three have agreed to plead guilty, and under the terms of their plea agreements, each defendant could face prison terms and be required to pay restitution to their victims.

The US Attorney’s office for the Central District of California said in a statement that Canedo faces 10 years in prison and at least $20 million in restitution.

The scheme consisted of kickbacks of $15,000 for each lumbar fusion surgery, and $10,000 for each cervical fusion surgery, according to the US Attorney’s statement.

The ongoing investigation, dubbed “Operation Spinal Cap”, discovered that some of the patients lived hundreds of miles away from Pacific Hospital, and closer to other qualified facilities, the patients were not informed that medical professionals were offered kickbacks for referrals, and that insurers had paid the hospital more than $226 million for the surgeries.

Once again, we see that workers’ comp, especially in California, but also in other states, is like a fetid pool of rotting vegetation and other foul matter, so that what was once called a stench, is now a miasma that hangs over the surface of the system.

It does not have to be like that. It can be better. You can find an alternative to expensive surgeries and illegal payoffs, if only you would consider new ideas and new possibilities.

Or you can continue to breathe in the foul air. The choice is yours.

 

 

 

Survey Says, Employers Shifting Health Care Costs to Workers: Will Workers Shift to Work Comp?

In September, Jay Hancock wrote an article for Kaiser Health News, that reported that premiums for employment-based medical insurance rose moderately, to 4% in 2015, but that employers continued to shift in expenses to workers, according to a new survey.

According to Mr. Hancock, the average premium for single coverage rose to $6,251 while the average premium for a family plan increased to $17,545, according to a survey published by the Kaiser Family Foundation and the Health Research & Educational Trust.

Deductibles have been rising substantially faster than total health costs, according to Hancock, and 46% of covered workers have a deductible of at least $1,000 this year for single coverage as employers shift to “consumer-directed” plans that give members incentives to seek less-costly care.

Deductibles are more than $2,000 for single coverage for almost a fifth of covered workers.

Drew Altman, KFF’s CEO said in the article, “The so-called great slowdown in health care costs has been all but invisible to consumers because deductibles have been going up so much faster than their wages.”

The following chart illustrates this shift from 1999 to 2015.

kff-image-1

Other takeaways from the survey of nearly 2,000 large and small employers are as follows:

  • In the face of measures from the 2010 health law that took effect this year to encourage coverage, some employers expanded insurance while a small percentage shifted jobs to part-time to avoid the obligation to offer a plan.
  • One in five companies with at least 200 employees expects its most popular plan to be liable for the “Cadillac tax” on high-value coverage that takes effect in 2018. Employer efforts to avoid the tax will probably shift new costs to workers, analysts said.
  •  It’s not only workers’ deductibles that are rising. The portion of premiums they pay has gone up, too. Employee premium costs have increased 83 percent since 2005 while the total cost of a policy went up 61 percent.
  • Worker wellness programs continue to surge, with nearly a third of large firms offering employees financial incentives to take health-risk screening tests.

A prior article I wrote stated that the Affordable Care Act (ACA) may shift claims into workers’ compensation.

If employers continue to shift costs to their employers, their employees may shift the cost of their health care to workers’ comp. Case in point, another article I wrote in 2013 said that employees are not prepared for increased costs,  and may not want control of their options, and lack education about what is meant by “consumer-driven health care.”

So it is not too far out of the realm of possibility that some workers whose employers have shifted the cost of medical insurance on them, will turn around and shift it to their employer’s work comp carrier.

If that happens, and they require expensive surgeries, unique alternatives may need to be implemented, even if it is outside the box, and outside the border.

Original article by Jay Hancock, September 22, 2015, Kaiser Health News

 

 

What Legalized Pot Will Cost Employers

Last May, I wrote a short piece, “California is Going to Pot“. It discussed the issue of whether medical marijuana will be allowed in workers’ comp.

Caroline McDonald, Senior Editor of the Risk Management Monitor and Risk Management magazine, wrote an article today about the cost to employers should more states legalize pot.

Ms. McDonald cited a White Paper from Quest Diagnostics that suggested that employers will face potentially costly litigation, as case law develops, and will face challenges to protect employees from injury and to comply with drug-free workplace requirements.

Quest reported that legalization has led to the production of pot-infused foods and gadgets, such as vape pens, and that these two modes of consumption will make it more difficult, if not impossible, to tell when employees are using on the job.

Ms. McDonald writes that as use of pot increases, so will injuries, accidents, mistakes, and illnesses, which will escalate the cost of the company’s liability, workers’ compensation, and health insurance.

She outlines five steps employers can take to protect themselves:

  1. Stay up-to-date with the changing legal landscape and adjust workplace policies accordingly.
  2. Remember that marijuana is still illegal under federal law.
  3. Join other employes to monitor state legislation and take action with legislators to ensure workplace protections are included in any marijuana laws.
  4. Educate your workforce about the danger it poses to children, families and the workplace.
  5. Challenge the notion that marijuana is medicine, or risk paying for it in your health insurance. No marijuana medicines being sold in states that legalized them have been approved by the FDA as pure, safe, or effective. Doctors cannot prescribe them and pharmacies cannot sell them.

Number five is not one that I would subscribe to, as I believe that it does help those with serious illnesses such as cancer and other rare and debilitating diseases.

So long as pot remains illegal under federal law, the FDA will not approve the use of it as a medicine, but that is what needs to change.

Yet, risk management personnel need to be mindful of the other steps, and generally, people who are using marijuana as medicine are not engaged in dangerous or harmful employment, to themselves or others. When you are that sick, working is one of the last things you are concerned with.

And advocates for legalized pot should be aware of the risks it poses not only on the workplace, but for the employee as well. Failing a drug test can get you denied work comp benefits, unemployment insurance, especially if they are terminated for cause being under the influence, and not to mention the legal hassles the employee will face.

 

 

 

 

 

California Work Comp: What a Mess!

Kevin Tremblay, V.P., National Accounts for SMS National Solutions in Altamonte Springs, Florida, and a connection of mine on LinkedIn, penned the following article about California work comp and liens.

Normally, I shy away from articles involving California work comp, but on one or two occasions have written articles about it that I feel fit the subject of this blog. This article is one of those, but is more about the mismanagement of one state’s work comp system, rather than the state of affairs of the entire system nationwide.

Here is Kevin’s article in full:

California Workers Compensation System – Liens, Waste and Medical Provider Billed Charges

The California workers’ compensation system is unique like no other state in the country. There are two distinct sides of the equation in California workers’ compensation, Applicant and Defense.

Applicant-The party, usually the claimant that opens a case at the local Workers Compensation Appeals Board (WCAB) office by filing an application for adjudication of claim.

Defense-The party, usually the employer or its insurance company opposing the claimant in a dispute over services and benefits.

Lien-A right or claim for payment against a workers’ compensation case. A lien claimant, such as a medical provider, can file a form with the local Workers Compensation Appeals Board to request payments of money owed in a workers’ compensation case.

OMFS-The official medical fee schedule is promulgated by the DWC, Department of workers Compensation administrative director under labor code section 5307.1 and can be found in section 9789.10 of title 8, California code of regulations. It is used for payment of medical services required to treat work related injuries and illnesses. The California Official Medical Fee Schedule is considered prima facie evidence of reasonableness.

A lien claimant has the burden of proving that any amount charged is reasonable, and a lien claimant must prove that there are “extraordinary circumstances” that justify a fee that exceeds the Official Medical Fee Schedule.

According to some recent reports, an expected 500,000 liens will be filed by treating medical providers in the California Workers Compensation system in 2015, costing employers and insurers an estimated $200 million dollars in loss adjustment expenses and delaying claims adjudication.

Some of these liens forces some employers or insurance companies to settle liens they may not be legally obligated to pay simply to settle and close the claim to avoid paying additional disability, administrative and legal costs. Emphasis here on, ‘forces

Some additional statistical findings reported by the DWC are:

  • Medical treatment liens account for more than 60 percent of the liens filed, and 80 percent of the dollars in dispute.
  • $1.5 billion per year is claimed in medical lien disputes after adjusting for amended lien files.
  • One-third of medical liens involve disputes over the application of the Official Medical Fee Schedule.
  • Authorization for treatment was in dispute in seven out of 10 medical liens surveyed.
  • Reasons treatment was not authorized were: 37 percent provider not authorized to treat (mostly out-of-network); 7 percent denied claims; 6 percent medical necessity of treatment rejected by utilization review; 1 percent contested body parts; 20 percent authorization status unknown or not stated.
  • The volume of liens filings is sensitive to procedural changes, such as the adoption or repeal of a $100 filing fee and the adoption of new filing procedures.
  • Up to 30 percent of medical liens are prematurely submitted before the time has elapsed for the claims administrator to pay or object to the provider’s bill.
  • Ten percent of medical liens are submitted on the date the service is provided.
  • Nearly one quarter of medical liens are filed more than two years after the last date of services for which payment is claimed, including 6 percent that are filed five or more years after the last date of services.

The report was based on information provided by the Division of Workers’ Compensation, and was an attempt to characterize the problem so policymakers can propose solutions to the lien problem.

Source: CHSWC/InsuranceJournal.com

The Lien System Game:

Bill ($5,000) – Paid ($1,000)-in accordance with OMFS

Fee to file the lien the claim in court by medical provider $150.00

Lien balance $4000

Demand: $3800

Offer: $2000

Negotiation continues

Collector says $3200 is the bottom line for him

Adjuster forced to pay and settle to avoid additional claim cost agreement at $3200

So while the DWC and legislators continue to sort over of resolve the issues of the lien process, what can adjuster’s implement to mitigate the process and reduce claims costs? The following strategies are a good place to start:

  • How much is the lien?
  • How much is the OMFS or reasonable value of the lien?
  • What are your lien defenses?
    • AOE/COE
    • MPN
    • OMFS or other fee schedules / IBR
    • Reasonableness & Necessity
    • UR / IMR
    • Other technical issues
  • What evidence do you have to support your position? Objection letters? MPN Notices?
  • Did you serve your evidence on the lien claimants and/or your counsel?
  • What are the probable economics of your decision to settle or fight?
  • How much are you willing to pay to settle or resolve the lien?
  • We paid per OMFS & DOS is after 1/1/13
  • You failed to request 2nd review within 90 days (LC 4603.2(e)(2))
  • You failed to request IBR within 30 days from 2nd review (LC 4603.6(a)
  • You are done. The Code says: “the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payments.”
  • Any appearance at the board on your lien will result in a petition for costs & sanctions! [LC 5811 & Valdez decision (en banc) (77 CCC 1113)]

The State of California has taken recent measures with the advent of SB863 and labor codes 9792.5.12 and 4903.1(b) regarding independent bill review process and tighter lien submission rules. California legislators need to continue to act and close the loop holes in existing laws to mitigate and eventually eliminate the magnitude of waste and abuse by certain medical providers that is currently taking place and plaguing the workers’ compensation system.

The lien process is certainly unique to the rest of the country’s state by state workers’ compensation system. So what is it? Unethical gaming of the system and adding tremendous unnecessary costs and clogging the California courts and workers’ compensation system, no question. Anything more, you decide…..

Final Rule for Bundled Hip and Knee Replacements Published

Four months ago today, I wrote a piece called, “CMS to Require Bundling of Reimbursements for Hip and Knee Surgery”, that said the Centers for Medicare & Medicaid Services (CMS) will require the bundling of reimbursements for hip and knee surgeries.

Today, Health Affairs blog published an article reporting that CMS has recently published the final rule for the Comprehensive Care for Joint Replacement (CJR) model, which is a mandatory bundled payment model for lower extremity joint replacement (LEJR) services in certain geographic areas.

The article, by Patrick H. Conway, Rahul Rajkuma, Amy Bassano, Matthew Press, Claire Schreiber and Gabriel Scott, said that hip and knee replacements are the most common inpatient surgery procedures for Medicare beneficiaries, and can require long recovery and rehab periods.

The authors said that in 2014, more than 400,000 beneficiaries received hip or knee replacement, which cost more than $7 billion just for hospitalization.

They also reported that the quality and cost of care for these surgeries varied significantly by region and by hospital, and was true for both the care received in the hospital and for post-acute care outside.

The variation, they said, is due to the way Medicare pays for this care today, spread among multiple providers, with no single entity accountable for the total patient experience.

Care can be fragmented, they wrote, which leads to adverse outcomes.

Here are the key takeaways from the final rule:

  • the CJR model seeks to incentivize Medicare providers and suppliers to work together to improve the quality and reduce the costs of care for patients undergoing lower extremity joint replacement
  • the acute hospital where the procedure occurs will be accountable for aggregate Medicare expenditures and the overall quality of related care
  • the model will include participant hospitals located in 67 Metropolitan Statistical Areas (MSAs) throughout the country
  • acute hospitals paid under the Inpatient Prospective Payment System (IPPS) and located in the selected MSAs will be included in the model, with the exception of hospitals currently participating in Model 1 or Models 2 or 4 of the Bundled Payments for Care Improvement (BPCI) initiative
  • depending on the hospital’s quality and aggregate spending performance, the hospital may receive an additional payment from Medicare, or need to repay Medicare in the second year if spending exceeds targets
  • hospitals will need to work with physicians and post-acute care providers, such as home health agencies and skilled nursing facilities, to ensure patients get the care they need

This is in contrast to what I reported on in July, when I said that a former CMS official was cited in the Freeman article as saying that mandatory bundled payments for hip and knee surgeries would shutter one in four skilled nursing facilities and trigger “demand destruction in areas such as diagnostic testing, hospital stays, and avoidable readmissions.”

Whether or not this final rule will do what the authors of the Health Affairs article says it will do remains to be seen, but judging by past CMS programs to affect quality and costs, this may be wishful thinking on the part of the authors.

The insistence that one more new initiative, or more incentives, or one more new model or new rule will change the way health care is being provided in the US, just goes to show that until we adopt a single-payer, “Medicare for All” system with less rules and less incentives, some people will continue to game the system, then we will see a radical change in the American health care system.

And if workers’ compensation follows changes in health care under Medicare, especially how it determines reimbursements for hip and knee surgeries, which are also common to workers’ comp, we can expect to see issues in workers’ comp.

Alternatives must be considered to an ever expensive and poor quality of health care for workers’ comp. That alternative is medical travel.

Challenges Facing Work Comp

In three weeks, members of the medical tourism industry will gather in Puerto Vallarta, Mexico to attend the 6th Mexico Medical Tourism Congress.

You may recall that I was invited and attended the Congress last year, and was invited again this year. However, due to personal and financial reasons, I am not attending this year.

I am however, posting my PowerPoint presentation below for your viewing, with narration by yours truly. I hope you find it interesting and informative.

Challenges Facing Workers’ Comp (PowerPoint)

Challenges Facing Workers’ Comp (video)