Monthly Archives: August 2016

Business Insurance Resurrection

As reported by several outlets this morning, Business Insurance magazine is not dead, the news of its death was greatly exaggerated.

It seems that Crain, the original owners of BI, have sold the magazine, and it will be back online soon, and in print in October after a redesign.

In light of David De Paolo’s untimely death, this is great news for the whole insurance industry, and especially the workers’ comp space.

I am looking forward to seeing more great articles from them in the near future.

 

Large Variations in Payments for Hospital Outpatient Care to Injured Workers

Back in April of this year, I wrote about a study by the Workers’ Compensation Research Institute (WCRI) in which it was found that fee schedules may increase the number of workers’ comp claims.

Today, the WCRI released a new study that said that “hospital outpatient payments per surgical episode varied significantly across states, ranging from 69 percent below the study-state median in New York to 142 percent above the study-state median in Alabama in 2014,” according to Dr. Olesya Fomenko, co-author of the study and economist at WCRI, and who also is mentioned in my previous post.

The report also stated that “variation in the difference between average workers’ compensation payments and Medicare rates for a common group of procedures across states was even greater—reaching as low as 27 percent (or $631) below Medicare in New York and as much as 430 percent (or $8,244) above Medicare in Louisiana.”

Here are the major findings:

  • States with no workers’ compensation fee schedules for hospital outpatient reimbursement had higher hospital outpatient payments per episode compared with states with fixed-amount fee schedules—63 to 150 percent higher than the median of the study states with fixed-amount fee schedules. Also, in non-fee schedule states, workers’ compensation paid between $4,262 (or 166 percent) and $8,107 (or 378 percent) more than Medicare for similar hospital outpatient services.
  • States with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules—32 to 211 percent higher than the median of the study states with fixed-amount fee schedules. Similar to non-fee schedule states, workers’ compensation payments in states with percent-of-change based fee regulations for common surgical procedures were at least $3,792 (or 190 percent) and as much as $8,244 (or 430 percent) higher than Medicare hospital outpatient rates.
  • Most states with fixed-amount fee schedules and states with cost-to-charge ratio fee regulations had relatively lower payments per episode among the study states. In particular, for states with fixed-amount fee schedules, the difference between workers’ compensation payments and Medicare rates ranged between negative 27 percent (or -$631) and 144 percent (or $2,916).

Still think that workers’ comp is doing okay? Still think that keeping the status quo is the best option for injured workers? Still think that thinking outside the box, and considering alternatives to the ever increasing cost of medical care for workers’ comp is stupid, ridiculous and a non-starter?

Or do you believe, as Joe Paduda wrote about today in his blog, that workers’ comp is no longer needed for 90% of America’s employees, as the workplace has become safer than the non-occ environment.

The idea brought forth, and as Joe said, it is an intriguing, but wrong one, is that the medical care can be provided under health insurance, and the disability coverage can be added to long-term or short-term disability insurance.

Whichever way you look at the issue, workers’ comp is not going away, but it is getting more expensive to pay for medical care. The problem here is, too many Americans are slavishly wedded to outmoded ways of thinking, outmoded economic policies and models, as well as an outmoded economic ideology, to think rationally and seriously about alternatives.

Lastly, there are too many cooks (or should that be crooks) with their hands in the pot who have a vested interest in keeping things the way they are. If that is so, then the WCRI is only telling us what we should already know…injured workers are screwed and so are the carriers and employers. As long as outside interests have a hand in the system, and those who profit from higher costs block real change, this situation will only get worse.

I am sure glad it is not my money being wasted like this.

As always, to purchase the study click this link:

http://www.wcrinet.org/studies/public/books/hci_5_book.html

 

Blocked Aetna-Humana Merger Reveals True Reason for Pullout from ACA

In an article yesterday in Business Insider, the recently blocked merger between Aetna and Humana is the reason given for Aetna’s sudden decision to leave the ACA exchanges.

Contradictory statements from Aetna in response to this decision, as to their ability to profit from the merger or not profiting from the exchanges, does not hide the fact that the bottom line is this:

The laws of Capitalism are incompatible with the goals of providing health care to everyone, even with all the fancy commercials and advertisements from the insurance companies that they are there for you.

BS!

They are not there for you, unless you are a top executive of the company, or a stockholder or shareholder, or investor. As the article states, this merger would have led to a consolidation of the health care industry to only three mega companies.

Do you want to wait until there is only one, a la the 1970’s movie, “Rollerball”, where corporations have dominated whole industries and replaced nations, or do you want to provide health care to all, no matter what their ability to pay, or if it makes a profit for some greedy bastards?

The choice is up to you.

Here is the link to the entire BI article:

http://www.businessinsider.com/aetna-humana-merger-reason-for-leaving-obamacare-2016-8

Big Insurer to Put Dispensing Docs on Notice

An article in Healthcare Finance yesterday reported that Aetna has put more than 900 opioid prescribing physicians on notice that they fall with the 1 percent of top opioid prescribers.

Here is the link to the article:

http://www.healthcarefinancenews.com/news/aetna-puts-more-900-physicians-notice-they-fall-within-top-1-percent-opioid-prescribers

What does this mean for workers’ comp?

It means that other insurers need to do the same for the physicians who prescribe opioids for injured workers, but as Joe Paduda recently reported, the drug spend is going down.

But he also said this, earlier this week,  “Medical services for people with opioid dependence diagnoses skyrocketed more than 3,000 percent between 2007 and 2014.”

This was for privately insured people, he continued.

“The dollar cost of the drug itself is the least of the cost issues; dependency is strongly associated with much higher utilization of drug testing, overdose treatment, office visits and (my assumption) higher usage of other drugs intended to address side effects of opioids.”

So just because Aetna is watching does not mean that the problem is going to go away any time soon.

Medical malpractice at Pilgrim’s Pride…the poultry company?

It sounds like malpractice to me. That’s what I’ve been thinking ever since learning how the injuries sustained by poultry workers are treated (and not treated) at the company nursing stations.

Source: Medical malpractice at Pilgrim’s Pride…the poultry company?

Opt-Out: Here We Go Again

Once again, we have to look at the issue of opt-out. This time in the land of Lincoln.

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

Abraham Lincoln

Yet, it seems that Capital is still trying to stick it to Labor by dismantling the workers’ comp state systems.

Stephanie Goldberg, writing yesterday in Business Insurance, reported that the Illinois Policy Institute, an organization the Republican Governor, Bruce Rauner, has previously donated to, issued a report last month calling for “updates” [Emphasis added] to the state’s more than 100-year-old system.

The author of the report and the director of the institute’s regulatory reform, Mark Adams, said in an phone interview that, “the system that is in place isn’t serving workers effectively.”

He acknowledged that it is difficult to reform the system because there are so many stakeholders (a point made by myself and others).

Yet, the report goes on to say that, “the most effective way for government to protect workers is not by a restrictive one-size-fits-all system, by by creating broad rules of the game that give workers more freedom to contract with employers for a deal that is better suited to their own situation.”

On the one hand, what the report is stating makes sense, and seems to agree with the idea of opening up the system to new ways of providing care to injured workers, but if we look deeper at the alleged success of opt-out in Texas, Oklahoma, and the failure to get it passed in Tennessee and South Carolina, we find that the proponents of opt-out have not been very up front and honest on the subject.

What they really want is to blow up the entire workers’ comp system nationwide, and take us back to before Triangle, a point they seem to be making quite successfully in some quarters of the work comp industry because of the apolitical and ahistorical atmosphere in which this issue is often discussed.

We recently lost one brave soul who fought the temptation to drink the kool-aid on opt-out, and we cannot let his memory pass without remembering that he was not fully convinced that opt-out had proved itself.

In my last post, I mentioned what happens to closed systems if they do not change. With opt-out, we would not be seeing an opening of the system that still offers protections to injured workers, albeit with more options and more flexibility, but rather a complete and utter destruction of the entire system, which is what ARAWC and the Illinois Policy Institute wants, so that the employer is the one who benefits, not the employee.

Mark Adams stated that the system they have looks like it deals with the 19th Century, and not with telecommuters, or people who balance caring for a child, an elderly relative, and work responsibilities. True, but going back to the 19th Century when workers had to sue for benefits, if they were lucky to get to court, is not the answer.

One reason why opt-out has not been successful outside of Texas and Oklahoma, is as Stephanie Goldberg, says, the potential for constitutional challenges to opt-out laws could give pause to states considering legislation, as what happened in February when the Oklahoma Workers’ Compensation Commission ruled that provisions of the state’s Employee Injury Benefit Act deprive workers of equal protection and access to the courts, and to unfairly allow employers to define “injury.” The Supreme Court in Oklahoma is reviewing the case.

One wonders what the old railsplitter would think about the idea to deprive Labor of its rights to equal protection and access to courts, and to benefits they deserve when injured on the job. Lincoln would be horrified to learn that Capital has become superior to Labor.

The Dog Days of Summer

Now that the temperature has climbed into triple digits in some places, and others are feeling the heat of 90 plus degree days, I thought it would be good just to let my readers know that I am still here, even though I have not been writing much as of late.

Maybe that is because of the sudden death of David De Paolo and the industry is coming to grips with his tragic loss, it may also be that not much is happening as this is now summer vacation season, and people are away from the business world.

This time has given me an opportunity to concentrate on more personal matters that are of immediate importance to my well-being, and to reconsider the direction of this blog.

I have a vision, a vision some of you share, and a vision many of you cannot see, but as there are vested interests who stand in the way of progress in one industry my vision relates to, and the other industry is fixated on the “how”, and not on “why not”, and is plagued with doubts about just how big it really is, economically, as has recently been reported.

But a vision is not enough if there are barriers and obstacles and negativity surrounding it to transform the way things currently are done. There has to be a recognition that hard work and determination and perseverance are necessary to break down those barriers and obstacles, and faith in the efficacy of the vision is needed to turn a negative into a positive.

So, therefore I have decided to write less about the vision, and more about what is happening in the industry and in healthcare in general that I feel my readers would like to see. It does not mean I have given up; it just means that until the forces of globalization break the legal and financial barriers and obstacles standing in the way of medical travel for workers’ comp, and the industry itself comes to realize that it must change or go quietly into that good night that automation and artificial intelligence are leading it to, there is no point in pounding it into closed minds.

As for those who seek my explanation of “how” this could be accomplished, you are forgetting that this is not something that is already happening. There is no blueprint, no guidelines for opening up a closed system like workers’ comp to the rest of the world. It takes partnerships and brainpower and commitment, not some get rich quick scheme.

Those of you who ply your trade in medical travel are looking for the quick fix, the easy way out, and the rapid turnover of patients to medical facilities. It is not happening in general healthcare, and it certainly is not happening in workers’ comp, and not without sweat equity on your part.

I’ve said my piece for more than three years, and no one has seriously taken me up on this, so that is also why I am changing course. Medical travel will happen one day, but it won’t take conferences and meaningless certifications from fast-buck artists to make it happen.

One last note, I too lost someone recently who was a dear friend and mentor in my career. We met here in Florida in the 90’s. He died suddenly of a massive stroke, according to his wife, who answered his cell phone when I called him near two weeks ago. I learned about it the same week David De Paolo died. They will be missed. David by the industry he loved, and my friend by me.

Have a safe summer.