Category Archives: ACO

Models, Models, Have We Got Models!

FierceHealthcare.com today reported that CMS (those lovely folks with all them rules), launched three new policies Tuesday that continue the push toward value-based care, rewarding hospitals that work with physicians and other providers to avoid complications, prevent readmissions and speed recovery.

The newly finalized policies are meant to improve cardiac and orthopedic care, and also create an accountable care organization (ACO) track for small practices, according to the report.

There will be three new cardiac care payment models for hospitals and clinicians who treat patients  for heart attacks, heart surgery to bypass blocked coronary arteries, or cardiac rehabilitation following a heart attack or heart surgery.

Federal officials said that the cost of their care…varied by 50% across hospitals and the share of patients readmitted to the hospital within 30 days also varied by 50%. Medicare, the article points out, spent more than $6 billion in 2014 for care provided to 200,000 Medicare patients who were hospitalized for heart attack treatment or underwent bypass surgery.

As for orthopedic care, the new payment model is for physicians and hospitals that provide care to patients who receive surgery after a hip fracture, other than hip replacement.

They also finalized updates to the Comprehensive Care for Joint Replacement Model, which began earlier this year.

So far, that’s three models. But wait, there are more where those came from.

There’s the new Medicare ACO Track 1+ Model, that has a more limited downside risk than other tracks in the Medicare Shared Savings Program (another model I discussed a while back in the post, “Shared Savings ACO Program reaps the most for Primary-care Physicians“).

These new five-year models provide clinicians with other ways to qualify for a 5% incentive payment through the Advanced Alternative Payment Model (APM) path under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the Quality Payment Program. (three more models — so many, in fact, I am losing count)

Why am I pointing out the problem with the release of new payment models?

I’ll tell you why. When I began my MHA (Masters in Health Administration) degree program, I took an online elective on Healthcare Quality. The textbook we read discussed how CMS over a period of several decades, created and instituted so many models and programs, that it made me wonder why our health care system was so complex, expensive and so out of whack compared to health care systems of other industrialized countries.

The answer was simple. Too many models, programs, rules, and so on that only gum up the works and make real reform not only impossible, but even more remote a possibility as more of these inane models are added to what is already a broken system.

Winston Churchill said that you can always count on Americans to do the right thing, after all the other things were tried. We are still on the trying part, and I am afraid we will never get to where Sir Winston said we would.

 

Workers’ Comp Goes Federal: An Update

The other day, I wrote a post that said that state Medicaid programs will be able to recover all of the proceeds from a settlement that were expended on behalf of a beneficiary.

My reporting of MaryRose Reaston’s article garnered some very positive comments from some of my readers.

Yet, today, my fellow blogger Joe Paduda countered MaryRose’s article, and stated that “No, ACA has not ‘overstepped its bounds‘”.

According to Joe, the efforts by the states are just that, state-based, and they are allowed and enabled by federal legislation…separate and distinct from the ACA.

Joe cites an article written by Michael Stack, Principal of Amaxx LLC that summarizes Medicaid recovery in workers’ comp cases.

As Joe reports, Michael noted that the legislation that allows Medicaid to pursue settlements was part of the Medicare Secondary Payer Act, a part of the 2013 budget bill.

Normally, when I write about some issue someone else wrote about, I never have to provide my readers with an update that challenges the original author. Generally, my updates are just that, updates that add to the discussion. This is not the case here.

So just to be fair to everyone, I decided to correct the situation by writing a follow-up. I trust my readers will understand that I did not mean to mislead or take only one side.

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)

 

SPOTLIGHT Interview on Medical Travel Today.com

The following interview was published this morning on Medical Travel Today.com. They have published several of my articles in the past, as well as a prior interview in 2013.

Medical Travel Today (MTT): It’s been awhile since Medical Travel Today has checked in with you. Remind our readers of your position in the medical travel industry, as well as what you have been involved with since we last chatted in 2013.

Richard Krasner (RK): I am the blogger-in-chief of the Transforming Workers’ Comp blog, as well as the CEO and principal consultant of FutureComp Consulting – an as yet not official company dedicated to bringing the medical travel industry into the workers’ comp industry.

Since 2013, I have continued my blogging, and in November 2014, I spoke at the 5th Mexico Health & Wellness Travel Show in Reynosa, Mexico. I was invited to speak again at the 6th Mexico Health & Wellness Travel Show in December, in Puerto Vallarta.

MTT: Can you give the readers some background on FutureComp Consulting and its goals?

RK: I came up with the name of the company because I truly believed that the future of workers’ compensation in the U.S. has to be more globally focused, especially since the workforce in the U.S. is increasingly Latino and Asian, as has been reported by those who follow the demographic makeup of the U.S. population as a whole.

The goal of FutureComp Consulting is to transform the workers’ compensation industry by freeing employers and injured workers from the high cost of surgery for work-related injuries common to workers’ compensation claims, such as back, hip, knee, shoulder, and carpal tunnel.

MTT: Do you work directly with the patient, employer and/or both?

RK: As FutureComp Consulting is at the very early stage as a startup company, there are no patients or employers that I am working with, however, there is one health plan that has expressed an interest to expand what their members’ employees are already doing in northern Mexico with regard to general healthcare, and not workers’ comp.

My vision for the company would involve employers and insurance companies seeking to lower the cost of surgeries for work-related injuries, with the injured workers agreeing to go out of the country when the option is presented to them. They would not be under any obligation or pressure to go abroad for medical care, and should they decline to do so, they would be free to get treated here in the U.S., as if the option was never offered. I think that with the large and growing Hispanic workforce in the U.S., that if presented correctly, they would choose to go to their home country, or similar country for surgery. This would help them overcome any language or cultural barriers, and assure their friends and relatives in that country that they are getting the best care possible, in the best facility their country has to offer. For non-Latino workers, it would be a chance to see another region of the world, and to learn about other cultures. Naturally, in both cases, spouses and even children, would be allowed to travel with them to make the worker feel more comfortable with going abroad.

MTT: Will FutureComp Consulting help connect medical travel patients to specific locations?

RK: I would like to see injured workers travel to Latin America and the Caribbean, because the travel time from the U.S. mainland would be less than four hours, and less of a strain on their injury and recovery from surgery.

MTT:Medical travel provides patients with the opportunity for high-quality, cost-effective healthcare, so in 2015, why do you think there is still pushback?

RK: For one, I think because of media reports about the negative outcomes and serious injuries that have occurred, even a few deaths, here and there. Second, I think too many Americans are under the impression that medical care in other countries outside of North America and Western Europe is so-called “third-world medicine,” and therefore not as good as medical care at home. Third, the concept of “American exceptionalism,” of which I have written about in the past, is too strong in the mindset of most Americans, especially those who have never traveled abroad or to those regions where medical travel is currently offered. I have written about the issue of “third-world medicine” as well, and one domestic critic of mine insists that I want to send patients to Bangladesh or some other country that does not have first-world medical care, as they would define it. I don’t want to disparage Bangladesh or any other country, but that is the perception, and that is why there is pushback, at least in terms of what I am trying to do.

The workers’ comp industry is too conservative, and too stuck in their ways to look outside the box and outside the border of the U.S. to find solutions to the problems plaguing workers’ comp. In other words, they have not caught on that the world, healthcare and workers’ comp are all globalizing.

MTT: Where do you see the future of healthcare headed, domestic and international?

RK: As far as workers’ comp is concerned, I think that the future of medical care is uncertain, because there are forces both internal and external that are challenging the original intent of the system. International medical travel for workers’ comp is years away in much the same way that sub-orbital, commercial flights between one and four hours travel time is — something that may happen by mid-century.

However, domestic medical travel in workers’ comp is occurring due to differences in medical and surgery costs from state to state.

With regard to general healthcare, the enactment of the Affordable Care Act (ACA) has not yet been felt as either hurting or helping medical travel, because the timeframe is too short at this point. Not enough information about the impact of the law has been developed, although there are some conflicting opinions about aspects of the law, which I have recently written about in regard to Accountable Care Organizations (ACOs).

I am not sure if the ACA is driving some people to look abroad, but those who are now covered, and who were not covered before, are more likely than not to stay home, unless it gets too expensive or they lose it because opposition politicians get their way.

MTT: At this point, is there anything else you would like to share with our readers?

RK: Yes, there is. The end of October 2015 will mark three years since I began writing my blog, and one of the biggest disappointments I have encountered has been the number of individuals and organizations that are not behaving in an ethical or professional manner. This has been brought to my attention by several individuals I have had contact with over the past three years. I believe that it is time for this behavior to stop. We must treat each other ethically and professionally. Standards should be established for how to conduct business with each other, between our partners, and with the patients themselves, as well as for how to practice medicine, and relate to foreign patients in terms of learning to speak their language, and providing meals at the proper time and in accordance with their cultural norms, etc. We must also develop organizations to bring the industry together under common laws and procedures for handling problems.

Lastly, I think there is far too much emphasis on conferences and congresses, and not enough on actually going out into the market and getting the business, instead of bringing providers and facilitators together. Also, the industry must, as I said in Reynosa, go after the workers’ comp market; it will not come to you. You must go beyond cosmetic and plastic/reconstructive surgery, dentistry, spas, wellness programs, etc., and market your services for the masses, and not just the rich and affluent. Healthcare should know no class distinctions.

I have been unable to get traction from both the workers’ comp industry and the medical travel industry, but I am willing to partner with anyone who sees what I am trying to do, and wants to be a part of it. I hope this interview will allow me to do so.

The entire interview can be seen here.

New Study Confirms ACA May Shift Claims to Work Comp

The Workers’ Compensation Research Institute (WRCI) released a study today indicating that the Affordable Care Act (ACA) may shift claims into workers’ compensation.

Readers of this blog will have read by now the following posts from earlier this year that discussed at length what many in the workers’ compensation and insurance industries said would happen under the ACA.

Here are the posts:

Accountable Care Organizations May Shift Claims into Workers’ Comp

Failure to Expand Medicaid Could Lead to Cost-Shift to Work Comp

Update on Affordable Care Act’s Impact on Workers’ Comp

Challenges Remain in Physician Payment Reform

The WCRI study is quite long, so I will only give you the introduction and summary of findings. You may purchase the complete study by clicking the following link: http://www.wcrinet.org/result/will_aca_shift_wc_result.html.

The study begins by asking the question, “what is the extent to which the move to “capitated” group health arrangements under the ACA leads to cases that previously would have been paid under group health insurance to end up being paid under workers’ compensation.”

They refer to this as case-shifting, as opposed to cost-shifting, and state that if just 3% of group health cases with soft tissue injuries were shifted to workers’ comp, workers’ comp costs in a state like Pennsylvania could increase by nearly $100 million.

In California, the increase would be higher. More than $225 million, and in Iowa, the additional workers’ compensation costs would be around $25 million, or about 5% of the total benefits paid.

One mechanism the WCRI says by which cases would be shifted to work comp is the growth in the number of patients covered by “capitated” health plans.

Medical providers are reimbursed for each procedure in traditional fee-for-service medicine, which is often called, retrospective reimbursement.

Under capitated plans, the study says, medical providers receive a fixed annual payment per patient, which is often called, prospective reimbursement.

As I reported in my previous articles about cost-shifting, a patient covered by a capitated group plan presents different financial incentives about key decisions to a doctor and the health care organization they belong to, compared with a patient covered by a fee-for-service plan.

For example, if a capitated patient has back pain, the provider and the health organization do not get paid for additional care; whereas, for a patient under fee-for-service, the provider and the organization get paid for each service rendered. Workers’ compensation, the study points out, almost always reimburses on a fee-for-service basis.

Another question the study raised was, “to what extent do the financial incentives facing providers and their health care organizations that arise out of capitation influence the determination of whether or not a case is work-related?

The decision of where to send the bill, the study says, should align with the physician’s assessment of whether the cause was work-related or not. It is the amount of uncertainty about the cause of the medical condition that provides the opportunity, according to the WCRI, for the financial incentives to influence the decision.

How the ACA ties into this is apparent in my post, “Accountable Care Organizations May Shift Claims into Workers’ Comp.” According to the WCRI, the ACA promotes the growth of ACO’s, which will increasingly integrate care from all providers under one capitated payment. They will receive one fixed payment regardless of the treatment the patient receives.

This, they say, will provide strong incentives to classify injuries as workers’ comp cases where possible. To date, over 500 ACO’s have been formed since passage of the ACA.

Additionally, the Obama Administration’s proposed moving to “value-based” reimbursement systems for physicians under Medicare (see my post, “Challenges Remain in Physician Payment Reform”), is also cited in the study as another mechanism leading to case shifting.

The WCRI states that the exact definition of this system is unclear, but that it is widely understood that this would imply more prospective reimbursement.

They point to research that indicates that when Medicare changes its payment system, there is a significant price change among commercial insurers. This, too, could further induce shifting of certain cases, they report. (see “Shared Savings ACO Program reaps the most for Primary-care Physicians”)

What are the findings?

The WCRI looked at three groups of states. The first group was states where capitated plans were very common, the second group was states where capitated plans were somewhat common, and the third group was states where capitated plans were less common.

Case-shifting was only found in states where capitated plans were very common, and there was little case-shifting in the other two groups.

Case-shifting to workers’ comp, the study implies, will be expected to increase as capitation becomes more common.

Here are the key takeaways:

  • Patients covered by a capitated health plan was 11% more likely to have a soft tissue injury (back pain) called work-related than a patient covered by fee-for-service.
  • Patients with conditions for more certain causes (fractures, lacerations, contusions), there was no difference between patients covered by capitation or by fee-for-service; hence no case-shifting.
  • Case-shifting was more likely in states where a higher percentage of workers were covered by capitated plans. Two reasons for this are: more cases would be shifted if more patients were covered by such plans, and when these plans were more common, providers were more aware of the financial incentives to case-shift. In states where at least 22% of workers had capitated plans, the odds of a soft tissue injury being work-related was 31% higher than workers in fee-for-service.
  • In states where capitation was less common, there was no case-shifting. Providers were less aware of financial incentives when capitation was infrequent.

What does this mean?

This study confirms what I have been reporting on for much of the past half year, that the ACA may lead to more claims (or cases) shifted into workers’ comp, thus adding to the cost of medical care under workers’ comp, and further burdening an already burdened and broken system.

But it also confirms that there are rough times ahead for the industry, and that unless new ideas are brought forth and alternatives are seriously considered, and not outright dismissed just because someone say they should be dismissed, no matter how many years’ experience they have in workers’ comp, things will get worse.

The world is changing. Things once thought impossible are possible. Ideas once ridiculed are now accepted reality. No one can stop change, not by saying so, nor by any action on their part, so you might as well open your eyes, ears and minds to new ideas, and not shut them just because you don’t agree with them. One day soon, you will be gone, and the problems will still be there. The way forward is to embrace change now so that the future is better for all.

Clarification

Some of you may be thrown off by the title of this article as meaning that the study confirms that the ACA will lead to case-shifting. That is not what was meant. What was meant was that the study confirms what had been previously reported by others and that I had written about in the posts I referenced in my article. If there was any misconstruction on my part, I apologize.

Consolidation Rolls On In Work Comp

Consolidation was mentioned in the last post as one of the areas of concern over physician payment reform.

Yet, consolidation is also a concern in workers’ compensation, as Joe Paduda reports this morning.

Joe has been keeping tabs on all of the acquisitions occurring in the workers’ comp sphere for a very long time, and one of the main companies involved in these transactions has been Apax Partners, owners of One Call Care Management and GENEX Services.

GENEX has itself been bought or bought other companies in the past three years that I am aware of, thanks to Joe’s reporting.

Reuters, Joe says, reported that Apax is preparing a bid close to $2 billion for peer Helios. Helios is the product itself of a merger between Progressive Medical and PMSI, and is the largest workers’ comp Pharmacy Benefit Manager (PBM).

PMSI was bought by H.I.G. Capital some years back for about $40 million, Joe states, then purchased for probably 8-10 times that figure a couple years ago and merged with Progressive, and there are countless other companies in the work comp service sector that have gone through similar mergers, acquisitions, purchases, etc.

Given the consolidation in the health care sector with hospitals, insurers, and physician practices, especially the development of ACOs, the consolidation on the work comp will also lead to higher cost for services or cuts to services provided.

Competition was supposed to be a good thing in a capitalist society, but as we have seen before in many other industries, leveraged buyouts, mergers and acquisitions, and hostile takeovers have shrunk the competitive sphere, so that in these industries, only a handful of large corporations remain.

Banking, insurance, and financial services, especially Wall Street brokerage firms, have all been consolidated in one form or another, so that now, a company like Goldman Sachs dominates the market after the financial collapse of a few years ago.

Health care and work comp are no different. Perhaps one day, the world of “Rollerball” will become reality, and all companies will be combined into their own industries, headquartered in different cities around the world, as was in that groundbreaking film.

Who knew the highest form of capitalism was really monopoly?

Challenges Remain in Physician Payment Reform

Following up on my post yesterday about shared savings, John O’Shea writes today in the Health Affairs blog, that challenges remain with regard to physician payment reform, now that President Obama has signed the Medicare Access and CHIP Reauthorization Act (MACRA) in April.

MACRA repeals the Sustainable Growth Rate (SGR) mechanism of updating fees to the Physician Fee Schedule (PFS).

The SGR has been blamed for causing instability and uncertainty among physicians for over a decade, and that led to 17 overrides of scheduled fee cuts, at a cost of over $ 150 billion.

The passage of MACRA, O’Shea wrote, raises new questions about where the US health care system is headed in the post-SGR world of payment and delivery reform.

Yet, before MACRA was signed into law, HHS Secretary Burwell announced a major initiative calling for 30 % of Medicare payments to be value-based through the use of alternative payment models (APMs) by 2016, and 50% by 2018.

HHS also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016, and 90% by 2018.

O’Shea reported there are reasons for caution. These policy changes, following calls to move from the current volume-based, fee-for-service (FFS) system to a value-based system that pays for patient outcomes, rather than for individual services, present major challenges to achieving the goal of value-based health care, the goal of any real health reform initiative.

One of the APMs O’Shea discussed is Value-based purchasing (VBP), which is the concept behind APMs, includes a broad set of performance-based payment strategies that attempt to use financial incentives to influence provider performance, such as the Shared Savings Program mentioned yesterday.

Another APMs is the Merit-Based Incentive Payment System (MIPS) [don’t you just love how the government comes up with these abbreviations?], a modified FFS system, which is basically a Pay-for-Performance (P4P) program.

The overall early results of these initiatives, as well as possible flaws, make the long term viability of these models uncertain.

With regard to P4P programs, a 2014 RAND report looked at 49 studies examining the effect of P4P on process and intermediate outcome measures, and found that the overall results were mixed, and that any identified effects were relatively small.

According to the lead author of the study, Cheryl Damberg, “The evidence from the past decade is that pay for performance had modest effects on closing the quality gap.” A basic flaw in the model is the reality that meaningful patient-centered outcome measures remain elusive.

ACOs, as I wrote about yesterday, are another APM; and O’Shea reported that their ability to generate savings to share with participants is so far not encouraging. He points to early results from the Pioneer ACO program that determined that of the 23 ACOs that participated in 2013, only 11 earned any shared savings, which totaled about $41 million. Six ACOs lost a total of $25 million. The results from a similar study in 2014 showed improvement, but the long-term outlook is still unclear.

What is the impact on the practice of medicine?

What O’Shea found was that physicians currently labor under an increasingly burdensome and often meaningless number of reporting requirements that take time away from patients, and fail to help them improve quality of care.

Accordingly, a commentary O’Shea cited from the New England Journal of Medicine said that, “the quality-measurement enterprise in US health care is troubled.”

A recent CMS report, O’Shea mentioned, said that 40% of Medicare providers will face 1.5% cuts for failing to submit data to the Physician Quality Reporting System.

Because of this, many public and private payers are tying larger amounts of provider payments to a growing number of largely meaningless measures.

O’Shea said that there are two areas of concern, given the plethora of payment and delivery reform initiatives: the administrative burden on physicians, and the push towards greater consolidation.

Nearly half, or 46% of doctors who reported said that they felt burned out in 2014. A main reason cited by the physicians was the increasing administrative burden.

What does the mean?

Well, having slogged through an online Health Care Quality course as part of my MHA degree program, the myriad abbreviations mentioned in Mr. O’Shea’s article does not surprise me. CMS and HHS has for years developed all kinds of initiatives and programs to influence and alter behavior of all stakeholders in our health care system.

As “Uncle” Walter Cronkite once said, “America’s health care system is neither healthy, caring, nor a system.” And that was before the passage of the ACA.

But for the purposes of this blog, and in keeping with the point of the last article where it was said that what happens in health care affects workers’ comp. then I think you can agree that these initiatives and programs, while well-meaning, may make things worse in the future, but not because the idea behind the ACA or the law itself is bad, but because we Americans cannot do anything right until we try everything else, a la Winston Churchill.

If that is the case, then believing that by doing the same things over and over again, that by following everyone else off the cliff of unregulated, employer-based, multi-payer health care, and by not opening the workers’ comp system to real alternatives, especially for surgery, then nothing will ever change.

We will continue to see more new initiatives and programs from CMS, and the results will be dismal, and the impact on workers’ comp will be felt eventually. That is, unless you open up your minds to new ways of thinking.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.