Category Archives: Employee Benefits

ARAWC Strikes Again: Opt-out Rolls On

“Just when I thought I was out… they pull me back in.”

Michael Corleone, Godfather, Part III

Source: https://www.pinterest.com/Mamzeltt/famous-movie-quotes/

When Michael confronts Connie and Neri in the kitchen of his townhouse, he warns them to never give an order to kill someone again (in this case, it was Joey Zaza), and goes on to state that when he thought he had left the mob lifestyle, they pull him back.

Thus, is the case with opt-out, as I discussed in my last post on the subject.

Kristen Beckman, in today’s Business Insurance, reminds us that opt-out, like the Mob, is pulling us back into the conversation.

As I reported last time, a bill in Arkansas, Senate Bill 653, pending in that state’s legislature’s Insurance & Commerce Committee since the beginning of March, proposes an alternative to the state system.

Ms. Beckman quotes Fred C. Bosse (not Fred C. Dobbs), the southwest region vice president of the American Insurance Association (AIA), who said that the bill is an attempt to keep the workers comp opt-out conversation going.

Mr. Bosse said that the AIA takes these bills seriously (good for them) and engages legislators to dissuade progress of such legislation the AIA believes could create an unequal benefit system for employees. (They haven’t drunk the Kool-Aid either)

Arkansas’ bill is the only legislation currently under consideration, but a state Rep in Florida, Cord Byrd (there’s a name for you), a Republican (it figures) from Jacksonville Beach, promoted legislation last year, but never filed it.

South Carolina and Tennessee, where bills were previously introduced within the past two years has gone nowhere.

And once again ARAWC rears its ugly head. For those of you unfamiliar with ARAWC, or the Association for Responsible Alternatives to Workers’ Compensation, it is a right-wing lobbying and legislation writing group based in Reston, Virginia. (see several other posts on ARAWC on this blog)

A statement ARAWC sent to BI said that these bills are beginning to pop up organically to model benefits that companies have seen from Texas’ non-subscription model. (Organically? That’s like saying mushroom clouds organically popped up over Hiroshima and Nagasaki)

Here’s a laugh for you, straight from the ARAWC statement:

Outcomes and benefits for injured workers have improved, employers are more competitive when costs are contained and taxpayers are well served by market-driven solutions,” They further said, “We recognize that each state is different and that the discussions at the state level will involve varied opinions.”

Of course, we cannot really know if injured workers are benefitting, or just being denied their rights, and it seems that opt-out is only to help employers and taxpayers get out of their responsibility to those who sustain serious injuries while employed.

In another post, the notion that Texas’ system could serve as a model for other states was outlined in a report by the Texas Public Policy Foundation (don’t you just love the names of these reactionary groups?)

Bill Minick, president of PartnerSource, praised the report, according to Ms. Beckman, and said that competition has driven down insurance premium rates and improved benefits for Texas workers. (That’s what he says, but is any of it true, I wonder? I doubt it.)

ARAWC has listed a laundry list of benefits they say responsible alternative comp laws could provide:

  • Better wage replacement
  • Reduced overall employer costs
  • Faster return to work
  • Fewer claims disputes (yeah, because they would be denied)
  • Faster claim payouts
  • Faster closure (well, when you deny claims, they can be closed faster, duh!)

It is good to know that the AIA is critical of the report, and that in their opinion, it is unworkable to allow employers to adopt a separate, but unequal system of employee benefits.

And as we have seen with the defeat of the AHCA, leaving a government-sponsored program up to market-driven forces is a recipe for disaster that should not be repeated in workers’ comp, no matter what flavor the Kool-Aid comes in.

Interesting Article on PPO’s

Forbes.com has published an extensive article claiming that PPO’s have perpetrated a great heist [author’s words] on the American middle class.

According to the article,  trillions has been redistributed from the American workforce to the healthcare industry, creating an economic depression for the middle class.

The article consists of an interview conducted by author Dave Chase and Mike Dendy, Vice Chairman and CEO of Advanced Medical Pricing Solutions, Inc., a healthcare cost management company.

Here is the link to the full article:

http://www.forbes.com/sites/davechase/2016/09/05/have-ppo-networks-perpetrated-the-greatest-heist-in-american-history/#25489cd66d00

Is it any wonder why work comp is also so screwed up? Too many cooks (or is that crooks?) taking their “cut” out of the middle class.

But we keep insisting that we have the best health care system in the world, that our workers get the best care when they are injured and don’t need to have any alternatives explored to improve the care and treatment they get, and that the free market is the best way to provide health care. It’s free alright. Free for the greedy to become more greedy. But not for you and me.

Self-Insured Employers Fail To Adopt Medical Travel

When I began my writing, one of the ways I saw medical travel could be implemented into workers’ comp was through employers who self-insure.

There are not that many companies who do self-insure for several reasons, one of which is the administrative costs and extra hoops they would have to go through just to get approval from state regulators to be self-insured. This is something most small employers will not do. More on what I think about this later.

Today, Irving Stackpole, President of Stackpole & Associates (a LinkedIn connection of mine), wrote an article in the International Medical Tourism Journal (IMTJ) about why US employers have failed to adopt medical travel benefits.

For the sake of transparency and honesty, I have never met Irving, but have had discussions with him a few times on LinkedIn in some of the groups we have in common. I have met his co-host of his radio show, Elizabeth Ziemba, when we both attended the 5th Medical Tourism and Wellness Business Summit in Reynosa, Mexico in November 2014.

In his article, Irving mentions that while some small employers such as HSM (who I have written about in earlier posts), Hannaford Supermarkets, the Casino and Hotel of the Blue Lake Rancheria Tribe in Northern California, and IDMI Systems have added medical travel to their health plans, he does not know of any large employers who have.

When I attended the 5th World Medical Tourism & Global Healthcare Congress in 2012, large employers such as Disney Institute, American Express, and Google sent representatives to speak at the Congress. If they attended, then surely their companies must be involved in some degree with medical travel? What did they discuss? Certainly not the weather (Hurricane Sandy was right outside the hotel).

But I digress, yet again.

According to Irving, six percent of firms offering fully-insured plans reported that they intend to self-insure because of the ACA. So, he is correct in that not many companies are self-insured.

However, Irving also states that it is estimated that the average self-funded plan covers between 300-400 employees, and that 59% of them in the US self-fund as part of their health plan.

And he goes on to say that many small companies are looking to self-fund to reduce their share of the cost burden, but that because small employers are not able to assume the same risk levels, stop loss rates are rising. This pressure, he adds will serve as a limitation on the expansion of self-funded health insurance into the smaller market.

Irving concludes that there are four reason why large self-insured companies would add an additional medical travel benefit to their insurance plans:

  • Current implementation of the ACA has distracted or absorbed attention of insurance markets, including self-insured companies. Many companies are wrestling with far issues of how many employees will be included/excluded, potential penalties, and avoiding fines under the ACA;
  • Self-insured plans are exempt from many of the more costly and burdensome requirements of the ACA as long as they don’t make significant changes, therefore they are careful about keeping their plans unchanged;
  • Reinsurance, or stop loss coverage may be limited for plans offering a medical travel benefit, and;
  • There is no history of outcomes , evidence or actuarial models to support the case among employers for a disruptive change such as international medical travel. Reports suggesting cost savings and quality outcomes are not yet supported by evidence.

One other factor Irving suggests as to why many employers have avoided medical travel is because many find it necessary to contract with a third party administrator (TPA) to collect premiums, manage membership enrollment, claims adjudication and payment. These TPA’s are sometimes referred to as providing “Administrative Services Only” contracts or “ASO” contracts, where they provide typical third party administration services, but assume no risk for claims payment.

Because of these contracts, Irving says that while economic logic suggests that self-funded employers should be interested in high quality, lower cost destinations, it is necessary to convince both the benefits manager and the TPA/ASO  of the value of being a destination provider, and the low risk associated with accessing international medical travel.

Okay, now it’s my turn.

“Impossible is just a big word thrown around by small men who find it easier to live in the world they’ve been given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion. Impossible is not a declaration. It’s a dare. Impossible is potential. Impossible is temporary. Impossible is nothing.”

Muhammad Ali

While everything Irving wrote about appears to be factually true at the moment, and I cannot dispute what he says, the fact that employers have been unwilling to pursue medical travel is more complicated than the reasons he gives above.

True, the ACA has many things in it that may or may not seriously impact health care and the health insurance industry, but what he does not mention is that many of the things holding employers back pre-date the enactment of the ACA, and are more concerned with keeping health care the purview of those along the supply chain who profit the most from the system we have created, and not concerned with providing people either under health insurance or workers’ comp, with the best medical care possible, at the lowest cost, no matter where it comes from.

TPA’s and ASO’s and ERISA, and many other mechanisms such as stop loss insurance, and risk avoidance, etc., are mere barriers to the implementation of medical travel into both health care and workers’ comp.

Using my oft-time quoted analogy of going to the Moon, imagine if the baby steps we took to get there such as the Mercury, Gemini and early Apollo programs were not baby steps to the Moon, but actually barriers set up so that we are thwarted every step of the way to getting there or to go even further, such as landing humans on Mars. Don’t you think there would be people just like Irving who would say that it cannot happen?

That is why I quoted the late Muhammad Ali. For a poor black kid from Louisville, he sure had a better understanding of what can be than most folks who did not grow up like he did.

But this does not let the medical travel industry off the hook. I said so in my post, “Ensuring Patient Safety: Making Sure Medical Tourism Puts Its Money Where Its Mouth Is“.

But it is not just the industry itself that needs to come clean. Foreign governments and their travel ministries, the medical travel facilities, the providers, and the facilitators must present hard evidence that better quality and lower cost is possible, and so that when some of the dire predictions of the impact of the ACA are fully realized, or the US health care system collapses of its own weight (see my post, “Colorado “Single Payer” in Health Care Industry’s Sights“), medical travel as an alternative will become more acceptable to US employers, large and small, and not just for health care, but for workers’ comp as well.


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.

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

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

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.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Comp Blog is now viewed all over the world in over 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

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RESISTANCE IS FUTILE!: What is the reason behind Medical Tourism’s Rejection?

My friend, Maria Todd, PhD, noted International Expert on Healthcare & Health Tourism Business Strategies & Operations, Business Owner, Author, and Speaker, has written a very cogent and to the point article challenging American hospitals on why they eschew inbound medical tourism.

For the uninitiated, inbound medical tourism, or travel, refers to foreign patients traveling to the US or other countries for medical care from their home country.

A case in point was the late, and not lamented, Shah of Iran who was allowed to come to the US for treatment of his cancer, and which led to the taking hostage of our embassy staff, destroying what was left of one presidential administration, and secretly aiding another to win the election, and thus look good in the eyes of the American people, only some time later to that administration selling arms to Iran for other hostages, the cash then used to support the Contras in Nicaragua.

But I digress.

As the Shah had money, he was welcomed with open arms, but Maria wonders why other American hospitals, knowing that they will receive cash, still refuses to seek out inbound medical tourism as an alternative source of revenue.

According to Dr. Todd, “It is estimated that the USA is the 3rd most popular destination for inbound medical tourism from other countries, but the practice of traveling for health has been a “thing” in the USA for more than 100 years.

Corporations such as Pepsico, Lowe’s Home Improvement, Boeing, WalMart and many other corporations, she writes, with self-funded health plans under ERISA, have the freedom to contract with any hospital, anywhere in the world without going through a managed care network, but can’t because the hospitals with lots of value to offer simply don’t seem interested enough to talk to them.

She wants to know why not? In order for her to find the answer to that and other questions, she is asking her colleagues in healthcare business development and business administration who are executives at leading healthcare institutions and well-equipped ASCs across America: “Why do you eschew medical tourism business?

This question, and the others that she poses in her article, also relate to outbound medical tourism as well.

Why do employers, insurance companies, the domestic health care industry, which is beset by so many problems and potential shortages and inefficiencies, as well as the entire workers’ compensation industry eschew medical travel for non-work-related illnesses and diseases, and work-related injuries requiring surgery?

I’ve written about this many times before. I have cited American Exceptionalism, racism, xenophobia, greed, ignorance of the quality of medical care abroad, and many other factors, but as Maria points out for US hospitals turning down cash patients, employers and carriers can save money by looking outside our broken and dysfunctional medical care system under workers’ comp.

It’s high time the US joins the rest of the world, and allows our citizens the freedom to go wherever they want for medical care, no matter what the cause, or condition that prompts them to seek medical care that is high quality, and will save money for their employer, and provide them an opportunity to see the world that also belongs to them.

Not to do so is tantamount to enslavement to a corrupt and rigged system that benefits unscrupulous physicians, pharmacies, pain management centers, and other workers’ comp service providers, and harms injured workers.

Medical travel will happen. Resist at your peril.

Opt-Out A Boon to Employers, Not So Injured Workers

Employers opting out of workers’ comp in Texas are reducing costs, but more study is needed on how non-subscription affects injured workers, according to Stephanie Goldberg of Business Insurance.

Ms. Goldberg reports that a study released last week by Alison D. Morantz of Stanford Law School, found that the overall cost per claim is about 49% lower in the non-subscription environment, which is largely due to declines in medical and wage replacement costs.

The study also found, she writes, that despite no significant decline in frequency of claims, that more serious claims involving replacement of lost wages are about 33% less common among non-subscribing employers.

For the study, Ms. Goldberg adds, Ms. Morantz recruited 15 large multistate companies that operate homogenous facilities nationwide, and compared outcomes in traditional workers’ comp versus opt-out for each company from 1998 to 2010.

The study found also that the frequency of nontraumatic injuries declined about 47% with opt-out coverage.

It could be that nonsubscribers are better at screening out nontraumatic claims under one of the many exclusions that private plans typically contain,” said Ms. Morantz.

Meanwhile, Ms. Goldberg wrote, a nontraumatic injury that is covered may be denied if it is not reported by the end of the employee’s shift, or within 24 hours.

Thirteen of the fifteen employers in the study have “good cause” provisions that allow a claims administrator to determine if there was a good reason the claim was made late.

Finally, Ms. Morantz said that, “the biggest unanswered question is how these plans affect the welfare of workers.

As I reported yesterday in two posts, “Texas State House Seeks to Change Rules for Workers’ Comp” and “Workers’ Comp Opt-Out Goes Under US Microscope“, there are a lot of unanswered questions surrounding the effect opt-out will have on the injured worker.

Those who support opt-out expansion really don’t care about injured workers; they care about saving money for employers (i.e., profits that go back to the investors or to the top executives). They are also diametrically opposed to giving workers any benefits, and would prefer that workers’ comp had never existed, along with unemployment insurance and health insurance.

Those who see through the smoke and mirrors of opt-out know what the world was like before workers’ comp laws, and they don’t want to go back to those days, and whether or not they really are concerned with the welfare of workers, or just say they do, I am afraid that they may not be able to stop this move on the part of opt-out proponents.

But federal oversight would be welcomed to prevent going back to the bad old days before Triangle, which happened 105 years ago tomorrow. Marty McFly went back to the future, these guys in opt-out want to go back to the past.

 

 

Workers’ Comp Opt-Out Goes Under US Microscope

Laws that allow employers in Texas and Oklahoma to opt out of the states’ workers comp systems could be subject to federal oversight, according to an article today in Business Insurance.com,  amid concerns about their effect on injured workers’ access to benefits and care and potential discrimination against employees who report workplace injuries and illnesses.

The article by Gloria Gonzalez, stated that last October, several Congressmen  wrote to the U.S. Department of Labor asking for a report on how it would re-institute oversight of state workers comp systems.

The department annually tracked states’ compliance with recommended federal standards from 1972 to 2004, following an investigation by ProPublica Inc. and National Public Radio into state workers comp programs, the article reported. (Both ProPublica and NPR reports were previously cited by myself and others in earlier posts)

Ms. Gonzalez wrote that the letter also asked whether the department needed additional authority to protect injured workers’ rights and prevent cost shifting to taxpayers via programs such as Social Security.

Chris Mandel, senior vice president of strategic solutions at Sedgwick Claims Management Services Inc. in Nashville, was quoted as asking, “Is that a prelude to federalization?”

His question came Tuesday at the Business Insurance Rick Management Summit, and his reply to his own question was, “Who knows?  But let’s just say they’re not happy with what they see.”

What does this mean to you?

It means Uncle Sam is watching, and he does not like what he sees going on with the expansion of opt-out legislation. Some of us already don’t like it and have not drunk the kool-aid just yet.

Let’s hope for the sake of injured workers that the feds do take a look under the microscope at the promises of opt-out and they find bacteria that can bring down the entire system, leaving injured workers where their great-grandfathers were before workers’ comp existed…out in the cold and out of luck if they got hurt.

WCRI: Day One, Part Three: The 2nd Opt-Out Session

Bruce Wood, of the American Insurance Association, led off the second Opt-Out session by reminding participants that the 1972 National Commission “considered and rejected employer or employee…

Source: WCRI: Day One, Part Three: The 2nd Opt-Out Session

No one should drink the kool-aid on this idea just yet.