Category Archives: Medical Provider Networks

Follow-up to Employee/Employer Choice: Three Years Later

Not that long ago, Michael Grabell of ProPublica, and Howard Berkes of NPR, published a report called “The Demolition of Workers’ Compensation”.

There was much industry condemnation about the report, and my fellow blogger, Joe Paduda, tried to set the record straight, but got nowhere.

I managed to write to Michael and corrected him on the issue of choice of treating physician, which I covered in these two articles: “Employee vs Employer Choice of Physician: How best to Incorporate Medical Tourism into Workers’ Compensation” and “Employee vs. Employer Choice of Physician Revisited: Additional Commentary on How Best to Incorporate Medical Tourism into Workers’ Compensation“.

I sent Michael all of my research and I think he was convinced that employees had more choice, it was just a matter of what options they had, given each state’s workers’ comp laws.

One of the sources I used back then, and today was a joint publication between the WCRI and the IAIABC,”Workers’ Compensation Laws As of January 1, 2016”, which can be purchased here.

Here is my version of their Table 3:

pic10

Notes: * Employee may seek reasonable care on his or her own at employer’s expense
** Can allow worker to select then other party may choose to direct it for next 60 days
*** Employee for non-network claims, any willing provider; network claims, from list by network
**** Employer may have on-site medical provider that employees must see first, then employee can select

But as you will notice, the far left column has the most number of states where the employees can choose their treating physicians, although some do have certain circumstances where the employer has the choice, or there are conditions that must be met.

Relying on the US Chamber of Commerce, as Michael told me he did, does not get you the right data. Using the statutes and laws themselves is the only way to know what is permitted and what is not permitted. And the employee for the most part, does have a say in his or her care.


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

Share this article, or leave a comment below.

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.

Employers Facing Double-Digit Premium Hikes

Now that the summer is almost at an end, time to get back to the topic at hand…health care.

In an article late last week, Kathryn Mayer, Managing Editor of Benefits Selling magazine, wrote that nine in 10 employers said that they are facing increases in the premiums they pay for employee health plans.

Nearly 25%, or 1 in 4 employers are seeing rate increases in double-digits, according to research released last Thursday by Arthur J. Gallagher & Co.

Gallagher surveyed more than 3,000 US employers from dozens of industries around the country.

According to James Durkin, president of Gallagher Benefit Services, Inc.:

“Employers are examining all available options to rein in medical costs, while still offering competitive benefits packages that help them attract and retain the best employees in a tightening labor market, With the Cadillac tax due to take effect in 2018, employers are expected to turn to newer, alternative cost-control tactics.”

Employers are increasingly requiring employees to shoulder a larger share of the expense in higher deductibles, and Gallagher reported that 67% are cost-shifting [emphasis added] to employees.

Gallagher also said that in-network family plan deductibles average $3,000, while out-of-network deductibles average $4,500.

Annual deductibles for employee-only, in-network plans now average $1,200, and out-of-network deductibles are an average of $2,000.

About half of employers said they are considering changing carriers to lower costs.

Lastly, nearly all employers (97%), said they will continue to provide employer-sponsored coverage to employees.

Some of the other things Gallagher’s report said was that employers would offer health savings accounts to employees (36%), implement mandatory generic drug policies (15%), and offer reduced network access or narrow provider networks (11%). 35 % may self-insure, while 13 % might offer narrower networks in the next three years.

So, what does this mean to you?

If employers cost-shift the premium hikes to their employees, many of them might do the same, and cost-shift health care to workers’ comp, which has been discussed many times in the past.

One way Gallagher did not mention that employers should try, and why should they, because they can’t think outside of the box, is have them think outside of the border, and consider medical travel for surgery and certain medical treatments and procedures too expensive in the US, and especially if the employees cost-shift to workers’ comp.

———————————————————————————————————————————–

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.

Change for Change’s Sake: What Real Change in Workers’ Comp Looks Like

Note: This is my 200th post, so I think you will find it to be one of the best articles I have written so far.

Every industry has its share of conferences, conventions and meetings around the country. The insurance and risk management industries, which includes the workers’ comp industry, is no exception.

In the early stage of my career, I worked for a small, retail insurance broker on New York’s Long Island, and the men in my company would attend the Risk and Insurance Management Society (RIMS) Conference every year.

I am sure they went there to learn about things other brokers were doing, make connections with insurance company executives, and workers’ comp service providers. But typically, these conferences allowed the participants to hang out with their buddies at the bar, and play a round or two of golf.

So I was mildly amused when I read an article posted today in The Workers’ Compensation Daily from Safety National Insurance Company, titled “It’s Time to Change Workers’ Compensation”.

The article discussed a recent meeting of the Harbor Health Systems 2015 MPN (Medical Provider Networks) Medical Directors, in which an executive from Sedgwick gave the keynote address. His address discussed the need for change in the approach to workers’ comp claims handling.

Harbor Health Systems is based in California, and through the writings of my fellow blogger, David De Paolo, and the personal experiences of two women I previously wrote about, “Ms. X” and “Ms. A”, the California workers’ comp system could use more than a keynote address to change the problems and abuses injured workers are receiving in that state.

FYI, Harbor Health Systems is a subsidiary of One Call Care Management, a company that for the past two years or so has been gobbling up smaller companies, especially in the pharmacy benefit management arena, as well as other smaller workers’ compensation service providers, and as Joe Paduda reported earlier this week, One Call Care Management has acquired an imaging company called MedFocus.

According to Joe, this acquisition consolidates One Call’s stranglehold on the market, so if this is the kind of change Mr. North of Sedgwick was referring to, then it is more of the same.

The article goes on to say that the role of a medical director is to be there to help injured workers to recover from their injuries and resume their lives. I believe “Ms. X” and “Ms. A” would beg to differ.

The article also goes on to say that for years, the workers’ comp medical networks have focused on two things: discount and proximity. They would send injured workers to the physician closest to the employer’s location who would agree to accept a discount on the treatment provided.

Over time, they realized this approach was flawed, and that they should identify the medical providers who produce the best outcomes and incentivize them to treat injured workers by compensating them fairly.

They are learning that when they find these superior physicians, they need to get out of their way and let them practice medicine. The rest of the article details how the industry needs to evolve in how they devote resources to claims, how to better explain the workers’ comp system and protections it provides, and to avail themselves of the opportunities the ACA provides to evolve the way medical care is delivered.

According to Mr. North, when it comes to change, there are three main categories of people:

  • Innovators – people who are truly creating change
  • Learners – people who take what innovators created and work to evolve it
  • Ignorers – people who are uncomfortable with change and have a tendency to ignore it as long as possible

He said that workers’ comp cannot evolve if they are unwilling to take risks and become innovators; otherwise change will not happen.

I agree with his analysis, and my posts have attested to that fact time and time again. Therefore using his categories, it is clear that I would be considered an innovator, since I have been advocating implementing medical travel into workers’ comp.

Workers’ comp needs to take risks, and medical travel affords them of one of those risks.

Yet, those who have derided my idea, or who have not paid any attention to what I am saying, are ignorers, and there may even be people who would see to it that medical travel never becomes part of workers’ comp.

So I would like to add a fourth category to this list. Call them defenders of the status quo, or preventers, or even saboteurs, if it ever got that far.

So what is this change Mr. North is talking about? Is it real change, or just change for the sake of change? And what does real change look like?

Real change is not keeping injured workers and the system locked in a padded cell, wrapped in a straitjacket.

Real change is not buying up smaller companies and cornering the market, so that the very idea of competition is tossed on the dustbin of history.

Real change is not doing the same things over and over again and expecting different results.

Real change is not being afraid to look outside of one’s comfort zone, and outside of one’s national borders at a time when your industry is facing challenges from the expansion of out-out legislation that threatens to destroy workers’ comp, rising medical costs, physician shortages, questions of the constitutionality of exclusive remedy, negative media reports, changes in technology and diversification, and other “seismic shifts”.

Real change is becoming a learner, and I am looking for learners to work with. Real change is being fearless and recognizing that Americans are not the only ones who are able to provide quality medical care.

Real change is going with the flow of change in the world today and joining the globalized world; otherwise you stagnate and die. Time is running out. Real change is possible, but you must go after it.

——————————————————————————————————————————-

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.

STOP THE MADNESS!!!

As this is my official 150th post, I thought that the following post from David De Paolo needs to be seen by everyone who cares about the direction the US is headed, the way the global economy is headed, and what is happening to the working class in the US, especially injured workers such as Glenn Johnson, Cecilia Watt, Linda Ayres, and many others.

We have been lulled to sleep by a slick talking former Hollywood actor (a third rate one, and second rate president), his media and political consultants, a kinder, gentler grandfather figure with two dummy ex-governor sons, their media and political consultants, talk radio pundits who abuse and insult those they do not like, and a conservative movement funded by the late Richard Mellon Scaife, the Koch Brothers, Art Pope, Rupert Murdoch, and many others, to take this country back more than one hundred years when workers had no rights and bosses were like gods.

David’s excellent post should make us all pause to consider what we are doing to our fellow Americans and be angry, for unless you are a millionaire or billionaire, you too can experience the same or similar circumstances these people have gone through, and worse.

To paraphrase Marx (that’s Karl, not Groucho), “Worker’s of the World, Unite! You have nothing to lose but your lives!”

https://www.linkedin.com/pulse/option-necrosis-david-depaolo?trk=hb_ntf_MEGAPHONE_ARTICLE_POST

If you are as angry and disturbed over this blatant disregard for the dignity of working people, and are tired of the “system” being run for the benefit of the insurers and those who benefit financially, then contact me for more information on how we can offer injured workers better medical care that actually saves money, and does not allow profiteers to abuse people.

Demand for Bundling of Workers’ Comp and Health Insurance Increases

An article last Wednesday in Healthcare Finance News, by Anthony Brino, a Contributing Editor to Healthcare Finance News and the Editor of Healthcare Payer News, said that demand is increasing for the bundling of workers’ compensation and health insurance.

According to Brino, as more employers are seeking to integrate workers’ comp into their benefit packages, a range of market trends and regulations may be responsible for slowing what could be a natural fit.

However, according to Derek Jones, an actuary with Milliman, more Americans getting insurance should actually mean a healthier workforce, and therefore fewer workers’ comp claims. Jones said that what is more significant is the potential shift of costs between the workers’ comp and health insurance markets.

The article states that the new expanded availability of health insurance could shift payments for injuries and illness otherwise covered by work comp to health plans. Yet, as Jones is quoted in the article, “To the extent any of these claims are larger, there may be a significant cost shift from workers’ compensation to healthcare”.

Brino then says that treatments typically covered by health plans may end up being covered by workers’ comp. This development has not gone unnoticed by members of the workers’ comp industry in the run-up to the passage and subsequent enactment of the Affordable Care Act (ACA). Many of them have predicted cost shifting will occur from health care to workers’ comp.

While finishing my MHA degree in 2011, I took an elective course on the PPACA, and the term paper I wrote for this course concerned the impact of the ACA on workers’ compensation. I found at the time that there were three types of impacts in the literature of the time. The first was Direct, the second was Indirect, and the third was Speculative.

While I did not specifically address the issue of cost shifting, I would have to classify this as a speculative impact, as we shall see, and as Brino’s article mentions.

And according to Steve Kokulak, a senior vice president of workers’ compensation and no-fault insurance at MagnaCare, and a long-time connection of mine on LinkedIn, “You’re going to see changes in both directions, and it’s probably too early to tell at this point.”

A bigger issue, Kokulak states, is the fact that more employers would like to have their workers’ comp, health and disability insurance benefits more integrated. Kokulak also stated that MagnaCare has seen an interest from both employers and their health plans “for a total product combining health, workers’ comp and disability.”

A major barrier to offering an integrated product, according to Brino, is not that large insurers need to acquire workers’ comp companies, but that the patchwork quilt of state laws that in many places prevent the use of narrow provider networks.

This has been a part and parcel of not only my White Paper, but of my entire blogging experience to date. I said so in my blog article, Of ‘Aged Statutes and Old Case Law’ — Why Workers’ Comp Must Change and in my article, Statutes are not Statues ― Why Workers’ Comp Must Open up and Be Flexible.

Many states, Brino writes, regulate whether carriers and employers can offer direct care for injured workers and have mandated workers’ comp fee schedules. Yet, the “biggest impediment” to the kind of integrated insurance some employers are seeking is “a matter of bringing a product to the marketplace and making sure it’s compliant with state workers’ compensation rules.”

Or better yet, state workers’ comp rules need to be brought into the 21st century, and not bound by what transpired last century. There also needs to be a release of the stranglehold that lawyers, doctors, and workers’ comp services providers have on the workers’ comp system, another point I have raised time and again in my articles.

Kokulak said that it might be possible to move this piece of the group market in Oklahoma and Texas, which have let employers opt-out of state-workers’ compensation programs, as well as 10 other states that allow dispute resolutions with unions as an alternative to state workers’ compensation programs.

It would be far more simple, Kokulak said, for self-insured employers, such as municipalities, large corporations and union-based employers. “It is just a matter of creating a program that would be legally compliant, and finding service partners, the TPAs and PPO networks,” Kokulak went on to say.

Finally, an open question for integrating health, disability and workers’ compensation, Kokulak said, is whether health plans are open to covering possible cost-shifting. “Will a health carrier be willing to absolve the cost of the additional two to five percent in claims, and how much would they raise the premiums?”

I am confident that some way or another, injured workers will be able to get medical care abroad through the medical tourism industry, if their employers, their insurance carriers, and others make it possible for them to do so. The naysayers who have attacked my idea as “ridiculous and a non-starter” have not been vindicated by Brino’s article. Rather, it is I who have been vindicated here, as some of the things he mentions, I have already discussed in past articles, and most specifically, rather strongly.

No one knows what the future of health care, let alone health insurance will look like, or where some people will get their medical care. There may be, like the current marketplace, many options out there, medical tourism being one of them. And if integration in some form is achieved, medical tourism would stand to gain significantly from that integration, and it will not matter how the payment is made, as long as the patient gets the best care possible at the lowest cost possible.

The only other impediment is what is between most people’s ears. My advice to them after reading this article is this: Be careful for what you DON’T wish for, you just might get that instead.

Legal Barriers to Implementing International Providers into Medical Provider Networks for Workers’ Compensation: A White Paper

Acknowledgment

This white paper would not have been possible without the inspiration, enthusiasm, encouragement, and guidance of Kristen E.B. Montez, Esq., the Director of Legal and Regulatory Services of Satori World Medical in San Diego, CA. It was Kristen who answered my call on LinkedIn.com for assistance with a topic to write for my Health Law class. Her knowledge and experience in the area of medical tourism as a published writer on the subject was not only very valuable, but also very much appreciated. Her desire to assist me in writing it, and in suggesting that I get it published, is something that I did not expect, nor imagined when I placed the online posting. She is a remarkable individual, and it is my pleasure to have connected and collaborated with her on this project. My thanks to her for putting up with my initial reservations, and my rather wordy writing style.