Category Archives: Reimbursement

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.

 

A Simple Friday Morning Health Care Philippic – (With Apologies to Simon & Garfunkle)

Health Affairs blog today posted an article about the new rules CMS released on Wednesday that would establish key parameters for the new Quality Payment Program, a framework that includes the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). These policies were established by the latest, permanent ‘doc fix,’ the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

My writing this morning is not about the proposed rule, the Quality Payment Program, the Merit-based Incentive Payment System (MIPS), or the Alternative Payment Models (APM’s).

But rather, it is about something I first encountered during my first MHA class on Health Care Quality. Reading the assigned readings in the one textbook we were given, I noticed that throughout the last several decades, CMS has released and created many rules, programs, models, and whatnot, that made my head spin. No doubt that is what the good folks at CMS intended, because these rules, programs, models, schemes and “solutions” have only seemed to make the American health care system more complex, confusing, bureaucratic, wasteful, idiotic, and expensive.

When supporters of the current challenger in the Democratic Party presidential primaries say that their candidate will give them free health care, do they really understand and realize how much of a house of cards the entire system is, and one that will collapse if given enough time?

How so, you ask? Well, if you know of any other human-devised system that is so top-heavy, so convoluted, and so complex that the sheer weight of its rules, regulations, laws, programs and models will cause it to collapse, let me know, because the US health care system is the only one I see.

What those who advocate Medicare for All don’t realize (I am one too, but I realize what is at stake), is that even with all of this complexity, people are profiting from the ever continuing releasing of proposed rules, programs and models, and that to simply do away with them is equally as bad as letting it collapse, but at least when it does collapse, we can start all over again and provide the single payer system they want.

Yet, if we scrape it now, those who just got health coverage will lose it, those who never had it will never be able to afford it, and the entities that profit from it will work day and night to prevent the scraping of their “golden goose”.

I don’t have all the answers, but I know this, too many rules, programs, incentives, models, schemes, etc, etc, and so forth, only makes things worse, not better. I don’t remember learning about other nations’ health care systems being so top-heavy and so complex, and maybe, in the final analysis, is why their systems work, and ours does not.

When an American citizen goes abroad and needs medical care in a country such as France (I read one person’s account of what they experienced), the bill they received after treatment was only a few dollars, not hundreds or thousands. Why is that? Maybe because they don’t have a CMS screwing it up.

Maybe it’s because their doctors don’t wave expensive watches in the faces of their patients, or describe their recent safaris where they shot some endangered species in Africa because they were wealthy and believe they have the right to do so, as a Midwestern dentist did last year to a prized lion.

I also remember that during the run-up to the enactment of the ACA, many senior citizens demanded that the government keep its hands off of their Medicaid, and that they did not want some government bureaucrat to make health care decisions for them and their families. Who do they think makes these decisions in health insurance companies? Do they know any corporate “bureaucrats”, or do they think that because they work for a private company, that they are not part of a bureaucracy?

I’ll end this philippic here, but it makes me wonder why we haven’t gotten wise to the fact that too many cooks, too many rules, etc., only make things worse, not better. We need to wake up and join the rest of the industrialized world.


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.

“Florida, We Have a Problem”

Tuesday, Judge David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings, wrote a rather lengthy post about the differences between cost-shifting and case-shifting in workers’ comp.

Much of what the Judge wrote were subjects that I already discussed in a number of previous posts about cost-shifting and case-shifting, so I won’t go into it here. I am only focusing on the parts that relate to Florida workers’ comp. You can read the entire article yourselves.

But what caught my attention was what he said about Florida and what the Workers’ Compensation Research Institute (WCRI) reported in some of their studies on these issues.

As Judge Langham wrote this week, he wrote a post two years ago that asked the question “Why Does Surgery Cost Double in Workers’ Compensation?”

Judge Langham noted in that post that Florida employers have been documented paying almost double for shoulder or knee surgery that is paid for under workers’ compensation, compared to group health costs.

The implication of case-shifting in Florida, he says, could arguably be a doubling of cost.

He cited a WCRI report released earlier this year that suggests however that case-shifting is perhaps not as likely in Florida.

According to the report, Judge Langham continues, “as of July 2011, six states had workers’ comp medical fee schedules with rates within 15% of Medicare rates. They were California, Massachusetts, Florida, North Carolina, New York and Hawaii.”

However, Judge Langham pointed out that the WCRI concluded that case-shifting is more likely in states where the workers’ compensation fee schedule is 20% or more above the group health rates, and not in Florida.

Judge Langham stated that this analysis of workers’ compensation fee schedules does not appear to include analysis of the reimbursement rates for hospitals, and that It also seems contradictory to the assertions that Florida workers’ compensation costs for various surgeries have been documented as roughly double the group health rates (100% higher, not 15% higher).

Injured workers who missed work in the Florida workers’ compensation system could be compensated in 2016 at a rate as high as $862.51 per week, the “maximum compensation rate.”

So, if recovery from such a “soft-tissue” injury required ten weeks off-work, he wrote, the case-shifting to workers’ compensation might add another four to nine thousand dollars to the already doubled cost of surgical repair under workers’ compensation.

This could be directly borne by the employer if the employer is self-insured for workers’ compensation; or, if the employer has purchased workers’ compensation insurance, the effect on the employer would be indirect in the form of potentially increased premium costs for workers’ compensation following such events and payments, Judge Langham states.

According to WCRI, the Judge quotes, “policymakers have always focused on the impact (workers’ compensation) fee schedules have on access to care as well as utilization of services.

This has been a two-part analysis, he says:

First, fee schedules have to be sufficient such that physicians are willing to provide care in the workers’ compensation system; and second, the reimbursement cannot be too high, or perhaps overutilization is encouraged.

Lastly, Judge Langham points out that the disparity between costs has also been noted in discussions of “medical tourism.”

The last question he posits is this, “might medical decision makers direct care to more efficient providers, across town, across state lines?”

What about national borders?


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.

Fee Schedules May Increase Number of Work Comp Claims

The Workers’ Compensation Research Institute (WCRI) published a new study that examined whether fee schedules increase the number of workers’ compensation claims.

In previous reports, the WCRI found that in many states, workers’ compensation pays higher prices than group health.

Another study they issued, found that in some states, workers’ compensation prices were two to four times higher than group health prices.

Moreover, in most states, WCRI found, the workers’ compensation systems rely heavily on the treating physician to determine whether a specific patient’s injury is work-related or not.

Dr. Olesya Fomenko, the author of the report and an economist at WCRI, said that, “Policymakers have always focused on the impact fee schedules have on access to care as well as utilization of services. This study shines a light on an issue that policymakers and other system stakeholders might not be thinking of, which is that physicians may call an injury work-related in order to receive a higher reimbursement for care he or she provides to the patient.”

Two of the findings from the study are as follows:

  • If the cause of injury is not straightforward (e.g., soft tissue conditions), case-shifting is more common in the states with higher workers’ compensation reimbursement rates. In particular, the study estimated that a 20 percent growth in workers’ compensation payments for physician services provided during an office visit increases the number of soft tissue injuries being called work-related by 6 percent.
  • There was no evidence of case-shifting from group health to workers’ compensation for patients with conditions for which causation is more certain (e.g., fractures, lacerations, and contusions).

What does this mean?

It means that physicians seeking higher reimbursements are classifying some injuries as work-related, and that there is no evidence of case-shifting from group health where the cause is more determinable.

What it also means is that no matter what the industry tries to do to lower medical costs, there is always a way for physicians and other stakeholders to do the opposite for their own benefit.

And given that, you have to wonder why the industry is deaf, dumb and blind to alternatives that apply basic economic laws to saving money. If you can get a good or service at the same or better quality, and at lower cost, no matter where that is, you go there.

It works that way when buying cars in one state, when the buyer lives in another state, and it should work that way with medical care, particularly regarding surgery.

The industry should not listen to certain individuals who dismiss this idea, and call the locations where better or equal care can be obtained at lower cost, “Turkishmaninacanstans“.

It demeans the hard work and dedication of medical professionals and business people who have spent years and money on building a business to provide health care that is affordable and of the highest quality.

It insults the education and training of doctors, nurses, and medical technicians in those countries who otherwise might not be working in such a highly respect profession as medicine.

It only proves that the author of that canard is a coward, a racist, and dead wrong.

 

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.

Nickel and Dimed: Hospital Edition

Last week while I was drinking Indio and Dos Equis, Anthony Cirillo, president of Fast Forward Consulting, which specializes in experience management and strategic marketing for healthcare facilities wrote an article in Hospital Impact entitled, “Much like airlines, hospitals nickel and dime patients”, in which he says that hospitals have learned from the airline industry how to nickel and dime patients by making up reimbursement cuts by creatively finding ways to charge extra and often hidden fees.

Mr. Cirillo cites two articles in The New York Times by Elizabeth Rosenthal. The first article, “After Surgery, Surprise $117,000 Medical Bill From Doctor He Didn’t Know”, mentioned that a patient received a bill from an assistant surgeon he did not know was on his case. The bill was $117,000. The primary surgeon was reimbursed for $6,200, but the assistant surgeon billed for, and was reimbursed for the $117,000.

The second article, “As Insurers Try to Limit Costs, Providers Hit Patients With More Separate Fees”, discussed how providers are billing patients for separate fees such as a $1,400 emergency room fee, which the insurer paid , when a husband and wife went to a hospital for a scheduled induction of labor for their second child, and a $2,457 fee for “noncritical activation” of the trauma team in addition to the hospital’s $240 facility fee, after a woman drove her stepdaughter to an emergency room after a bicycle crash.

Cirillo said that patients do have options and choice when it comes to their healthcare. They can choose between local competitors, go cross-county, cross-state, out of state and out of country. Medical tourism continues to grow and with the increasing number of Joint Commission International accredited hospitals, employers are actively choosing to send people overseas.

This option, as I have been saying now for two years, should also apply to workers’ comp. Anyone who thinks that hospitals will not try to stick it to employers and comp carriers for their injured workers’ medical bills is sadly mistaken, fee schedule or no fee schedule.

Employers who are self-insured or who are in a state that allows them to opt-out of the statutory system, are vulnerable to this adding on of fees to the total hospital bill, on top of what the surgeon charges for the actual operation, much the same way patients in the two articles by Ms. Rosenthal were.

When the bill came from the hospital in which my father passed away in, the total bill was over $200,000. I looked through it to see if there were any charges that did not seem right, but could not find anything out of place. With his health insurance paying the majority of the bill, our portion was still over $900.

Cirillo also stated that as high-deductible plans become the norm, these fees impact consumers directly and then cause health premiums to rise in tandem. Sure, he states, there are legitimate fees typically not reimbursed, but then there are the wink and the nod fees that have become so commonplace that they fade into the background and people are numb to them just like the airline charges.

Some employers have high-deductible workers’ comp policies, and it would be incumbent on them and their brokers to explore alternatives to extra and added-on hospital bill fees, and as Mr. Cirillo said, medical tourism can be one such alternative.