Tag Archives: Reimbursements

“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.

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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.

 

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.

Workers’ Comp Goes Federal

MaryRose Reaston, founder of Emerge Diagnostics, wrote an article on Insurance Thought Leadership.com today that said the Affordable Care Act (ACA), also known as “Obamacare” will dip into Workers’ Comp.

According to MaryRose, as of Oct. 1, 2016, state Medicaid programs will be able to recover all of the proceeds from a settlement that were expended on behalf of a beneficiary.

Medicaid, she says,  will be able to attach a beneficiary’s third-party liability settlement (including workers’ compensation) for the entire amount of the beneficiary’s award, and not just the amount allocated to medical expenses.

What this means, Reaston adds, is that funds intended to compensate beneficiaries for pain and suffering, lost wages or any damages other than medical expenses could be subject to the reach of state Medicaid agencies seeking recovery.

Many employers will be affected because the adoption of the ACA has afforded broader coverage under state Medicaid programs, MaryRose writes, because it now includes individuals who are within 133% of the federal poverty level (about $32,252.50 for a family of four in 2015), and under 65 years of age.

For the complete article, click on the following link:

http://insurancethoughtleadership.com/obamacare-expands-into-workers-comp/

 

 

 

 

 

 

 

CMS to Require Bundling of Reimbursements for Hip and Knee Surgery

The Centers for Medicare & Medicaid Services (CMS) announced last week that they will soon require the bundling of reimbursements for hip and knee surgeries, according to an article yesterday on Health Leaders Media.com.

The article, by Gregory A. Freeman, stated that hospitals and health systems will respond quickly and ruthlessly to the CMS announcement.

According to a former CMS official cited in the article, mandatory bundled payments for hip and knee surgeries would shutter one in four skilled nursing facilities and trigger “demand destruction in areas such as diagnostic testing, hospital stays, and avoidable readmissions.”

The move by CMS is not surprising, says Mark Bogen senior vice president of finance and CFO at South Nassau Communities Hospital on New York’s Long Island.

Bogen referenced the initial demonstration project set up through CMS whereby many providers selected the DRG’s (Diagnostic Related Groups) 469 and470 (major joint replacement or reattachment of lower extremities, with or without major complications or comorbities), as a way to test moving forward to a value-based payment system.

CMS demonstrated through this project that more than half of the cost of providing care for joint replacement occurred post-surgery, Bogen stated, and that the bulk of the cost occurred in either the acute inpatient rehab units or sub-acute rehab units of skilled nursing facilities (SNF’s).

Deidre Baggot, former lead of CMS’s Acute Care Episode Demonstration (ACE) Bundled Payment Pilot, said the evidence to support bundled payments as a more cost-effective alternative to traditional fee-for-service is clear.

Baggot also said that on the hospital side, we can expect to see demand destruction in areas such as diagnostic testing, hospital stays, and avoidable readmissions, which she says is a good thing.

“Post-acute providers will see a significant hit to inpatient rehab and skilled nursing facility utilization as providers search for lower cost alternatives such as home health services.

David Friend, consulting managing director with the Center for Healthcare Excellence and Innovation at BDO Consulting, said that hospitals are likely going to cut their one- and two-star SNFs to mitigate the risk of penalties during the post-discharge period.

Twenty-five percent of the SNFs are expected to close soon, Friend noted, while medically advanced SNFs will flourish.

Another way the bundling of reimbursements will be disruptive is that rather than having a “blank check for services”, reimbursements will be based on a fixed amount of money, says Mike Lessila, director of business development with Vestica Healthcare.

Lessila said that if hospital systems successfully complete the episode of care for less than the contracted cost, they gain financial profit, but if problems arise due to poor episode management, a preventable hospital readmission, or another complication such as a hospital-acquired infection, the provider will bear the cost of fixing them as well as penalties from CMS.

Finally, bundled payments introduce several complexities to care that hospital systems must deal with, said Lessila. One complexity is that hospital systems must think through its care coordination for these procedures, or the likelihood of failure is high.

Additional resources will be required to ensure the patients’ experiences are good and they follow all of the recommended steps to ensure a successful episode. Bundling will also motivate providers and facilities performing the services to streamline and improve communication.

Lessila said that “financial administration of the bundle becomes far more difficult since a single bundle procedure will involve payments to one or many physicians, medical devices and hospital facility charges. The hospital system must understand who gets paid how much and in what form, and be able to track all of the details to determine whether the bundle is profitable or not in the end.”

What does this mean to you?

The closing of skilled nursing facilities, even one- or two-star facilities will back up the rehab process, not only for general health care, but for workers’ comp, since hip and knee surgeries are common procedures in workers’ comp claims.

Diagnostic testing, hospital stays and avoidable readmissions will also impact the claims process for workers’ comp, and may add more costs to the total hospital bill that employers and insurers will pay.

The confusion that may result from basing the reimbursement on a fixed amount rather than a blank check will force the hospital systems taking a greater financial risk and guaranteeing the outcome of the surgery.

Lastly, the complexities of bundling will impact the financial administration of hospital systems, with most legacy billing systems unable to administer these contracts and aggregate the data, according to Lessila.

What does this mean for medical travel?

The disruptive effects of bundled payments may make it possible to implement medical travel into workers’ comp since there is a clear beginning, middle and end to the episode that can be better managed by facilities not covered by CMS rules that will bottleneck the process of adjudicating and settling claims.

But this will only happen when the medical travel industry convinces the workers’ comp industry and employers that they can provide the required procedures at a lower cost than even bundled payments can offer, and with a better guarantee of positive outcomes.

In my article, “What Role Can Medical Tourism Play in Physical Therapy and Rehabilitation for Workers’ Compensation?”, I said that medical tourism can package rehabilitation and physical therapy services the same way the other medical services are packaged, along with the cost of treatment, airfare and accommodations.

Medical travel facilities can take up the slack from the shuttered skilled nursing facilities that may result from the implementation of bundled payments. The medical travel industry and their destination partners should consider offering their services as a better alternative.

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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.