Tag Archives: health care

Don’t Drink the Kool-Aid on Opt-Out

Former President George W. Bush infamously said in 2005, “See, in my line of work you got to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda.”

Opt-out supporters and proponents repeat over and over again that opt-out is better for employees.

They forgot to tell that to Rachel Jenkins.

Jenkins, a 32-year-old single mother of four, was injured while working a double shift at a disabled care center in northwest Oklahoma City owned by ResCare, the nation’s largest privately owned home healthcare agency. Jenkins was injured on March 31 attempting to break up an assault of her disabled client by another patient. The incident was witnessed by Jenkins’ supervisor.

After her shift, Jenkins went to the emergency room, where she was administered medication and sent home to rest. Her employer sent her to a company doctor the next day. He provided medication and ordered physical therapy.

But ResCare’s opt-out contract with its employees requires claimants to call a designated toll free number to report accidents within 24 hours, and Jenkins did not call until the 27th hour. Her claim was denied.

Three hours late on a phone call, and Jenkins is on her own.

Bob Burke, her attorney, just filed a case in the District Court of Southern Oklahoma seeking declaratory judgment, saying the state insurance commissioner has obviated his responsibilities by approving ResCare’s opt-out plan and others that don’t give workers at least a one-year statute of limitations to report their injury, as required by Oklahoma law.

“Every opt-out plan I have seen so far has a 24-hour requirement that bars benefits if notice is not given,” Burke wrote in an op-ed published Monday in the Journal-Record newspaper. “Even though state law requires opt-out plans to have the same one-year statute of limitations as regular workers’ comp, the insurance commissioner continues to approve the plans, and the legislature, in House Bill 2205, is trying to remove the plans from public inspection under the Open Records Act.”

This case demonstrates the true intent of at least THIS opt-out participant: to stick it to the worker.

The employer cannot claim lack of notice – the injury was witnessed by her supervisor, and Jenkins was sent by the company to its doctor!

Burke says the insurance commissioner approves the 24-hour limitation because it is a notice requirement only. Apparently that translation got lost in practice, because ResCare and its administrators clearly are using the provision as a statute of limitations.

I’m sure there’s another side to the story. Opt-out proponents will have to spin that other side to preserve credibility. In the meantime, the wheel in the opt-out PR repetition machine has a broken cog.

Opt-out had me semi-convinced that it was a valid alternative to traditional workers’ compensation with its promises of less bureaucracy, better injured worker care, greater efficiency, competition and improved outcomes.

Proponents kept repeating the benefits over and over and over again…

The propaganda almost got catapulted, and I nearly drank the Kool-Aid.

Not now. It smells poisoned.

To Bundle or Not to Bundle?

To purchase services on a bundled or unbundled basis is a question that risk managers have debated for many years. In the past, conventional thinking among many risk professionals was to purchase services from distinct service providers. This decision was typically based on which vendors were perceived to offer the highest quality or lowest-priced services.

In recent years, however, there appears to have been a shift in thinking, as bundled programs have become more popular. Technology advancements are helping drive this change. In large part, this is because of the improved efficiencies and outcomes that a packaged program can provide.

Examining the process will underscore the benefits that bundled services offer. However, no two programs are alike, and customization must continue to be part of the discussion for any employer.

The bundled approach
As businesses strive for increased savings and productivity, services such as clinical consultation, pharmacy management, provider selection and bill review are more commonly sought from a single services provider and integrated into the overall claims management process. Robust technology systems tie these service components together and provide risk managers with comprehensive access to complete and real-time information like never before. All professionals managing the injury make better, more informed decisions and ultimately improve outcomes.

Clinical consultation
When a workers’ compensation injury occurs, early response and appropriate treatment are critical. Integrating clinical consultation services ensures that an injured worker talks with a nurse by telephone shortly after an incident occurs. The two parties discuss the injury and related symptoms along with other health conditions that might affect the injury and recovery process.

Using his medical knowledge, the nurse can then discuss recommended treatment options. Depending on the severity of the injury, this can range from self-care to an occupational clinic visit to emergency room treatment. One of the key advantages to this approach is that it removes recommended treatment input from the manager or supervisor.

Provider selection
In a well-designed program, the nurse will have access to a listing of prequalified medical providers. These providers will have been selected based on a demonstrated ability to deliver desired outcomes on a consistent basis.

The providers also will have shown that they understand the workers’ compensation system and employer expectations. This contributes greatly to return-to-work initiatives. Quantifiable physician rating programs are preferred over an expansive listing of physicians who have been selected solely based on their willingness to negotiate price.

Pharmacy management
Management of prescription drug costs can also be part of a bundled services package. Most successful programs will employ injury-specific formularies. These are listings of drugs approved for certain types of injuries or conditions. Given today’s increased use of opioids in treating work-related injuries, these custom formularies can be a valuable asset in preventing unnecessary or extended use of such powerful narcotics.

A pharmacy management program can be structured so that a claims examiner receives an alert if a particular drug is prescribed or requested. The examiner can then place a call to the physician or pharmacist to see if there are alternative drugs available. Often, unnecessary or inappropriate drugs can be blocked at the point of sale.

The use of network pharmacies can also add value. These pharmacies are selected based on quality, price and an understanding of program expectations. Drugs here are much preferred and often less expensive than prescriptions obtained from a physician’s office.

Network pharmacists also understand the value of generic drugs versus brand name prescriptions and recommend these when appropriate. They are available to educate injured workers about the benefits or risks associated with any given drug.

Bill review
Bill review is becoming more commonly purchased as part of a bundled program. An effective bill review program goes beyond applying fee schedules and physician provider organization (PPO) discounts and is really driven by how information is processed.

Bill review services seek all possible reductions on every bill. Accurate coding should be applied throughout the process, and it should reflect the lowest possible allowance for any code and provider. Additional savings are then typically charged as a percentage of savings. The more discounts obtained early on, the lower the service fee will be.

Technology has really increased the attractiveness of bundled service programs. Detailed and immediate information empowers professionals to make sound decisions and take steps to move a claim toward closure and return an injured employee to work more readily than ever before.

As an example, when a clinical consultation nurse and claims adjuster share a single technology system, appropriate notes can be exchanged seamlessly and early details can be accessed that may later affect the case. Such a system also allows for a complete and up-to-date listing of prequalified medical providers and injury-specific drug formularies to be easily updated and maintained. This information is essential when an injured worker is seeking initial medical treatment or a claims adjuster is monitoring prescribed drugs. Also, when participating physicians and pharmacies are on a single system, medical bills are easily accessed and reviews performed more readily.

Additionally, technology associated with these types of services can produce valuable data used to measure performance and identify trends. It is then possible to develop strategies to improve outcomes in care management and at the desk level based on quantifiable information. When services are bundled and one system ties them together, gaps in data are avoided.

Business trends will continue to evolve, as will debates over bundled versus unbundled services programs. However, today’s discussion is different than those in the past because of the advancement of technology and its resulting impact. Risk managers are looking to innovation to drive enhanced capabilities seeking improved efficiencies and effectiveness. Given the high stakes associated with increasing productivity and lowering costs, this debate is likely to intensify in the future, with technology adding zest to the conversation.

This article first appeared on WorkCompWire.

Get the Word Out: Ask for Help!

We need to focus on the root causes of suicide and help people feel okay about receiving help. There is no better place to do this than in the workplace, and this week is National Suicide Prevention Week, which gives us the opportunity to spread the word.

It’s important to understand some of the antecedents, like depression, because this is where the cure lies and where, because of our misunderstanding and fear, we often don’t act. Here are some statistics from the American Association of Suicidology that should open everyone’s eyes:

  • Nine out of 10 people who die by suicide had a diagnosable mental disorder.
  • Only three out of 10 people who die by suicide received mental health services in the year before they died.
  • Depression is the most prevalent mental health disorder — 20.9 million American adults suffer from a depressive illness in any given year.
  • Treatment for depression is effective 60% to 80% of the time.

A 2007 study featured in the Journal of the American Medical Association found that depressed employees, who received “enhanced care,” defined as care management and optional psychotherapy, worked longer weeks and demonstrated greater job retention than other groups. This led to an annual average value of $1,800 per worker, which is estimated to be greater than the cost of “the outreach program and the roughly 10 additional mental-health specialty visits made by subjects in the treatment group.”

I realize that there are a lot of statistics that might make you zone out, so let me make what I am saying perfectly clear.

Educating the workforce about mental health and depression so that folks know that it is perfectly okay to seek help should be every employer’s goal. It is the right thing to do. It will also lead to higher productivity and lower safety and healthcare costs.

Once people feel comfortable admitting they have a problem, they will be more likely to seek help, which leads to the next thing employers or insurers should do. They need to have some sort of behavioral health service that will do a confidential but thorough assessment so that they can facilitate a referral for the right kind of assistance for each person in need. An employee assistance program (EAP) can help in both aspects of this process; education and assessment/referral/follow up.

This year, make National Suicide Prevention week the time when you kick off the process of education — and make sure that this is the beginning, not the end, of your efforts.

For assistance in doing this, visit the National Alliance for Suicide Prevention, Workplace Task Force.

A Positive Comment (Finally) on Obamacare

Healthcare reform is certainly receiving its share of abuse. Whether the conversation is local or national, private or public, one is sure to hear how Obamacare is nothing but bad news — job destruction and the end of one’s ability to direct personal healthcare. Rarely do you hear a positive comment.

Until now, that is.

Read on to learn more about a market development that actually looks consistent with Obamacare’s objective of making healthcare delivery more efficient and less expensive.


One of the changes found in the voluminous law is the requirement for the government to begin considering the quality of care when making reimbursements under its insurance program, Medicare. A section of the law creates incentives for providers to pay more attention to the quality of their care, to receive a greater payment for their services. These incentives encourage what has become known as accountable care organizations, or ACOs. ACOs are not necessarily new legal entities, but rather are descriptions of healthcare delivery systems that place an emphasis on quality of care to reduce expense.

Seems like a reasonably good idea, but how do these same quality efforts work in the private commercial market? Not so well.

First, how can the initiatives be tracked when the patients are insured by third-party carriers? Who is rewarded when a provider does a good job, limiting readmissions and health costs? Who even knows when they do a good job? Second, how does community rating distinguish between those providers applying quality low-cost care and those running up the tab to enrich their bottom line?

Fast answer: Quality-care incentives being encouraged by Medicare are largely lost, and certainly not encouraged, when patients are covered by a fully insured or fixed-cost insurer.

What about high-deductible plans that match with the providers’ quality, efficiency and health efforts? No, these, too, are limited by rules imposed by Obamacare on the fixed-cost insurance market.

Community health plans

If the door is shut on providers trying to apply ACO strategies to the fixed-cost commercial market, what can be done? After all, if providers have reworked their businesses to focus on quality and efficiency, it seems illogical to apply these efforts in only the Medicare reimbursement market.

Fortunately, innovation is finding its way to provider systems, under the name of “community health plan.” A community health plan is a network, established by a regional medical provider, offering members of its community superior and affordable healthcare through a plan using only that provider or other like-minded regional providers. These new community health plans overcome the obstacles found in the fixed-cost insurer market and enable all the quality-care efficiencies to be applied in the commercial market.

Think about it: Community health plans were first developed because providers wanted traction with their local communities. They wanted local patients and buyers to call and buy from them first. That’s why many have already adopted a community health plan or at least looked into one years ago.

What providers found, however, was mountain-sized red tape, inconsistent application to their objectives and new rules related to Obamacare that made the idea of a community health plan a bad one.

Enter the stop loss group captive, or “medical captive.” A medical captive is a reinsurance vehicle that pools a layer of self-funded health benefit risk.  The medical captive solution enables providers to offer their community a health plan immediately. No regulatory red tape. Provider have a commercial market health plan where quality-care initiatives can be objectively monitored so cost savings and efficiency is not a guess or lost to a third-party insurer. Cost-saving rewards arising from quality and efficiency can be measured quarterly if not monthly under the medical captive approach. A provider’s cost-saving ideas receive real-time feedback.

The medical captive is built on a self-funded chassis that also delivers benefits over the traditional market. The post-Obamacare insurance environment includes community rating and restricted plan designs, but self–funded insurance programs avoid these potholes. Put another way, a self-funded insurance program fits nicely with the provider’s ACO efforts and allows most of the Medicare-inspired initiatives to be realized in the commercial market. So long as the medical captive is the financing vehicle being used by the provider’s community health plan, the disconnect between Obamacare’s quality initiatives and the commercial insurance market are resolved.


Hospitals are attracted to the medical captive as a form of community health plan for several reasons. First, the narrow network is gaining ground as a viable solution for keeping medical expenses under control. Employers and employees are now receptive to limiting choice to the local provider in exchange for a lower price. This is good news for the hospital without an existing health plan that is looking for traction with its local employers. The hospital-sponsored narrow network is an approach that is simple to implement with the medical captive. In addition, hospitals with existing community health plans of the fixed-cost variety now are looking to add the medical captive as another choice. Frequently, the hospital’s investment in claim paying services, network and, of course, ACO strategies seamlessly integrate into the medical captive.

Larger physician practices find themselves in a place similar to that of many hospitals in their quest to retain and grow their customer base. Offering a health plan with a capitated physician service component (with a set fee per person, no matter what care they need) is easily accomplished with a medical captive. Physician practices can quickly distinguish their practices from the rush of hospitalists with a health plan that incorporates much of their treatment philosophies, including ACO solutions. The flexibility of the medical captive built on a self-funded platform enables creativity in plan design and buyer incentives that mesh nicely with efforts by physician practice efforts directed at reducing high-cost diseases. Hospital services can then be delivered to the buyers through the health plan on a contracted basis. Measuring the effectiveness of the physician practice efforts at cost control is readily verified by reference to the medical captive underwriting results. It’s not hard to understand why larger physician practices are quickly moving to the medical captive as part of the solution for reinventing healthcare delivery.

Shared objectives

Everyone agrees with the objective of lowering the cost of healthcare. Not everyone, however, agrees with or understands what goes into the cost of healthcare. The cost and purchase of healthcare is more complicated than buying a pair of shoes, unfortunately. Most consumers do not see what it actually costs to receive a medical procedure or purchase a medicine. This is because many do not directly pay or see the cost of the care, but rather the buyers pay a fixed cost or premium and then enter a buffet of healthcare providers. Cost efficiency is a low priority and only mentioned at renewal time or when the overall price trend for the fixed cost interferes with the buyer’s budget.

Looking at Obamacare, we should be encouraged that healthcare providers are growing closer to the financing of care. If the law is encouraging the formation of new healthcare financing mechanisms that offer objective and immediate feedback on quality, cost-saving solutions, we are starting to reach our shared objective.  When buyers and sellers take even one step closer to achieving the same goal, healthcare starts looking more like buying a new pair of shoes.

Easy Way to Spot Workers’ Comp Fraud

While there is considerable talk about fraud in workers’ compensation, the discussion usually refers to fraud by claimants or employers. Unfortunately, fraud and abuse also occurs in medical management.

Poorly performing medical doctors produce high costs and poor claim outcomes. When they are also corrupt, the damage can be exponential. We know poorly performing and corrupt doctors are out there.

More importantly, we also know how to find them!

Disciplining providers by not paying them when they knowingly overtreat is one solution, but even better is avoiding them altogether. Identify the bad doctors and carve them out of networks.  Most agree with this philosophy, yet few medical networks in workers’ compensation have seriously addressed the issue.

Efforts to solve the problem should focus on identifying the perpetrators by means of a well-designed analytic strategy. The data, when analyzed appropriately, will point out medical doctors who perform badly.

There is a trail of abuse in the data. Bill review data, claims payer data, and pharmacy data, when integrated at the claim level including both historic and concurrent data, present a clear picture of undesirable practices. Outliers float to the surface.

Fraudulent providers treat more frequently and longer than their counterparts. They also use the most costly treatment procedures, selected as first option. The timing of treatment can produce evidence of corruption, such as when more aggressive treatments like surgery are selected early in the claim process.

Some of the more subtle forms of medical fraud involve manipulating the way bills are submitted. Corrupt practices attempt to trick standard computerized systems. They consistently overbill, knowing the bill review system will automatically adjust the bills downward. Systems can miss subtle combinations of diagnoses and procedures and allow payment.

Likewise, some practitioners bill under multiple tax identifiers and from different locations. Unless these behaviors are being monitored, computer systems simply create different records for different tax ID’s and locations, making the records appear as different doctors. When attempting to evaluate performance, the results are skewed. Provider records must be merged and then re-evaluated to arrive at more realistic performance scores.

Disreputable providers may obtain multiple NPI numbers (National Provider Identifier) from CMS (Centers for Medicare and Medicaid Services). Once again, the data is deliberately made misleading.

The data can also be analyzed to discover patterns of referral among less principled providers and attorneys. Referral patterns can be monitored.

The data can be scrutinized to find doctors who are consistently associated with litigated cases. That may mean they are less effective medical managers or could indicate that they are part of a strategy to encourage litigation and certain attorney involvement. Kickbacks are obviously not shown in the data, but the question is raised.

Many doctors who skirt ethical practices would be shocked to be called fraudulent. Yet that is exactly what they are. Changing the name does not whitewash the behavior.

Happily, the good doctors are also easy to find in the data. Their performance can be measured by multiple indicators, and, analyzed over time and across many claims, they consistently rise to the top.

Selecting the right doctors and other providers for networks is a complex but important task, and subtleties of questionable performance can be teased out of the data.

The most important approach: Monitor the data in real time so you can intervene and thwart those trying to commit fraud.