Tag Archives: paduda

Who’s Going to Pay for the Opioid Crisis?

Insurers are loosening policy language to allow more treatment for opioid addiction. Treatment centers and providers are opening, expanding and increasing services to meet growing demand. Workers’ comp requires treatment for those addicted to or dependent on opioids, leading to higher costs for employers, insurers and taxpayers. Medicaid will be saddled with much of the burden, as addicts often lose their jobs and have no other coverage – so we taxpayers will foot the bill.

We know who’s going to be writing the checks – ultimately you and me and our nations’ employers, in the form of higher insurance premiums, higher taxes and lower earnings for employers.

That’s wrong. And not just-kinda-sorta-of-that’s-too-bad wrong, but ethically, morally and maybe even legally wrong.

See also: How to Attack the Opioid Crisis  

The purveyors of this poison have made billions by lying, deceiving and killing our fellow citizens. By crushing families, destroying towns, bankrupting businesses, ripping apart our social fabric.

And we’re left paying the bill in dollars, deaths and soul-searing pain.

I have a modest proposal.  Make the pill-pushers pay.

Congress should pass a bill, and the president should sign it, making the opioid industry pay for its sins — treatment coverage, a flat amount for each person who died on their poison and reimbursement for all past costs incurred by individuals, families, taxpayers and employers.  Bankrupt the industry, take every penny the owners have and use it to help those they’ve harmed.

Let’s call it the Corporate Opioid Responsibility Payment Service Establishment Act. CORPSE, for short

Make the bastards pay.

Work Comp’s Future Is Not What You Think

Employment drives workers’ comp. More specifically: payroll, industry type and claim frequency.

Employment is the end-all, be-all of workers’ comp — for premiums and policies on the front end and for getting workers’ comp patients back to work when claims do happen.

So when a whole lot of jobs in a bunch of industries appear to be disappearing, we workers’ comp folks need to take notice.

If you insure, manage claims for, provide services to or otherwise work in the transportation/logistics industry, you’d best be watching developments in Pittsburgh and keeping your eye on Otto, the self-driving-truck company that Uber just bought for $680 million.

See also: States of Confusion: Workers Comp Extraterritorial Issues 

Uber is experimenting with self-driving cars in the Steel City, a big step on the way to fully automated driverless cars.

self-driving-uber

Ford is heavily involved and plans to have a self-driving car on the market in five years. Sign me up! As someone who spends way too much time behind the wheel, I’m all over this. Work, read, etc. while being transported to client meetings? Heck, yes!

The giant ride-sharing company is also behind Otto, an effort to automate long-haul trucking.

Photo below from the SF Chronicle//Testing of a Volvo truck by engineer Nic Munley.

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Unlike competitor Lyft, Uber doesn’t seem to care that its current drivers are going to be left ride-less in the not-too-distant future, nor is Uber bothered that, if when Otto and its lookalikes are successful in removing drivers from trucks, those 900,000 truck drivers will not have jobs.

And without truck drivers, truck stops won’t be selling much food or other necessities. Motels won’t be providing showers or rooms. Body shops won’t be needed as much, either.

Uber contends that the 24/7 usage of driverless vehicles will mean more jobs for mechanics, but that’s speculative, at best. In fact, as these vehicles will just be replacing miles driven by vehicles currently piloted by people and not adding more vehicle miles, I don’t see why any more mechanics will be needed. Actually, less maintenance may be the norm because of constant monitoring of vehicle systems.

See also: 25 Axioms Of Medical Care In The Workers Compensation System  

So…

  • fewer truck drivers
  • fewer support staffs
  • fewer jobs in service stations and motels
  • fewer “taxi-type” drivers
  • fewer accidents –> less work for body shops, less demand for auto parts and paint and less need for auto claims adjusters

For workers’ comp…

  • much lower premium volume
  • far fewer claims to service
  • far fewer jobs to return injured drivers to
  • possibly more claims in the near future as drivers see the writing on the wall

What Is the Business of Workers’ Comp?

At the risk of alienating most people within the workers’ comp world, here’s how things look from my desk:

Most workers’ comp executives – C-suite residents included – do not understand the business they are in. They think they are in the insurance business – and they are not. They are in the medical and disability management business, with medical listed first in order of priority.

That statement is bound to lead more than a few readers to conclude I’m the one who doesn’t know what I’m doing. For those willing to hear me out, press on – for the rest, see you in bankruptcy court.

Twenty-five years ago, the health insurance business was dominated by indemnity insurers and Blues plans; big insurers like Aetna, Travelers, Great West Life, Met Life and Connecticut General and smaller ones including Liberty Life, Home Life, Jefferson Pilot, Time and UnionMutual. Where are those indemnity insurers today?

With the exception of Aetna, none is in the business; the only reason Aetna survived is it took over USHealthcare, or, more accurately, USHealthcare took over Aetna. The Blues that became HMO-driven flourished, as did the then-tiny HMOs – Kaiser, UnitedHealthcare, Coventry. Why were these provider-centric models successful while the insurers were not? Simple: The health plans understood they were in the business of providing affordable medical care to members, while insurers thought they were in the business of protecting insureds from the financial consequences of ill health.

The parallels between the old indemnity insurers and most of today’s workers’ comp insurers are frightening. Senior management misunderstands their core deliverable; they think it is providing financial protection from industrial accidents, when in reality it is preventing losses and delivering quality medical care designed to return injured workers to maximum function.

That lack of understanding is no surprise, as most of the senior folks in top positions grew up in an industry where medical was a small piece of the claims dollar. Medical costs were considered a line item on a claim file or number on a loss run, and not “manageable” – not driven by process, outcomes, quality.

Think I’m wrong?

Then why is the industry focused almost entirely on buying medical care through huge discount-based networks populated by every doc capable of fogging a mirror (and some who can’t)? Even with those huge networks, why is network penetration barely above 60% nationally? Why has adoption of outcome-based networks been a dismal failure? Why do so few workers’ comp payers employ expert medical directors, and, among those who do, why don’t those payers give those medical directors real authority? Why do non-medical people approve drugs, hospitalizations, surgeries, often overriding medical experts who know more and better?

Because senior management does not understand that success in their business is based on delivering high-quality medical care to injured workers.

At some point, some smart investor is going to figure this out, buy a book of business and a great third-party administrator (TPA) for several hundred million dollars, install management who understand this business is medically driven and proceed to make a very healthy profit. Alas, the current execs who don’t get it will be retired long before their companies crater, leaving their mess behind for someone else to clean up.

workers' comp

Workers’ Comp: Where the Smart Money Is…

What’s with all the investor interest in workers’ comp services? There are several dozen private equity (PE) firms looking hard at the workers’ comp services business today, with many pursuing acquisitions of companies large and small. While their approaches, priorities and goals may differ slightly, there are several reasons why their attention will likely persist for some time.

First, there are a lot more investment firms out there these days than five or 10 years ago, with a lot more capital to invest. That means lots of smart people with big bank accounts are looking to park millions of dollars, which means there’s a lot of competition for attractive companies.

Second, some comp services companies have gotten pretty big, with earnings in the tens of millions of dollars and revenues north of $200 million. Finding potential targets, conducting due diligence and going through the deal process takes about the same amount of time and staff if it is a $50 million or $350 million deal. Obviously, PE firms would rather do a couple or three large deals than a bunch of smaller ones as it’s a lot less work on the front end, and a lot less to manage and oversee after the deal is done. And PE firms just seem to like companies with more revenue.

Third, what used to be considered a problem — the regulatory risk associated with a workers’ comp company — is now seen as a strength when compared to a non-work comp healthcare firm. Investors see the 51 regulatory bodies affecting workers’ comp as creating far less risk than the single regulator driving Medicare, Medicaid and most health insurance programs. Investors don’t know what’s going to come out of CMS as reform is implemented, so PE firms are hedging their bets by going where, in a worst-case scenario, they’re going to get hurt in one or two big states.

Fourth, there are a lot of inefficiencies, stodgy business practices and just plain poorly run sectors of the workers’ comp business. PE firms make a lot of money by stripping out inefficiencies, delivering better performance, streamlining workflows and processes, removing cost and delivering more value. Anyone who’s spent any time at all in work comp knows that there are a plethora of opportunities out there to do all of these.

Bill processing, analytically driven medical management, intelligent utilization review, provider clinics, complex case services, IMEs/peer review and chronic pain management and addiction services are just a few sectors where there’s a ton of opportunity.

Interestingly, no PE firm has yet taken advantage of the biggest opportunity in workers’ comp. That opportunity is to buy a comp carrier/TPA, rationalize the claims and medical management process, write workers’ comp insurance and make huge profits by controlling medical costs and delivering much better outcomes. The investment executives I’ve spoken with about this seem to be afraid of the risk; what if they do it wrong, or get a bunch of bad claims, or whatever?

To which I respond: You can’t do it any worse than many of the current comp carriers, so what are you waiting for?

Therapy Charges Are Being Inflated

Your physical therapy (PT) costs may be $15 to $19 per visit higher than they should be. Here’s what’s going on:

It’s common for therapists to perform multiple procedures at the same time on a single body part. Under nationally accepted standards (under the Centers for Medicare and Medicaid Services (CMS) National Correct Coding Initiative), the therapist is to be reimbursed for only one of these procedures. Sometimes, it is appropriate for the PT to bill for multiple procedures — for example, if two procedures commonly done simultaneously are performed at separate times. But, unless the therapist adds a special modifier to the procedure code, only one will be reimbursed.

If multiple procedures are to be reimbursed, the “59 modifier” is added to the end of the CPT code, and the treating provider documents the reason for the variance in coding in the medical notes. The 59 modifier should be on about 11% to 15% of lines on PT bills.

But some payers are seeing 59 modifiers on almost ALL BILLS. It appears the 59 modifiers were not added by the therapist; they were added by a PT network company.

There’s no explanation in the treatment notes for this billing practice; no evidence the affected procedures were actually performed at separate times; no indication the PT network company reviewed the treating provider’s notes prior to upcoding. No documentation, no record, no history.

It appears that the intermediary was adding the 59 modifier as an automated system edit without reviewing the treatment notes. The systemic upcoding has resulted in higher costs for payers.

You should look at bills processed between 2009 and 2014:

  • If more than 20% of lines on your PT bills have the 59 modifier, you MAY have a problem.
  • If more than 40% of the lines on your PT bills have this modifier, you DO have a problem.

For the full blog from which this is excerpted, click here.