Tag Archives: workers compensation

Addressing the Rise in Topical Prescriptions

Across the country, healthcare providers are shifting their prescribing practices in response to the opioid epidemic. According to IQVIA Institute’s Medicine Use and Spending in the U.S. — A Review of 2018 and Outlook for 2023, prescription opioid volume declined 43%, from 246 billion morphine milligram equivalents in 2011 to 141 billion in 2018. Many factors have driven the decline, including news media coverage, state and federal initiatives (e.g., prevention, intervention, treatment and recovery support), the Center for Disease Control and Prevention’s 2016 guidelines for prescribing opioids for chronic pain, healthcare provider education, lawsuits against companies that manufacture and distribute opioids, the arrest and prosecution of healthcare providers and efforts taken by insurers to reduce opioid prescribing.

Although there has been significant progress in some ways, unintended consequences periodically emerge in the fight to reduce opioid dependency and addiction. For example, in early efforts to address the emerging opioid epidemic, law enforcement officials aggressively targeted and shut down opioid pill mills overnight. This abruptly left many opioid-dependent patients without access to opioids, resulting in a spike in heroin use. As another example, several states and private companies have successfully implemented policies to limit opioid prescriptions on initial fills to seven days or less under specific circumstances. In response, some healthcare providers have avoided these limitations by prescribing 30 days (or more) of pills in the shortened time frame. Lastly, as prescribers look for alternatives to opioids, the healthcare industry has seen a dramatic increase in the use of topical and compounded pain relievers. This has increased the cost of providing care in a healthcare system already struggling to contain medical costs. Despite the increased spending, these options often fail to demonstrate a corresponding desired therapeutic outcome.

This article will share some strategies being used by insurance companies to help injured workers receive cost-effective and therapeutically effective pain management drugs, with the ultimate goal of returning them to work and more productive lives.

Topical vs. Compounded Pain Reliever

By definition, a topical medication is a medication administered externally. Commercially available topical pain relievers usually contain one or more of the following ingredients: lidocaine, menthol, methyl salicylate, capsaicin and camphor.

The Food and Drug Administration (FDA) defines drug compounding as “combining, mixing or altering ingredients to create a medication tailored to the needs of an individual patient.” It notes: “[c]ompounded drugs are not FDA-approved.” Compounded medications can be made into a variety of dosage forms (e.g., oral, injectable, topical, etc.), but the majority of compounded medications we have seen in workers’ compensation are topical (i.e., applied to your skin).

Coventry and First Scripts 2018 Drug Trend Series Report noted that topicals represent 5.1% of high-impact drug classes by volume but 14% of costs. 68 of every 1,000 workers were using topical prescription analgesics, and nearly eight of every 1,000 workers were using private label topical analgesics. As Coventry’s Director of Pharmacy Product Development Nikki Wilson noted, retail, mail-order and out-of-network prescriptions for compounds costs and use decreased while topical costs and use increased in 2018. Topical costs increased due to the use of private label topical analgesics (PLTA), some of “[w]hich add little to no value clinically but increase costs exponentially” according to Wilson.

Studies Making News

In November 2016, CVSHealth published The Rise and Fall of Compound Spend – Ongoing Monitoring Enables Early Identification of Lidocaine Spend, which noted that gross costs per compounded claim “increased nearly 1,700 percent for employer clients” from January 2011 to March 2014, while the “[a]verage gross cost per 30-day script increased more than 10-fold over a three-year period.” Leveraging a multidisciplinary team that included pharmacists and physicians, CVSHealth developed criteria to provide “coverage consistent with labeling, FDA guidance, standards of medical practice and evidence-based drug information to help ensure patient safety and appropriate utilization.” Their strategies drove the use of lidocaine products down on average by more than 80%.

In the August 2018 Office of Inspector General (OIG) report, Questionable Billing for Compounded Topical Drugs in Medicare Part D, OIG found that about 550 pharmacies and 124 prescribers had questionable Part D billing for compounded topical drugs in 2016 based on five measures that OIG has developed as indicators of possible fraud, waste and abuse. The study was driven by the 625% increase in compounded drugs from 2006 through 2015. OIG made several recommendations, including clarifying Part D coverage policies, conducting training for Part D sponsors on fraud schemes and safety concerns related to compounded topical drugs, clarifying that sponsors may apply utilization management tools, and following up with the pharmacies and prescribers identified in the report.

Workers Compensation Efforts

Several insurance companies have been monitoring and addressing compound spending across the country. The Connecticut Interlocal Risk Management Agency (CIRMA) has achieved success curtailing prescription costs and opioid use by adopting a comprehensive managed care program that combines communication, education, collaboration and data. Through nurse collaboration, prior authorizations, managing the use of compound drugs, excluding long-acting opioids, discussing best practices with prescribers, addressing claims with high morphine equivalent doses and using generic drugs over brand drugs, CIRMA significantly lowered utilization of opioids and compounds. For compound drugs, CIRMA and Coventry created a dedicated drug evaluation team that managed compound drugs and prevented processing of such medications without adjuster approval and clinical input. The effort included providing adjusters with recommendations for appropriate management of compound prescriptions, which “led to a decrease in both compound spending and utilization,” where “the percentage of compound costs dropped 42% from 4.0% in 2015 to 2.3% in 2017.” 

According to CompPharma’s 15th Annual Survey Prescription Drug Management in Workers’ Compensation, the survey of 29 state funds, insurers, TPAs and self-insureds showed that there has been a 49% reduction in compound usage among survey respondents with data for 2016 and 2017. Of the respondents who provided figures, only one had an increase in total compounds reimbursed. A number of reasons were cited for the decline in total drug costs, including a continued focus on improving clinical management programs, expanding utilization review and prior authorization, dramatic reductions in compounds, changes in prescribing patterns driven by physician awareness of opioid risk, state formularies and more structured drug alerts and alert management processes.

Effective July 1, 2018, the Texas Division of Workers Compensation revised Title 28 Texas Administrative Code, amending the definition of the closed formulary to exclude “any prescription drug created through compounding” and “required pre-authorization for all prescription drugs created through compounding.” The background section stated that reimbursements per compounded drug increased 141% from calendar year 2010 to 2015, with ingredient costs for a selected group of 10 commonly compounded drugs increasing between 82% and 1,474% from 2010 to 2014.

Chesapeake Employers’ History with Opioids

For more than a decade, Chesapeake Employers has been trying to turn the tide against the opioid epidemic. In 2009, a dedicated pain management review nursing position was established within the Health Services department to identify and monitor concerning claims. Since that time, the scope of the internal pain management program has evolved and expanded greatly. Now, in addition to a dedicated pain management nurse, Chesapeake Employers’ leverages the data analytics from its Pharmacy Benefit Manager (PBM) Express Scripts and the expertise of an in-house pharmacist, physicians and nurses to stay cutting edge in the approach to care. While there are many indicators of success, the above efforts have helped reduce the dollars spent on dispensing opioids by almost 76% over a five-year period and seen the number of injured workers receiving opioids decrease by 66%. 

Some of the most notable initiatives provide necessary resources to raise awareness for providers, the public and our employees. In 2016, Chesapeake Employers gave $750,000 to the Department of Health to be used for the state’s prescription drug monitoring program (PDMP), which allows prescribers and pharmacists to review opioid fills from all sources within the state. In 2017, Chesapeake Employers launched the STOPIOID addiction campaign via radio ads, safety kits and online safety posters to help educate Maryland about the dangers of opioid abuse and addiction. The Chesapeake Employers’ Communication Department won four awards from the Public Relations of America – Maryland Chapter, including “Best in Show” for our Let’s Work to Stop Opioid Addiction Now campaign in 2018.

See also: Access to Care, Return to Work in a Pandemic  

A final highlight was the 2019 rollout of the Opioid Overdose Response Naloxone (Narcan) training authorized by the Maryland Department of Health, which teaches employees and the public about opioids and overdose and provides materials and training to save lives. 

Chesapeake Employer’s Compound and Topical Strategy

As stated earlier, a costly effect of reduced opioid prescribing seen throughout the industry has been a proliferation of prescribing for topical and compounded pain medications. A recent analysis of Chesapeake data reveals hundreds of thousands of dollars, a larger share of annual drug expenditures, is spent on compounded or topical medications. Similar to trends seen in the industry, Chesapeake Employers’ has observed an increase in cost and use of these medications. Since 2016, pharmacy-dispensed topicals have increased from 2.8% of scripts to 4.4% and from 6.1% to 9.3% of total costs in 2019. This does not include costs for compounded medications and physician-office dispensed topical medications, which further inflate costs. 

Chesapeake Employers leverages a multi-disciplinary team approach when managing pharmacy cost and utilization. This includes the in-house pharmacist, physicians, nurses, claims and legal professionals. The goal is to facilitate rapid injured worker recovery by using cost-effective and therapeutically effective drugs and appropriate means. 

In 2011, Chesapeake Employers’ began researching and educating our claims and health services professionals on compounded medications. The research included documenting the available medical literature and outlining the circumstances under which the use and payment for a compounded medication may be considered reasonable. The research is updated periodically and peer-reviewed by an external independent medical expert.

Closed formulary states, such as Texas, Arizona and Tennessee, only cover drugs on the adopted Official Disability Guidelines (ODG) Workers’ Compensation Drug Formulary list. According to the NCCI’s June 2019 Research Brief Formulary Implementations and Initial Impacts on Workers Compensation, use of topical and compound drugs in Tennessee decreased 35% following the requirement of pre-authorization for all topicals and compound drugs, regardless of the ODG Formulary status. By contrast, Maryland is an open formulary state, which allows physicians to prescribe any medication available on the market. In an effort to address the use of costly topicals and compounds, Chesapeake Employers leverages established medical policy supported by evidence-based medicine and guidelines to help educate healthcare providers. Assessment of the topical’s therapeutic value becomes necessary in continuing its use with our injured workers. Research shared from the American Medical Association (AMA) Opioid Task Force, medical journals and the Federal Drug Administration’s Opioid Analgesic REMS Educational Blueprint shows healthcare providers are less likely to prescribe medication when educated about the risk, especially when guidance is supported by medical guidelines and continuing medical educational training focused on opioid prescribing, non-opioid alternatives and pain management. An educated prescriber provides another layer of protection to the process, because providers are asked to provide the rationale that supports medical necessity and appropriateness. 

In addition to discussions with providers, Chesapeake Employers has implemented other successful initiatives. The company partners with a local compounding pharmacy to meet the prescription needs of injured workers at a lower cost. The company also provides educational letters to prescribers for high-cost topicals for which there are therapeutically equivalent alternatives at a much lower cost. Some individual claim recommendations generate cost savings of greater than 85% without compromise of the desired clinical outcomes.

Conclusion

Educating patients, educating prescribers, using a multi-disciplinary team, enhancing data analysis and reporting, in addition to using peer reviews and independent medical evaluations (IMEs), offer a cohesive approach to evaluating the medical necessity and therapeutic effectiveness of compounds and topicals.

In the face of rising use and cost, insurance companies must help injured workers receive cost-effective and therapeutically effective drugs so they can receive the care they deserve and ultimately return to work and more productive lives. 

See also: Can AI Solve Health Insurance Fraud?  

However, there is still a lot of work to be done when it comes to taking care of our injured workers. It is strongly believed that healthcare professionals are conscious of prescription costs when they are educated about the cost ramifications of their prescribing habits. Greater awareness and transparency about topical pain medications results in better, informed patient care decisions. As Larry Winget said in his book “It’s Called Work for A Reason,” “Knowledge is not power. The implementation of that knowledge is power.”

When all parties involved in the workers’ compensation system understand the therapeutic equivalence, effectiveness and cost savings from using alternatives; and the importance of only prescribing drugs when it is medically necessary for the injured worker, everyone wins.

Impact of COVID-19 on Workers’ Comp

There is much discussion right now on the impact that COVID-19 (Coronavirus) will have on workers’ compensation. Most of this discussion has focused on the potential for claims activity arising from the virus. The determination of whether a communicable disease is “work-related” is a case-by-case evaluation. The large employers that I work with tend to retain risk on both their workers’ compensation and employee benefits programs. Thus, they are not concerned about which financial bucket the money comes from but are prioritizing caring for their workforce instead. Potential claims arising from COVID-19 are not the focus of this column. Instead, I’m looking at how the challenges arising from this virus will affect the workers’ compensation industry.

Individual Claims Costs

In the short term, expect the overall costs per workers’ compensation claim to rise due to the increased duration of claims caused by many factors: 

  • There will likely be delays in treatment as the healthcare industry focuses on fighting COVID-19. That means physicians, hospitals and testing facilities are tied up and that elective surgeries are on hold until this crisis passes. This challenge is not unique to workers’ compensation, as the group health and Medicare setting will be experiencing similar delays. 
  • Modified work will likely be unavailable for many employers, due to the significant downsizing of workforces in many industries, including retail, restaurant, hospitality and airlines.
  • Return to work in any capacity may be a challenge for these same industries. In wage-loss states, indemnity benefits often cannot be stopped without a return to work. 
  • Courts are mostly closed in many states, halting the workers’ compensation adjudication process. 
  • Outside job placement efforts through vocational rehabilitation will be almost impossible, with so many employers idled and a significant percentage of the workforce looking for work. 

Total Claims Costs 

Due to the significant decline in people working in most industries, there will be fewer new claims over the near term. With so many businesses closed or functioning with reduced operations, there are simply fewer opportunities for workplace injuries to occur. 

On the flip side, it is too early to tell what the ultimate impact of compensable virus claims will have on the industry. No one can rule out that the costs from these claims will be as high, or even higher, than what we would experience typically. Specific industries, such as healthcare, some retailers and occupations such as first responders, could see an increase in claims and costs due to the combination of virus-related exposures and the significant overtime hours by their workforce.

Nationally, there is a significant increase in the number of people working from home in response to the outbreak. There is very little case law out there regarding what constitutes a compensable claim when working at home. It will be interesting to see what claims arise from these situations and how courts around the country interpret these situations.

See also: How Coronavirus Is Cutting Connections  

A decrease in total claims may mean less revenue for industry vendors with fee-for-service and per-claim business models such as medical management providers, including utilization review, bill review and case management. Third-party administrators are also often on per-claim contracts, and fewer claims could mean less revenue for them.

Later this year, there could be a spike in claims as things start to return to normal. There will be a massive influx of workers who are both deconditioned and may have forgotten procedures and loss-prevention policies. It will be challenging for employers to ensure their returning workforce is fit for duty and retrained appropriately.

Other Claim Considerations

As many restaurants shift to a delivery-only model, employees who are not usually commercial drivers find themselves adapting to this new role. Could that lead to a spike in work-related auto accidents in that industry? Possibly, but a more significant concern may be that many businesses may not have adequate commercial auto coverage because they did not have drivers until now.

Also, as non-essential businesses close, and many companies shift to a work-from-home model, there should be fewer auto accidents overall.

Industry Financial Implications

The dramatic drop in payroll for many employers may also mean a reduction in the corresponding workers’ compensation premiums they pay. It’s relatively simple; fewer workers equals lower premiums. Look for overall industry premiums to drop sharply for 2020 compared with prior years. Lower premiums also mean lower revenue for state regulatory agencies that are often funded by premium taxes and assessments.

The insurance industry, in general, and workers’ compensation carriers, in particular, depend on investment income as an element in their overall pricing model. With the Fed interest rate at zero and the massive drop in the stock market, those investments will be down across the board. Carriers may have to charge higher rates to make up for the significant decline in investment income.

Like all industries, the workers’ compensation industry is dealing with significant business disruption because of COVID-19. Many offices have closed, and, where possible, companies are implementing work-from-home models. Companies that focused on business continuity planning for such situations have an advantage over competitors that may not have been as diligent in these areas. It is imperative that insurance companies be included as “essential businesses” in any state or local shut-down orders because of the important financial backstop the industry provides to the economy and the workforce in general.

Finally, almost all in-person industry conferences are canceled right now until mid-May and possibly longer, including two of the largest industry events of the year, RIMS and the NCCI Annual Issues Symposium. The conference business is a challenging one because it requires you to invest up-front to secure facilities and resources with the hope you will be able to recoup that investment with sponsorships and attendee fees. Conferences have incurred costs preparing for now-canceled events, and they may not be able to recover those costs. Those unrecouped costs could put a significant financial strain on some event budgets, especially the smaller events that tend to operate with no surplus to tap into year-to-year.

See also: Coronavirus: What Should Insurers Do?  

On a positive note, most workers’ compensation carriers have strong balance sheets that will enable them to come through these challenges. The current crisis is an example of a time when the financial strength rating of your carriers matters most. Injured workers will continue to receive their benefits, and carriers are being very responsive to policyholders, including timely payment of claims. Many claims administrators use electronic banking where allowed, which means even injured workers under confinement receive their benefits in a timely matter.

COVID-19 will affect the workers’ compensation industry well beyond claims related to the virus. However, our industry is strong and resilient, and we will persevere and adapt to these challenges.

What Robots Mean for Workers’ Comp

History provides interesting insights into the debate around automation and employment. In 1632, King Charles I of England banned casting of buckets, for fear that allowing it would ruin the livelihood of the craftsmen who were making the buckets the old-fashioned way. In 1811, the Luddites in England started a movement where they smashed machines that they viewed as threats to employment. These examples have occurred with increasing frequency since the industrial revolution began. Not coincidentally, the per capita income in the world doubled every 6,000 years prior to the revolution and every 50 years afterward.

According to a Pew study, 52% of Americans think that much of our work can be done by robots, but only 38% believe that it could replace the type of work that they do. Additionally, 76% of Americans believe that robots would increase the inequality between the rich and poor.

But standing in the way of change, when viewed through the lens of history, has rarely worked. The key is to focus on the dislocated individuals and provide training to make sure that they can move into new positions. Historically, new positions tend to be more highly compensated, fueling an upward cycle.

It is clear that the pace of change and automation is increasing. In January, the parent company of Giant, Martin’s and Stop & Shop said it would introduce 500 robots to its supermarkets this year. Sure enough, if you Google “Marty the Robot” – a large, grey cone with a bright smile and “googly” eyes — you will find out that he is hard at work at 40 Stop & Shop’s in New Jersey, finding and reporting spills in the aisles and calling for a mop.

It will be interesting to see what retailers follow suit. Walmart has given robots a thumbs up. Target? A thumbs down.

The pros and cons of automation are widely written about. The pros: eliminating mindless tasks, saving money on employee costs, having a safer working environment. The cons: reducing human contact with the customer, eliminating jobs for people who need then and decreasing flexibility in the workplace as automated tasks occur at programmed times.

See also: What’s Beyond Robotic Process Automation  

As providers of workers’ comp insurance, we are watching the rise of automation in the workplace closely. One of the ways we do this is to analyze actual claims that are submitted by our insureds, which are most often small to medium-size businesses. In the restaurant sector, we analyzed over 84,000 claims. and in the retail area we looked at more than 20,000.

One area where we are convinced automation could help reduce worker injuries is in coffee shops. Workers who operate espresso machines eight hours a day are reporting repetitive motion injuries akin to “tennis elbow.” In fact, so-called “Barista Wrist” is now a recognized medical condition. Our study of workers’ comp claims in the restaurant industry found that cafés had more lost time due to injuries than any other restaurant type. And the cause of the highest number of days needed to return to work in cafés – 366 days – was due to wrist injuries.

In a parallel from the retail sector, workers in hair salons are reporting hand, wrist and arm injuries from drying hair with a blow dryer, setting the stage for a new condition that could be called the “Brazilian Blow Out Arm.” Perhaps an innovative, automated “Robot Blow Out” could eliminate these repetitive motion injuries.

Among the most dangerous and expensive injuries in our retail analysis (which includes some wholesale) came from workers engaged in the preparation of meat, poultry and fish, which involves cutting hazards caused by sharp tools and machinery. The average paid claim for a worker who sustains a cut ranges from $4,200 – $7,800, depending on whether it was caused by a non- powered tool, by a powered tool or by being caught in or between machinery.

But once again, repetitive motion injuries in meat, fish and poultry preparation are by far the most expensive at $16,200 for the average paid claim. Clearly, this is an area where more automation would be helpful.

See also: How Robotics Will Transform Claims  

All of this gets us back to our original thesis that history has shown that automation is a net positive for workers which, over time, leads to people taking higher-paying jobs. Yes, jobs are eliminated, for sure. With machines, come risk and injuries, that’s undeniable. But it is also clear that robots will take over the mindless, thankless (and dangerous) jobs and likely lead to a workplace that is safer overall.

With all that said, there is one robot that I don’t want to see and that’s: “Matt, The Workers’ Comp Insurance Executive.”

Electrodiagnostics: a More Powerful FCE?

My recent post on functional capacity exams (FCEs) is a great lead-in to considering another level of related technology. Let’s explore electrodiagnostics as arguably a more powerful arrival in functional exams.

First, let’s recap what quality means in a functional capacity exam: An FCE requires a process that is objective and consistent with the proper balance between specificity to body parts and sensitivity to critical indicators, including pain, range of motion and strength. An FCE must indicate illegitimate effort and attempts to “game” the test by subjects.

I submit to you that, the more a functional exam process can move away from human-tester interventions and totally separate testing steps, the closer it gets to nirvana. This construct is the essence of electrodiagnostics.

A routine FCE process involves various separate tests, including nerve conduction, range of motion and strength. Even with the most advanced equipment, this presents separate processes to assess for validity and to try and formulate into a whole-body issue. What if one test did all of this at once?

Contemplate the electrodiagnostic functional assessment (EFA), where a test subject performs a single test sequence on specialized EFA equipment that measures multiple factors. This provides instant objective credibility. Stated simply, combined factors of muscle strength, pain and range of motion and others need to align in a logical pattern as depicted by computerized readout, or the subject is immediately shown as self-limiting his capability.

The EFA is arguably more accurate than the common FCE in assessing work capacity. EFA has also been proven useful in more specific applications, such as determining the need for hardware removal in post-surgical cases with alleged recurring pain problems.

Consider further that, because the EFA is such a consistent test, it is highly credible as a comparison to prior baseline. The EFA used as a base-line test at time of hire can be saved as a data file without opening until an employee might have an alleged injury at some later period. At such occasion, a new EFA can be performed to compare with the baseline to see what, if any, alleged changes in capacity and pain threshold have occurred. This definitive comparison has held up in court cases, making the EFA evidence as worthy as an MRI would be in comparing pre- and post-injury pictures of a joint or body part.

Quick Tip: Learn More About EFA and the Possible Application to Your WC Claims

– Google “electrodiagnostic functional assessment” to review white papers and scholarly details around the EFA and its applications and case studies.

– For more information, search out Emerge Diagnostics, which has pioneered the application of EFA and which is making efforts to bring EFA to the forefront of medical and legal use. I do not promote specific vendors in “Quick Tips,” and this article is for informative purposes only. However, the EFA is currently a sole-source situation, and reviewing the studies and successes of Emerge Diagnostics is of educational benefit.

– If you want to be cutting edge, do a trial. Pick a WC case or two that is stalled without adequate determination of disability, causation, apportionment or need for surgery, etc. Work to get an EFA entered as evidence and see if the case can turn.

– If you do try EFA, let me know your results. I would like to continue related reporting on this and see how much future influence EFA might have on the larger WC landscape.

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?