Friday, July 29, 2011

SB 863 Bad Idea; Lien Review Board Good Idea

California, among other unique qualities in the workers' compensation industry, allows medical providers and others to "lien" a case that is pending adjudication in the state's administrative review process - commonly referred to as the WCAB, though technically the trial level is at Division of Workers' Compensation District Offices.

The California work comp "lien" process does not operate in the technical legal sense in that a lien takes on a life of its own because most of the time a lien is paid independently of net proceeds to the injured worker. A lien in any other legal setting acts against net proceeds of an asset - such as a lien against a pending house sale.

As a consequence liens and those who file them acquire independent legal rights, and these rights entitle those asserting the lien (aka "lien claimant") to hearings separate and apart from those that determine the rights of the injured worker, albeit by law ostensibly only after the injured worker's case in chief has been resolved.

So it should come as no surprise that liens are a huge adjudicatory problem in California, taking up an enormous amount of resources, at the WCAB and within the business processes of carriers, providers, and others in the system contributing a large frictional cost component to the system.

One of the legislative answers making its way through the halls of Sacramento is Senate Bill 863 by Sen. Ted Lieu, D-Torrance. SB 863 require all liens to be in writing and filed within three years of the date of service for procedures performed before July 1, 2012, and with 18 months from the date of services rendered on or after July 1, 2012. A private health insurer, health care service plan or self-funded employee welfare benefit plan providing medical benefits on a nonindustrial basis would have five years from the date of service to file a lien under Lieu's bill.

This is a bad idea.

First, liens already have to be in writing. Second, there already is a complex (this is California after all) statute of limitations on the books for the filing of liens. Third, all SB 863 really does is shorten the statute of limitations for the filing of liens, which will only PROMOTE lien filing rather than curtail it because, if I'm a potential lien claimant facing a deadline, I'm going to file regardless of its efficacy so I don't get procedurally estopped if my lien has substantive merit.

An idea that is floating around the state, though, is to establish a separate administrative review process.

I like this idea.

According to the Commission on Health and Safety and Workers' Compensation (CHSWC) a survey of lien filers found that medical liens account for about 62% of liens filed. Disputes over the fee schedule details are present in 37% of medical liens and 17% of medical liens are solely about the proper application of the fee schedule.

Workers' Compensation Judges (WCJs) don't have the time, nor the inclination, nor the expertise, to deal with the technical application of the very complex, mind-numbing intricacies of the medical service fee schedule with all of its codes, definitions, procedural exceptions, etc.

The single biggest question to creating a separate administrative review process is who does it, and how does it get paid for.

There are two "who does it" alternatives: a new unit within the DWC, or an outside third party service.

An outside third party service is a bad idea because of the potential for abuse, or in the least, "appearance of impropriety".

A new unit within the DWC is the best alternative because of independence. But how does it get paid for, especially in these times when the allegedly independent funds of the DWC are constricted by battles over the budget and General Fund (that's another set of columns and one of my biggest pet peeves...)?

My proposal is to establish a fee to be paid by the loser in the lien dispute, payable to the DWC. The fee would be need to be incrementally based so that low end liens are shut out of the system, but big enough so that the parties are encouraged to think twice before proceeding with litigation.

I'm sure there are flaws with this idea too, especially in the implementation details. But it is surely better than imposing a more strict statute of limitations that will only increase the burden of liens on the system.

Thursday, July 28, 2011

Federal Debt & CMS Points to Bigger Cost Issues

New Jersey work comp lawyer and prolific blogger (and photographer!) Jon Gelman opined yesterday on the devastating effects on state workers' compensation systems if the federal government goes into default.

Gelman said payments in the state-run workers' compensation systems are so intertwined with the national system that a debt crisis will have a number of major consequences:
  • Centers for Medicare and Medicaid Services (CMS) and its contractor will be unable to provide conditional payment information, bringing negotiations in workers' compensation settlements to a halt.
  • CMS will be unable to approve settlement compromises and releases in advance of disposition of state claims.
  • Chaos will erupt in states where the U.S. Social Security system takes a reverse offset on permanency payments. Insurers and employers could become responsible for the entire amount to be paid.
  • The U.S. Department of Veterans Affairs will be unable to provide information concerning medical treatment of veterans. Records will be held up and will delay evaluations in adjudication of workers' compensation claims.
  • Federal insurers, such as the military health plan Tricare, will be unable to provide benefit information to parties in state workers' compensation cases. The lack of reimbursement data will stymie medical evaluations.
Gelman told WorkCompCentral in an interview that "You don't know what the administration is going to next do to bring it to a new level of chaos. Everybody is postured all over the place, and you don't really know what buttons they're going to push next."

Indeed, one element of escalating workers' compensation costs that is unknown to the industry is the effect over the past five years of CMS' increasing aggressiveness regarding workers' compensation settlements, and the added burden of obtaining approval on a Medicare Set Aside Trust Agreement (MSA) and/or foregoing early claim closure and not settling out future medical components (for those states that permit the settlement of the future medical liability).

There are many different cost components that are within the purview of state legislators and regulators to control, but one that is out of the control of the industry is the federal governments intervention in an otherwise state specific system.

CMS has never had a solid system in place for the expeditious approval of MSAs or any other system in place that would provide the industry with a stability and efficiency to satisfy the federal government's right to reimbursement for medical obligations that should not be covered by Medicare.

I think it would behoove the industry to fund a study to determine just how much the federal government, and specifically CMS, costs employers and carriers on a per claim basis, then use that information to lobby for a more efficient, stable and predictable, process.

As it stands now, the only way to truly avoid the CMS uncertainty is to not settle out future medical. Some states don't allow such settlements anyhow, but for the states that do, this is an important consideration because of the ability to put final numbers on a claim - i.e. sum certains - reducing risk, and shortening the employer's exposure to escalating experience modification adjustments.

Wednesday, July 27, 2011

Peace Officer Case Illustrates the Danger in Presumptions

I think California leads all other states in the nation with various presumptions for finding injury in a workers' compensation system. There is pending legislation making its way through the legislature, without much opposition I might add, that would give privately employed nurses an AOE/COE presumption with regards to certain infectious diseases (AB 375, Skinner).

I have opined in the past that I did not feel this was good policy. A very recent Workers' Compensation Appeals Board (WCAB) case illustrates why this is not good policy.

One of the existing presumptions is for cancer in police officers (Labor Code 3212.1).

Subsection (b) of 3212.1 states:

The term "injury," as used in this division, includes cancer, including leukemia, that develops or manifests itself during a period in which any member described in subdivision (a) is in the service of the department or unit, if the member demonstrates that he or she was exposed, while in the service of the department or unit, to a known carcinogen as defined by the International Agency for Research on Cancer, or as defined by the director.

Subsection (a)(3) applies the presumption of injury to:

Peace officers, as defined in Section 830.1, subdivision (a) of Section 830.2, and subdivisions (a) and (b) of Section 830.37, of the Penal Code, who are primarily engaged in active law enforcement activities.

The issue in Thompson v. LAUSD, No. ADJ6822166 is whether a school district police officer is one of those employees under Labor Code 3212.1 entitled to a presumption of injury for cancer. The Board found that Thompson was not because the Labor Code was specific in the statutory references as to exactly which employees are "peace officers" despite the fact that a school district officer gets peace officer training, has a marked car, carries a gun, has powers of arrest, wears a uniform and otherwise acts, looks, and feels like a police officer.

From a purely legal standpoint, the WCAB's opinion is correct. Thompson is not a "peace officer" as statutorily defined.

But from a functional standpoint, is there any difference in the duties of a school district officer and any other peace officer?

Presumptions of injury are artificial. Their purpose is purely political - to satisfy the public perception that  certain classes of workers have made a case of exemplary sacrifice such that they deserve special treatment.

And I have no problem with the concept, except that where does it stop?

For instance, California Labor Code 3212.11 provides a presumption of injury for life guards who contract skin cancer either during employment (which must be for at least 3 consecutive months in a calendar year - presumably to cover the summer months) or within a period of up to 5 years from last date of service.

3212.11 applies only to public service life guards as defined in that section - why not career privately employed life guards? Presumably they would have the same exposures, if not more, than public service guards. And only to "skin cancer" - which is not defined in the code section. Why not other cancers that may be contracted through exposure to polluted waters, for example?

I know I'm being a bit extreme, but certainly not far fetched. In the world of litigation, the limits of applying a presumption are restricted only by the imagination and creativity of the lawyers articulating an interpretation that may, or may not, have been considered by the Legislature.

Tuesday, July 26, 2011

TX Surgical Audit Not Properly Focused

While I think it's a good idea to perform an "audit" to determine the success or failure rate of lumbar fusion surgery in workers' compensation patients, it is a mistake to place blame entirely on the physicians who perform such procedures.

The Texas Division of Workers' Compensation (DWC) plans to audit doctors who perform lumbar fusion surgeries in order to:
  • Promote delivery of quality health care “in a cost-effective manner, including protection of injured employee safety.”
  • Assure that health care providers “adhere to medically accepted standards of care for conducting lumbar fusions.”
  • Assess return-to-work outcomes for workers who undergo lumbar fusions.
There are many studies internationally over the past 30 years that have documented poorer health outcomes in workers' compensation spinal surgery patients versus the general population.

Indeed, there are several studies which conclude that spinal surgery results in poorer return to work outcomes when controlled against groups that don't get surgery.

So part of DWC's audit objectives have already been well documented in the medical literature.

What we really don't know is why there are such disparate results in workers' compensation spinal surgery cases versus the general population.

Is spinal surgery more likely to be prescribed in a workers' compensation setting? Are physicians more receptive to performing spinal surgery if it is a workers' compensation case, and if so, why? Are spinal candidates more carefully screened for successful outcomes in the general population than in work comp, and if so, why? Are work comp patients in poorer general health than the general population? There are many other such questions that have never been answered, or for which we may never know the answer.

There are likely a number of complex, interrelated reasons why spinal surgery in a workers' compensation setting might result in overall poorer health outcomes.

One big factor that requires study is the injured worker him/her self - our society is a quick fix society, and surgery is part of that mentality. We see in the news and on television every day athletes who have major injuries get surgery to return to their sport in almost no time at all.

The problem is that most people are not athletes, either in body OR mind! Surgery is a very small part in the injury recovery process for athletes (or any surgical patient for that matter). The biggest factor is the post surgical rehabilitation, which requires a lot of work, and a lot of PAIN - the very element for which most patients seek surgery in the first place.

The Texas DWC states that the audit plan is intended to set out the basis for the DWC to take action against providers who perform large numbers of particular procedures, or when a large number of procedures are unsuccessful.

I can understand singling out a few physicians who are out of control with spinal surgeries - but really the goal of the audit should be to educate the injured worker population about the RISKS of spinal surgery.

Perhaps taking action against those few physicians who are determined by DWC to violate standards of care may make physicians more careful who they choose as surgical candidates, but DWC also needs to ensure that injured workers know, themselves, whether they are a surgical candidate and that they take responsibility for their own outcomes.

Its easy to place blame on the provider. Don't forget, though, that a physician can't perform surgery unless there is a willing patient.

The real question is how do you make a patient responsible for his/her own health outcome? This is much more vexing, much more difficult, and much more controversial than placing blame on doctors.

Monday, July 25, 2011

Before Discussing Reform, Define the Mission

Panelists at the California Coalition on Workers' Compensation's 9th annual Educational Conference on Friday all had points of cost elements that they felt should get attention as loss ratios accelerate and impair the business of insurance in the state.

Each of the items mentioned by the panelists have been topics in this blog: discounting of policies by carriers, legal provisions that are regressive reward systems rather than providing progressive rewards, inefficiencies in medical care delivery that make injured workers get legal counsel, vagaries in the determination of disability indemnity benefits, friction in the legal system that makes adjudicating a work comp dispute complex and unnecessarily long, etc.

One theme that came out of the conference should meet nearly universal acceptance - whatever happens with workers' compensation should be focused on improving the system for the employer and employee.

This is a very difficult proposition to uphold because as the system is dissected and then put back together those in the legislative and regulatory bodies tend to focus on details and the big picture tends to get cloudy.

When you are a legislator or regulator, how do you define what is in the best interest of the employer and the employee? Do you define it in costs? Benefits? Some statistical element such as return to work ratio? Medical care access? 

Perhaps when we start talking about "reform" again, those who are entrusted with leading the discussion should first step back and define what it is that workers' compensation should be in an all encompassing, very broad, statement.

Sort of like a mission statement for the system.

California already has something that is akin to a mission statement, albeit in more legal terms - Article 14, Section 4 of the state Constitution. 

The problem with the Constitution is that it focuses on government - "The Legislature is hereby expressly vested with plenary power" to create a workers' compensation system. It doesn't define the mission of those most immediately affected, employers and employees, other than stating that the system will be no fault, provide full medical, provisioned by an insurance industry and an adjudicatory system.

Getting consensus on a workers' compensation mission statement would in the least be a very interesting experiment in social policy development, and at most would drive a very powerful discussion on just what the business of workers' compensation should be all about.

Before we start tinkering with the workers' compensation system again, I think we should step back and define what we want that system to be, and then ensure that whatever we do, we ask ourselves if a legal change fits the mission as defined. This is very hard to do, and I suspect may not fit within our society's penchant for instant gratification, but may be the only way we get a system that provides some stability and reliability to those most affected: the employer and employee.

Friday, July 22, 2011

TAW and the Real Cost Driver

Recently appointed California Department of Industrial Relations (DIR) head, Christine Baker, says that an increase in permanent disability indemnity benefits is forthcoming, but not until a corresponding offset in either frictional or medical costs have been identified and dealt with.

The increase in permanent disability will likely come from the SB 899 mandate passed in 2004 that the PD rating schedule be amended every 5 years to ensure parity with actual wage loss measurements. The Division of Workers' Compensation (DWC) had proposed an amended schedule, but the law was basically ignored by the Schwarzenegger Administration because doing so, they said, would jeopardize the economy.

There are many frictional costs in the present workers' compensation system, and most of those frictional costs are the product of its mind-numbing complexity.

For instance, the entire process of soliciting, choosing and obtaining medical-legal opinions for use in benefit disputes not only takes too much time, but adds a layer of gamesmanship that previously did not exist.

Spinal surgery requests has an entirely different medical-legal process. The original reason was to expedite the process for getting approval for surgery, but the complexity, attendant extra paperwork, utilization review, appeal process just increased the time and expense rather than make the system more efficient.

When things are taken to the basics, there really are only two major areas where costs to employers can be positively affected: medical costs, and time away from work costs.

Medical costs are always under attack - just see my columns on the RVRBS debate. In my opinion medical costs are more the product of frictional costs than the actual cost of providing services - indeed most physicians would agree with that position based on the surveys that I have reviewed in the past couple of weeks.

Time away from work (TAW) costs are more broad and are inclusive of indemnity. But indemnity is a sub-cost in the broader context.

TAW affects more seriously the employer's experience modification factor - a real driver in the employer's premium. The hidden TAW costs are things like lost production, hiring temporary help, shifting employee resources to make up for the injured worker's absence, increased health insurance costs, over-time for other workers to maintain production, etc.

How can the state legislate or regulate TAW? This is a huge challenge because workers' compensation has evolved over the years with layer upon layer of complexity added to address various sub-issues raised in response to outlier abuses.

The average indemnity claim, according to the California Coalition on Workers' Compensation, now tops $60,000. But the amount of permanent disability indemnity to injured workers has gone down. This suggests that frictional costs - costs associated with the complexity of getting from injury to claim closure - have increased ... dramatically.

The friction in processes that affects TAW also affects medical costs - paperwork, receivables collection, reporting requirements, etc.

TAW and medical costs can be positively affected by taking the system back to basics, in my opinion. A hard look needs to be taken at the law and regulations that govern the process of claims - the amount and context of paperwork, the procedures for getting medical attention, the back and forth debates concerning legal minutiae, i.e. frictional costs - all need to be looked at relative to the ultimate question: how do these laws and regulations affect TAW?

If the industry can focus on TAW and how laws and regulations impact TAW we may find more savings than previously thought.

Thursday, July 21, 2011

Pendulum Swinging Can be Stopped - Get Rid of Open Rating

The California Coalition on Workers' Compensation (CWCC) began its 9th Annual Educational Conference yesterday, and according to a WorkCompCentral News story, speakers were telling attendees to brace for new "reform" legislation in the next couple of years as Democrats take more hold of the state's politics, injured workers gain increased benefits, rates increase and medical costs continue unmitigated.

Speakers advised that California is rapidly climbing to top status, again, as the most expensive workers' compensation state and that the average indemnity claim now costs upwards of $60,000 with combined ratios nearing 130.

Anyone who has been in this industry more than 10 years will recognize the characteristics that make this system untenable and wildly unpredictable: complaints of costs, special interest maneuvering, attempts at surgical correction, restatement of costs based on said correction, quiet solicitude for about 4 years while the surgical correction develops scarring tissue, re-initiation of complaints of costs as the scarring starts to hurt then protest and "reform".

However, since 1992, the pendulum has been swinging more wildly and to greater extremes.

Missing from the pendulum debate is, what I believe, the single ultimate "reform" item that initiated the wild physics of the workers' compensation cycle in California, and that is "open rating".

Prior to 1992 California floor rates were set by the Department of Insurance (DOI). DOI was responsible for ensuring that the market for work comp insurance remained vital and vibrant by reviewing system costs and establishing the bare minimum rates that any carrier could establish premiums on. Carriers could charge more, but not less, than the rate established by DOI.

The effect of this system was that carriers competed on claims servicing because since no one could under price the competition the way to keep costs down was to ensure a high level of claims servicing so that the experience modification factor (x-mod) would not be adversely affected, thus keeping long term premiums down.

The market effect of this system was a very robust market for workers' compensation insurance with many small specialty insurers covering highly technical risks and using that special knowledge to manage safety and claims most efficiently.

Starting with 1993, the effective start date of "open rating", things got wild. Price competition blew away half of the capacity in California, and while employers enjoyed record low premiums for several years, the cat got out of the bag around 2000 when capacity dried up, supply became scarce, and premiums skyrocketed at hyper-inflationary rates nearing 50% annually.

I have observed as well a much more dramatic swinging of the pendulum in our industry and that has begat increased legislative and regulatory burden impacting all system participants. We now have a mind-numbingly complex system with networks, exceptions, presumptions, etc. that is nearly impossible to navigate with out special expertise.

In addition we are seeing market contraction with large carriers stating that they are not interested, again, in writing California business because the risks are just too difficult to gauge to ensure some profitability.

While prices are climbing, premiums will again skyrocket as supply diminishes, and since demand is constant because work comp is mandatory, prices can only go up.

As the debate for more "reform" starts heating up, I urge those shaping the dialogue to go back to 1992 and return to a rate floor.

I'm an open market type of guy - I like market competition. But it only works where there truly is a market. Where the market is the product of a legal mandate it is not open, and must be highly regulated. That is workers' compensation. I think the proof is in the history - yes we had swings in workers' compensation prior to "open rating" but since then the swings have become perilously uncontrollable.

Wednesday, July 20, 2011

South Carolina on Fee Schedules; What's the Value?

Just when it seemed that I could get away from the topic of medical fee schedules, South Carolina has to come along in the headlines with a debate about the repeal of that state's RVRBS schedule.

The state's seven-member Workers' Compensation Commission (WCC), after months of debate, voted in January 2010 to update its 2003 Medicare-based schedule to include current values and to lower the South Carolina conversion factor from $52 to $50.

Since then the WCC has come under fire from specialists to scrap its current Medicare-based fee schedule and apply multiple conversion factors to cover medical specialties. Physicians argue that the fee schedule favors general practitioners and has reduced payments to specialists.

In response, WCC has scheduled a public hearing for Aug. 15 to consider language that would give it the authority to eliminate use of Medicare's Resource-Based Relative Value Scale (RBRVS).

The WCC relies upon NCCI monitoring to determine affects on system costs.

According to NCCI, the state's average medical costs are low compared to neighboring states and since the adoption of the fee schedule total medical spending has decreased by nearly 40%. Observers indicate this was primarily due to adjustments to hospital charges.

But, as with many other states that have adopted an RVRBS system, there is minimal statistical evidence of the impact on injured worker access to care. There is evidence, as with many other states, that physicians may reduce their acceptance of workers' compensation patients.

Opponents of California's proposed RVRBS schedule have labeled that state's reimbursement level at 125% Medicare "low". Hawaii had a reimbursement schedule that was 110%, but has since amended it to a higher value. Studies have indicated that specialists are less willing to take on work comp  patients at that level of payment. Oregon apparently pays over 200% and studies reflect good specialist acceptance - though the sampling in the studies I have seen is very small and likely not statistically valid.

Regardless, the debate over how much to pay physicians misses the mark. The question is not how much, but how should services be valued. 

Does the work comp system want specialists? If so, at what level of the care equation? 

These are difficult questions that require evidence, analysis and debate, and ultimately, someone won't be happy.

Tuesday, July 19, 2011

NCCI Rate Filing for Illinois Reflects Illusory Reform Benefits

NCCI came out with an 8.8% reduction in loss costs for the post reform Illinois work comp system. The basis for the rate change was the implementation of a medical fee schedule for the state.

NCCI did not project any savings from the state's adoption of the 6th edition of the American Medical Association disability rating guidelines, a provision that allows employers to direct care to preferred provider organizations and the creation of a rebuttable presumption that an injury that occurs while an employee is intoxicated is not compensable, because the effects of these legal changes is not measurable presently.

There are some very interesting observations about this rate change - namely that the rate change was not larger because, according to Illinois experts and NCCI, many employers and carriers already contract for services at rates lower than the fee schedule.

In addition, a Centers for Medicare and Medicaid Services study has shown when government agencies reduce medical fee schedules, providers adjust for the loss of revenue by changing the "volume and intensity" of the services they perform.

Perhaps this is the gravamen of the whole "fee schedule vs. access to care" debate and the reason why medical costs eventually inflate after a "reform" that purports to control medical costs through fee schedule manipulation. The bottom line is that in a complex system such as workers' compensation, where there are many moving parts and interested parties, the opportunities to take advantage of one provision or another expand or contract depending upon the motivations generated by the law changes.

In other words, human behavior is to adapt to change - its a survival technique that we are quite adept at. When presented with a threatening situation humans will find the best course of action to either maintain or grow their relative situations.

This axiom is reflected in NCCI's observation about perceived savings from a provision of the Illinois reform bill that limits disability ratings for carpal tunnel syndrome claims to 15% in most cases. NCCI said it is expected to produce an overall savings of 0.6%. But NCCI warned: "Due to the significant reduction in benefits, there may be an incentive for claimants to seek a different diagnosis in order to circumvent the restriction on their PPD benefits for CTS-related injuries. Therefore, some of the indicated savings above may be mitigated to the extent that CTS-related injuries receive different diagnoses in the future."

In addition, NCCI notes that while physician prescribed medication is now limited by the reform bill to 100% average wholesale price (AWP) plus a dispensing fee of $4.18, since there is no definition of AWP there consequently is no control over that measure: "Note that the AWP is not subject to any law or regulation. Therefore, there are no requirements for the AWP to reflect the price of any actual sale of drugs by a manufacturer. In addition, since no control exists over the AWP, it may be subject to significant upward pricing pressures. For these reasons, limiting the reimbursement for drugs to the AWP set by the manufacturer may result in less cost savings than anticipated."

In the medical fee schedule debate, while there is convincing evidence that many specialists will reduce their intake of workers' compensation treatment claims without some sort of restriction, there is also indication that fee schedules don't really control costs in the long run because the nature of claims will morph towards those services that provide the best opportunity to increase or maintain a revenue stream. Will the changes in physician payment and medication dispensation limitations reduce injured worker access to care?

The Illinois reform fee schedule is going to provide a very interesting real time opportunity to observe and measure what the true effects are on access to care and/or physician willingness to treat workers' compensation patients.

Monday, July 18, 2011

"Trends" - Establishes Disconnect in Value of Medical

Trends in Medical Specialist Participation in Workers’ Compensation Systems – Implications for California (Levine, 2007) is a not just a summary of various studies concerning the impact of physician specialists acceptance rates of workers' compensation cases following the implementation of RVRBS fee schedules in different states, and projections of the impact such a system would have on the California system, but also is a review of the actual expense data of 13 neurologists.

Seven did not take work comp patients, six did.

"This data revealed that neurologists who did not routinely accept WC patients had an hourly practice overhead of 91% of Medicare’s estimate of neurologist hourly overhead. By contrast, we found that neurologists who routinely accepted WC patients had an hourly overhead of 295% of Medicare’s estimate. Six orthopedists who routinely accept WC patients had an average practice overhead of 247% of Medicare’s estimate for orthopedists. Similarly, a study by Brinker, et al in 20023 found that practice cost in an orthopedic group was 202% that of a Medicare patient for the same diagnosis.

"Another way of measuring the value of these factors was to compare the willingness of neurologists to accept WC patients compared to their willingness to accept Medicaid and Medicare patients. In all the study states except Hawaii, Medicare acceptance was over 90%. In all the states, however, WC acceptance was well below not only Medicare, but Medicaid acceptance. For example, in Texas, Medicaid pays only 42% of what WC pays, but four times as many Texas neurologists routinely accept Medicaid as accept WC."

The conclusion of this report is that, bottom line, whatever the fee schedule, there is inadequate coverage of physician practice expense relative to the increased burden created by workers' compensation systems.

The authors state:

"We predict that such a thorough inversion of the distribution of fees away from specialists as is currently under consideration in California, without significantly increasing overall payments, will result in markedly reduced access to specialty care for injured workers." [Emphasis original.]

I don't doubt these conclusions - they seem logical.

But remember that this report was forwarded to me as a part of my challenge that there weren't any studies that measured actual injured worker access to physician care in workers' compensation systems.

The studies that were sent to me for review invariably concluded that there would be less physician participation/acceptance of work comp cases.

And each of those studies has indicated to me that the issue of fee schedules is much, much more complex than just the conversion factor or rate of pay.

There is a disconnect between the services physicians provide in workers' compensation cases and the perception of value received by the payor. In the middle of all this is the injured worker who, because of the promise of "free" medical care (i.e. no deductible or other financial requirement) essentially gives up all control over the course and direction of care to third parties (i.e. the insurance company versus physician fight).

Friday, July 15, 2011

Prison Crowding Law May Affect WC Fraud Prosecutions

I don't know about you, but I'm sick of studies! So in taking a break from my review of various reports concerning the RVRBS debate, an interesting article this morning in WorkCompCentral News points to one of the unforeseen consequences of government budget issues.

California's well publicized budget problems and the Supreme Court's mandate to reduce state prison populations seems like it might have quite an impact on insurance fraud prosecutions and sentencing.

Assembly Bill 109, signed into law in April will require cities and counties to house in their jails offenders convicted of felonies that are not violent, sexual or otherwise deemed serious in nature beginning as early as October 1.

Already county district attorneys, whose offices recently were distributed nearly $32 million in insurance fraud prosecution money earlier this month, are saying that the lower level fraud - that typically brought against injured workers for violations such as claiming disability when there is evidence otherwise - may take a back seat to more egregious crimes.

Don Marshall, chairman of the Fraud Assessment Commission, which distributes to district attorneys funds made available under the Insurance Department's Workers' Compensation Fraud Program, told WorkCompCentral reporter Greg Jones that he thinks it is too early to tell what will happen when AB 109 takes effect, but he would be surprised if there was a considerable increase in the number of cases that went to jury trial, because district attorneys aren't able to threaten defendants with the possibility of serving time in prison.

Orange County DA Joe D'Agostino told Jones that the larger white collar crimes can still go to prison under AB 109, and regardless he feels that there is plenty of room available in county jails to house criminals that deserve incarceration.

How this plays out over the next year or two will be interesting. We're used to seeing frequent press releases about an injured worker getting busted and sent to prison for fraud, and every once in a while a larger case of white collar fraud makes its way into the headlines. Will district attorney offices now start ignoring the low hanging fruit of injured worker fraud? Will we see an increase in insurance fraud due to a lack of state imprisonment as a deterrent? What will happen with insurance fraud funding distribution that is based on a county's aggressiveness in prosecuting fraud?

San Bernardino DA David Simon said his office is just going to have to get more creative in how it approaches prosecuting workers' compensation fraud.

"We're not changing our zeal or willingness to bring new cases or to prosecute workers' compensation fraud," he told Jones.

The proof will be in the fraud assessment fund distribution next year.

Thursday, July 14, 2011

Johnson Study - Doctors Won't See Patients

Nearing the end of RVRBS report reviews! Next in the line is "RBRVS-Based Fee Schedules In Workers’ Compensation: Implications for California"(Johnson, Huth, Bush - 2002). Note that this report and associated research has already been eclipsed by other CSIMS sponsored studies - namely the Kent/Levin series previously reviewed here.

This study was commissioned by CSIMS and deals with three key issues: How do current California statistics on injured worker access to care and provider reimbursement rates compare to other states? What impact have RBRVS-based workers’ compensation fee schedules had in other states? Are there any risks associated with California implementing an RBRVS-based workers’ compensation fee schedule? All very cogent, important questions.

The opening conclusion I think is telling as it is basically what I have concluded in my prior reviews: more questions than answers, little scientific research, and likely more issues than just the fee schedule involved.

"As the project progressed, we found that these questions did not have many easy answers and in fact raised many more difficult questions. As our research will indicate, there has been little scientific research into the pros and cons of using RBRVS-based fee schedules in workers’ compensation, but what little literature there is suggests a mismatch between the benefits of an RBRVS-based system and the challenges currently facing the California workers’ compensation system. In addition, the experiences of other states suggest the potential for significant unintended consequences such as decreased access to care for injured workers and increased administrative expenses for payers and providers alike."

The conclusions reached by the Johnson study need to be taken with the proverbial grain of salt because there are assumptions that are now 9 years old and no longer true.

In addition one has to be careful relative to the descriptions of the various data elements that are used for conclusions.

For instance, the report states that according to the WCRI medical costs are the primary cost driver in California claims. But then the authors point out that medical expenses at that time comprise 41% of the total claim dollar.

What the authors really intend to state is that medical expenses, at that time, were not the principal inflationary factor of the claim dollar.

The latest data from the WCIRB (see WorkCompCentral story Medical Costs Drive Increase in Loss and Expense Payments: WEST [2011-07-11]) indicates that medical expenses are now $1 of every $3 paid by insurers in 2010, which is less than that portion of the claim dollar than in 2002, apparently - from this perspective then I have to agree that changing the fee schedule to save on medical expenses is illogical - California has already experienced a relative drop in the percentage of claim dollar that goes to medical expenses. But this may not be an apples to apples comparison.

The conclusions of this report are in line with the other reports I have reviewed for this series. First most of the conclusions concern the opinions of physicians about accepting work comp cases. Second, in the same sentence about fee schedules as a reason why physicians don't like work comp cases is the now universal finding that "excessive administrative requirements" are a barrier.

I think what is very curious is that the report states that "Actual orthopedist and neurologist participation rates in Florida and Massachusetts may have been significantly lower if not for the widespread practice of negotiating reimbursements above official fee schedule amounts in those states." What this tells me is that the market essentially corrects itself. It also tells me that surveying physicians about whether they will accept a work comp case is an incorrect method of study - as I mentioned in my original post, I am looking for a valid scientific study that injured workers in fact can not get care - not whether doctors will accept cases but whether injured workers can not find a doctor to take care of them.

This methodology - surveying physicians instead of gathering data that is presumably available through statistical agencies such as the WCIRB - is repeated in the critique of both the Massachusetts system and the Hawaii system. At least the Hawaii report authors attempted to gather data from parties other than physicians.

The authors of this study also reviewed other literature that was available at the time and the primary inflation drivers of the medical component in 2002 were identified as chiropractic and inpatient hospital care, both of which were constricted by the California 2004 reform series.

An interesting comparison is made by the authors of this report between a couple of states with low RVRBS schedules (Florida and Massachusetts) and one state with a high schedule (Oregon - 250% of Medicare). Obviously there was greater physician acceptance in Oregon, with over 95% of all orthopedists accepting work comp cases. But Florida and Massachusetts reported participation rates of "only" 79% and 88% respectively. I'm not convinced that is a marked difference, especially since the study was only able to contact about 30 physicians in Oregon...

Some notable quotes about the Massachusetts system are insightful. Regarding whether that state's remarkably low RVRBS schedule impaired access, one interviewee allegedly quipped, "No, you just have to be willing to pay the going rate for the procedure...which has nothing to do with the fee schedule rate."

All in all, this report and the study upon which it is based is a good report that demonstrates, as have the others, that physicians say they won't take work comp cases, and that fees are among several reasons why doctors don't like work comp cases.

But my statement that started this whole report review process was "I have not seen one study in any state following the restriction of fees or procedures that documents that there is a corresponding failure in the delivery of treatment to injured workers". I still haven't. I have seen many reports thus far that conclude that doctors say they won't see work comp patients at fee schedule reimbursement levels based on RVRBS - at least the "low" scale. But I have not seen yet anything that demonstrates that there indeed was an impact on injured workers.

The one differentiation about this report from the others is that while the conclusion is that physicians say they won't accept work comp cases at a low RVRBS schedule, they WILL accept work comp cases - the payer just has to negotiate the fee which to me indicates that there is in fact no access issue for injured workers based on what the fee is or isn't. Docs will see work comp patients ultimately.

Again, the question as to whether in fact injured workers have had their treatment impaired as a result of a fee schedule change is not answered.

There are still several more reports and studies that require review and critique, including a rebuttal report sent me by the California Workers' Compensation Institute (CWCI), which is an insurance based organization - the opposite end of the spectrum.

Wednesday, July 13, 2011

Hawaii Report on Fee Schedules = Best Evidence, Mixed Results

The next report that I was presented to support the argument that going to an RVRBS fee schedule in California would impair injured workers' access to care is the Hawaii report to that state's legislature, "The Medical Fee Schedule Under the Workers' Compensation Law" (Martin, 1998).

The study in this report was done pursuant to a Senate Resolution to determine "if the 110% ceiling on the workers' compensation medical fee schedule should be adjusted, whether the workers' compensation fee schedule has had a negative impact on the access to specialty care or diminished the quality of care, and what the conditions are for adjusting the fee schedule."

The background paragraph to this document explains that during the 1980s medical costs comprised about one third of all cost components of workers' compensation, but that by 1994 the percentage had risen to 42%. As a consequence laws were passed, Act 234, Session Laws of Hawaii 1995, that changed the medical fee schedule from customary charges indexed to the Consumer Price Index to a RBRVS schedule not to exceed 110% of Medicare." Since the 1995 reform, workers' compensation costs have decreased. Some lawmakers estimate that savings to employers equaled as much as $100 million in 1996 and 1997" but it was unclear to what those cost savings were attributable.

The report notes that general health was paying 135% of Medicare at the time. In addition, the report states that the decline in physician participation is attributable to both the fee schedule and bill review, or "down coding." In addition to down-coding, doctors complain that approval for medical treatment is being made by adjusters with little or no medical training."

For one thing, at the time of this report, Hawaii required that all health care providers be "qualified by the Director of Labor and Industrial Relations." The report authors note that an attempt was made to get meaningful statistics from various government agencies concerning the number of physicians in total versus those that were "qualified" but there were no statistics available, so the study authors resorted to conducting surveys, mailed to 2400 physicians, 300 chiropractors. There also was an attempt to survey employers and workers, but no data was retrieved from those surveys for various reasons.

This report seems to have more statistical relevancy to the real question of whether there was a concomitant barrier to access following the introduction of the low RBRVS schedule because survey participants were asked for the number of workers' compensation patients both before and after the fee schedule reform. But, as you will read, there are other reasons why physician practices saw a decline in workers' compensation case loads.

In one interesting observation: "Survey responses indicated that, generally, health care providers are now treating fewer workers' compensation patients than before the new medical fee schedule was instituted. Health care providers also indicated that they believe the decrease in the number of workers' compensation patients treated, is due to changes in the fee schedule level of reimbursement. Specifically, seventy-five percent of medical doctors who indicated a decrease from 1990-1995 in the number of workers' compensation patients they treated attributed the medical fee schedule as a reason for this change. ... Those who showed a decrease are mostly in individual practice. These doctors also showed a greater range of decreases in their workers' compensation. Members of group practices were less likely to have experienced a substantial decrease in workers' compensation patient load and stayed in the 1-25 percent brackets both before and after 1995." [emphasis added.]

In addition, the Department of Labor and Industrial Relations calculated a 10.3 percent drop in reported work comp cases in 1996 compared to 1995. That is a big drop for just one year. Also the majority of physicians felt that law changes caused a decrease - "The majority of health care providers responding to the survey believe that injured workers' access to appropriate health care providers has decreased because of changes in the workers' compensation law since 1995. Analyzing these responses in more detail, sixty-three percent of the health care providers practicing in Hawaii before 1995 and who had at least some experience with previous workers' compensation fee schedules believed that injured workers' access had diminished. Sixteen percent believed access had stayed the same and nineteen percent stated they didn't know." [emphasis added.]

Indicating a larger problem than just fee schedules, "A number of health care providers commented that although they currently accept all workers' compensation patients, they were finding it difficult to continue the policy....Some health care providers indicated that they prefer to screen their workers' compensation patients for complexity of injury, or availability of alternate health insurance in case payment was not received under workers' compensation." [emphasis added.]

"The most frequent, number-one, reason cited by health care providers for the change in their policy on accepting workers' compensation patients was the change in the medical fee schedule level of reimbursement. A significant amount of the group that had previously had the policy of accepting all workers' compensation patients noted that controverted claims, processing paperwork and delays in prior approval for treatment were also reasons that caused a change in their policy of accepting all workers' compensation patients."

The report makes some "logical assumptions" that I don't necessarily agree with. For instance, "If every specialist is available to every injured employee, it is a logical assumption that those injured employees would likely be provided a higher quality of care because the employees could shop around until a suitable health care provider and treatment to their liking could be found." A) Injured workers don't shop around for treatment - they go where the carrier or their attorney tell them to go; B) just because one is a specialist does not mean they provide quality care - we see this all the time in medical malpractice examples.

More interesting though, state records at the Department of Labor and Industrial Relations DO NOT indicate an influx of complaints from patients who were unable to get treatment for their work comp injuries since the RVRBS schedule was put into place. This is a significant finding in my opinion because it directly disassociates cause and effect with the access to care issue. The report says these statistics are "not convincing" but tries instead to deflect the issue: "If health care providers are choosing not to treat workers' compensation patients, then injured employees cannot continue to have the same level of access to the specialty care they once had."

In other words, the report author completely dismisses the statistical fact that there was no change in the level of complaints about access to care and instead attempts to make a "logical assumption" that is not related to the data.

About the most cogent argument this report makes against the RVRBS schedule is that Medicare treatment is directed primarily at the elderly, and treatment of injured workers is fundamentally different that treating old people, with different expectations as to out come and paperwork needed. In addition, under Medicare there can be a patient co-pay. Workers' compensation does not provide this flexibility in physician billing.

An interesting aspect of this report that would seem to support that a 125% RVRBS schedule is appropriate in that 34% felt that it took 25% more time for work comp injuries, and another 22% felt that it took 50% more time. 25% felt it took the same amount of time (the report doesn't state what the other 19% felt). Add it all up and average it, then based on time 125% RVRBS is about right, according to the results of this study. Indeed this is the conclusion of the report authors - that the law be changed to allow for 125% and not more than 130% of Medicare in the RVRBS system.

All in all, I can accept this report as more credible than the other reports thus far reviewed concerning the potential limitation of access to care as a consequence of an RVRBS system that is structured too low. However, again, this report does not substantiate that there was in fact an access to care issue in Hawaii following the change to 110% Medicare RVRBS fee schedule, only that physicians were more reluctant to take cases.

And, this report DOES continue in the line of prior reviewed reports that the issue is much more complicated than just reimbursement, and that physician participation in workers' compensation takes on much more levels of complexity beyond a fee schedule. There are serious issues concerning physician participation in workers compensation, but this report advocates for exactly what the proposal is for California - RVRBS at 125%.

Tuesday, July 12, 2011

Dembe Report Indicates More Issues to Access than Fees

The Dembe study ("Access to Medical Care for Work-Related Injuries and Illnesses: Why Comprehensive Insurance Coverage is Not Enough to Assure Timely and Appropriate Care (Dembe, Harrison - date unknown) is a review of the empirical literature concerning access questions and the fourth report forwarded to me in response to my post about lack of scientifically valid studies against the implementation of an RVRBS fee schedule in California.

The authors of the Dembe report start out by defining access to care in a more specific style than any of the reports I reviewed earlier and come up with a more complex definition consisting of three tiers: primary which means getting into the a health care system in the first place, secondary which involves things like getting timely appointments, specialist referral, etc. and tertiary which may involve lack of physician skill, failure of communication or inappropriate care.

Since insurance coverage is generally not an issue in workers' compensation (the authors estimate based on the studies they reviewed that approximately 98% of all workers have some form of workers' compensation coverage) other primary access issues include failure of employers to accurately report payroll, no work comp insurance at all, fear of employer reprisal, safety incentive programs which discourage reporting of claims, and job loss for any health issue reporting.

Lack of knowledge about how the system works by employers, employees and physicians is seen as a large barrier to primary access with a whopping 61% of injured workers surveyed in 1997 as feeling they had not received sufficient information about access to work comp services, and over 21% of workers in Florida surveyed in 1999 stating they had received no information whatsoever about work comp.

In addition, establishing AOE/COE is reported as a significant barrier to entry. In one New York study cited by the authors, 79% of 135 carpal tunnel cases were denied, but after adjudication 96% of those were resolved in favor of the injured worker after an average wait of 429 days - I find this a much more disturbing trend concerning access issues to health care for injured workers than fee schedules! In Florida it was found that 12.8% of all medical treatment had been denied at some point during a claim, due to various factors.

Secondary issues cited in a 2001 New York study concerning access in work comp cases cited by the authors include delays in payment, nonpayment, "time-consuming nature of WC cases", excessive paperwork and distrust of the work comp legal system.

One paragraph in the Dembe study notes the prior reports I have reviewed as potentially indicating that low reimbursement rates for work comp cases impact the secondary level of access (page 6). This is not an independent study and the authors do not appear to have critically reviewed the reports as I have posted earlier.

The authors do state that utilization review appears to be more aggressively applied in work comp cases than in the general health arena and that this may impact secondary levels of access.

Tertiary care issues provide unique challenges to medical care in the work comp setting, according to the authors. For example, the emphasis on return to work and restoration of vocational function generally requires intensive specialists services and tests. This level of service requires special training and unique familiarity with an injured worker's employment setting or job requirements.

In addition, "many workers report pervasive feelings of mistrust and suspicion surrounding workers' compensation medical care that can jeopardize the provider-patient trust that is essential for attaining optimal care and outcomes (citation)" leading to some injured workers to perceive their interactions with physicians as adversarial and humiliating.

Overall, the Dembe report is an excellent review of the literature that has been prepared concerning the issues of medical care delivery in the workers' compensation system. It points to many, many issues that not only increase costs in care delivery, but also decrease patient satisfaction, increase patient treatment duration (and consequently indemnity duration and amount), deter the provision of medical care and generally increase costs and decrease effectiveness throughout the work comp equation.

The report does not, however, provide an independent statistical analysis documenting that an RVRBS fee schedule prevents injured workers from getting care and in fact provides fuel to the argument that care to injured workers is a much, much more complex issue than just fees.

I do agree, however, that this is one report that should be required reading by state legislators, and regulators, any time a "reform" proposal is brought up - there are many problems with medical care delivery in work comp. Fees might be part of the equation, but fees alone are not the sole source of access issues and dealing with fees in a vacuum, ignoring all of the other "access" issues will only exacerbate problems with medical care delivery to injured workers.

Monday, July 11, 2011

Association of CA Neurologists 2005 Report - No Better

Third in the line of reports of studies that were offered to prove that access to care by injured workers would be affected by implementation of an RVRBS fee schedule in California is a report by the Association of California Neurologists - Workers' Compensation Committee, entitled "Impact of Medicare-based Workers' Compensation Fee Schedules on Injured Worker Access to Neurological Care in Texas & Hawaii" (authors unidentified, March 2005).

This study too is a telephonic interview of neurologists making inquiry as to whether they currently accept workers' compensation patients, and if they ever have why they have stopped doing so. In addition the study interviewed 114 private practice neurologists in California to determine if SB228 and SB899 had an impact on their practices.

The conclusion of the study is that nearly one-half of Texas neurologists had stopped accepting workers' compensation cases following the 2003 fee schedule implementation, and that prior to the 2002 reform 61% of all neurologists in the state took work comp cases, but that only 31% do as of the date of the report.

In addition the authors conclude that prior to institution of the fee schedule in Hawaii the participation rate of specialists in the state was 77% and that fell to 29%, which coincidentally is higher than what the state found in its own earlier study - 23%.

With regards to California, the study authors conclude that 51% of the survey population accept work comp cases post reform, compared to 80% prior to reform. (Note, these results are markedly more optimistic than the reports I previously reviewed in my two earlier posts concerning studies commissioned by CSIMS!).

The study had an extremely low population from which to draw in Hawaii, surveying only 34 physicians. This is an extremely low sample and not one that I could consider statistically valid for purposes of extrapolation to a larger population. The authors do not give us a margin of error.

The survey questions were asked of the physician's office receptionist and apparently if answers were negative the interview was elevated to the office manager "if necessary".

The study authors note that the passage of California reform in SB 228 and 889 "dramatically increased the administrative burden placed on medical providers".

According to the study, 63% of Texas neurologists "specifically cited the change to the 125% of Medicare fee schedule as the primary reason for their decision" to stop seeing work comp patients. However the study states, "other reasons providers cited for dropping out of the workers' compensation system include 'paperwork', 'hassle', difficulty with completing certification requirement', and 'couldn't collect payments from insurance company'." The report does not state whether these "other reasons" were in cited in conjunction with the fee issue, or whether the fee issue was a completely separate answer.

The report also lays out geographic impacts noting that the greatest impact was on rural areas in Texas. The authors are also critical of the certification and educational quality of the neurologists who are still accepting work comp patients, stating, "the evidence suggests that the neurologists that do still treat injured workers are actually less experienced and less qualified" noting that prior to the fee schedule change 71% were both board certified and went to school in the US or Canada compared to 52% after the change.

I have the same critical opinion of this study as I did the Levin/Kent reports: they are telephone surveys with the same attendant validity issues that were not correlated to statistical error rates, and they reviewed acceptance rates, which is not the same as actual impact to injured workers. In addition, the sample rate of the study of Hawaii neurologists is precariously low with no attempt to factor in a relative error rate on the extrapolation to a larger population. As in the Levin/Kent studies the implication is that there are other reasons beyond just the fee schedule that impact provider acceptance of work comp cases.

Friday, July 8, 2011

Levin/Kent 2008 Study Does Not Prove Access Issues

Next on my list to review in the debate about the lack of scientifically valid research concerning injured worker access to medical treatment in the ongoing RVRBS debate in California was A Methodology for Predicting Provider Participation in Workers' Compensation Medical Fee Schedules Levin/Kent 2008.

As in my critique of the Levin/Kent 2007 report (post 7/06/2011), this too was paid for by the California Society of Industrial Medicine and Surgery (CSIMS), was again a telephonic survey and the issue is whether there is an impact on physicians accepting workers' compensation cases, not whether injured workers experienced limitations in getting treatment.

What I found most interesting in this report was the conclusion that, "The four most recent states to convert to new fee schedules have provided reimbursement at an average of 211.7% of Medicare, with higher fees for specialty codes. In addition, two low-fee RBRVS states have recently raised fees, with the greatest increases going to specialty procedures, in order to try to restore access to care." The reason this caught my attention was because I expected there to be an answer to the question: did this result in greater "acceptance" of WC cases? Conspicuously, there did not even appear to be an attempt to address this question.

The authors reflect that, with the 2007 study, "a significant question remained as to whether provider participation rates were truly correlated with fee levels; whether those states that had adopted higher-multiple RBRVS fee scales actually achieved higher specialist participation levels; and whether there were other system determinants of participation." For this the authors institute a nice regression analysis to come up with determinative statistics to support their hypothesis that, yes, there was some correlation. What that correlation was, however, was not conclusively that higher fee scales achieved greater participation - this was done in a predictive model, i.e. no real data. Further, the second part of the question, whether there were other system determinants of participation, were more significantly identified than in the prior study.

The authors state: "There is growing recognition that low RBRVS fee scales do not maintain specialist participation: The four most recent states to convert to new fee schedules have provided reimbursement at an average of 211.7% of Medicare, with higher fees for specialty codes. In addition, two low-fee RBRVS states have recently raised fees, with the greatest increases going to specialty procedures, in order to try to restore access to care." 

But there is no follow up data to suggest that the reverse happened in response to higher fees - i.e. that there was an increase in provider acceptance of WC cases, and in fact recall the 2007 study that suggested, at least in Texas, there was continued decline in participation regardless of the increase in fees with the implication that issues which included the need to become "approved" and other issues may be the cause of the decline in participation.

Referencing the 2007 study: "a significant question remained as to whether provider participation rates were truly correlated with fee levels; whether those states that had adopted higher-multiple RBRVS fee scales actually achieved higher specialist participation levels; and whether there were other system determinants of participation." This question remained unanswered in the 2008 report.

Note also that the survey, as with the 2007 study, is not a tit for a tat comparison of acceptance by neurologists because the definition of "acceptance" is unconditional acceptance, or what the authors call "without significant limitations": 

"The survey process involved calling the neurologist’s office and asking whether the doctor(s) accepted WC patients. If the answer was yes, it was determined through follow up questions whether there were any significant limitations on acceptance (pre-pay requirements, severely limited appointment availability, accepting from only a single carrier or employer, etc). Following the precedent of multiple prior studies, only those neurologists accepting WC patients without significant limitations were counted as accepting." 

In my opinion, this is a serious design flaw in the study if the object of the research is to truly determine acceptance levels of physicians in work comp because we don't know how many physicians DO accept cases with limitations.

Finally the study essentially admits to a profound reason for physician non-participation - that the regulatory burden in California accounts, by itself, for an 18.8% predicted decline in physician acceptance of work comp cases.

As with the 2007 Levin/Kent report, I can not accept this research as indicative of impairment to treatment by injured workers as a consequence of conversion to an RVRBS fee schedule. The report does not measure the actual rates by which injured workers may receive or be declined treatment by a physician due to money, the report fails to conclude whether raising fees actually resulted in higher acceptance rates by physicians, and the report is highly suggestive that there are issues well beyond reimbursement rates that affect physician acceptance of workers' compensation cases.

Thursday, July 7, 2011

2007 Levin/Kent Report Raises Concerns, But Not Access Concerns

If you will recall, I opined that the medical community had not proffered any valid research reflecting that a change in California to a RBRVS reimbursement schedule would create an access issue for injured workers.

I was taken to task by Carl Brakensiek of the California Society of Industrial Medicine and Surgery (CSIMS), and Robert Weinmann (The Weinmann Report). Mr. Brakensiek offered to supply me with studies that, he said, "indicate there are substantial access problems in RBRVS states with low (below 125%) Medicare conversion factors." I promised to review each report and, if I'm wrong, admit so publicly here and write a letter to the legislature as to my findings; and if I'm right, I would still write to the legislature...

I was supplied with several studies which I listed in my post of July 5. In my opinion, to make my promise complete, each of these reports deserves time alone, and comment alone - thus each report will be reviewed in separate blog postings.

I decided to start with "Workers' Compensation Medical Fee Schedules; New Findings & Implications for California" - Levine, Kent (2007) because it was the first one I clicked on. I note that this study was funded by CSIMS. I am always suspicious of a study that reaches conclusions being advocated by the group funding the study and indeed this report raised more questions in my mind than those it seeks to answer. On the other hand, CSIMS would not be doing its job of advocating for its members and supplying studies and evidence to support its positions.

The study is comprised of a telephonic survey of 1400 neurologists in Florida, Hawaii, Maryland, Texas and West Virginia, and orthopedists in Texas, West Virginia and Hawaii to see if they would accept workers' compensation patients if their fees were set at 125% of RBRVS.

Right off the bat I'm going to admit to a bias in my review of this report: it is NOT a statistical overview of the actual rates at which workers' compensation patients get medical attention. It is a survey asking physicians whether they would accept workers' compensation patients given a fee scenario. These are two different questions requiring explicitly different modalities of research. As I mentioned earlier, the question is NOT whether a physician might see a patient, it is whether a patient was able to get treatment.

In addition, telephone surveys have inherent issues with validity. They are highly dependent on the interpretation by the interviewee of the tone of the interviewer's voice, on the honesty of the interviewee, whether the questions are open or closed, the attitude and temperament of interviewee (bad day at the office, etc.?) and a host of other issues (see

Now that I have laid out my biases and caveats, let's look at the report itself.

Levin/Kent conclude that "Every state that adopted a low-multiple RVRVS fee schedule demonstrated a markedly low rate of neurologist and orthopaedic participation in workers' compensation."

"In the two states where pre-RBRVS and post-RBRVS data are available, there was a dramatic decline in participation with the adoption of a low-multiple RBRVS fee schedule. Neurologist participation levels continued to decline in Hawaii more than a decade after it first adopted its low-multiple fee schedule. In Florida, where fees were raised three years ago to a low-multiple RBRVS level, participation among neurologists nevertheless continued to decline. Two states, Texas and West Virginia, now have neurologist participation rates of approximately ten percent. In contrast, participation in Texas was documented to be 63% a year before the adoption of a low-multiple (125%) RBRVS fee scale in 2003."

Fair enough - the physicians surveyed aren't thrilled with a low-multiple RVRBS schedule. But when you get further into the study we find some anomalies.

For instance: "The present survey also indicates that in California, specialist participation has already begun to decline. While 92% of orthopaedists and 80% of neurologists reported accepting workers' compensation patients in California in 2002, only 65% of orthopaedists and 37% of neurologists continue to do so in 2007." [emphasis added.] This points to a disconnect in the logic that a change in fee schedules affects vendor participation - there is obviously something deeper than just the fee schedule if, as in California the schedule has not yet been changed to RVRBS, physicians say they don't want to take on work comp cases anyhow!

The authors make comments on studies by the Texas Medical Association and the Association of California Neurologists comparing acceptance rates of physicians of workers' compensation patients - again both telephonic surveys of providers. Texas saw the biggest decline in orthopaedists post implementation of the 125% RBRVS, but orthopaedists were by far the largest population accepting workers' compensation cases BEFORE the low-multiple RVRBS with 73% of orthopaedists responding positively compared to only 46% of all physicians surveyed. This finding suggests other underlying reasons than reimbursement schedules and indeed, the authors note, "Perhaps the most important of these in terms of the potential impact on provider participation rates was a requirement that medical providers needed to apply to be on the state's 'Approved Doctor List'" which requires financial disclosure and additional mandatory continuing education.

In Florida the report notes that when reimbursement was a very low 83% of Medicare, 47.5% of all neurologists were accepting workers' compensation patients, but after the legislature RAISED FEES to 125% for specialists and 110% for general practitioners the acceptance rate of neurologists DECLINED to 18%. What's wrong with this picture?

According to the authors, a follow up survey reflects that the participation rate for Medicare/Medicaid patients is far higher than workers' compensation though reimbursement rates are far lower - could this be that in fact the issue is NOT reimbursement rates but some other underlying reason, e.g. administrative burden, the TYPE of patient, return to work issues, etc.? Perhaps this speaks towards a single source payment system where the physician is paid the same regardless of injury/illness causation and the medical component is removed from the indemnity component? Perhaps the issue is the trouble in actually getting paid (i.e. cash flow) as opposed to the actual amount paid?

My bottom line on this report - it is evidence that physicians may be less willing to accept workers' compensation patients depending on reimbursement schedules, but it is not evidence that there will be an access problem occasioned by reimbursement and in fact the indication is contrary: that physicians are less likely to accept a workers' compensation patient regardless of reimbursement rates suggesting that there is some other reason why physicians are less than enthusiastic about work comp cases.

In my opinion this report is not valid, scientific evidence that a change in fee schedule will result in injured workers not being able to get treatment. It is evidence that physicians' attitude is that they don't want workers' compensation patients, a fundamentally different question than whether injured workers are actually impacted.

Wednesday, July 6, 2011

Narcotics in Work Comp is a Cultural Problem

Over prescription of narcotics in workers' compensation, indeed, general health, is getting lots of publicity lately, and for good reason - the general American population is either becoming hopelessly addicted (and consequently hopelessly nonproductive) to opioids, or there is a nice underground economy that is missing taxation, or both.

The Workers' Compensation Research Institute recently released a comprehensive study, “Interstate Variations in Use of Narcotics,” which may be purchased from WCRI, which studied the use of prescription narcotics to treat pain in a 17-state study group.

States in the study were California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee and Wisconsin.

Some of the conclusions were not surprising. For instance Texas had the second highest number (10,432) of non-surgical cases with narcotic drugs prescribed in the first quarter after injury for which workers also received narcotic drugs in subsequent quarters. California was the highest with 14,455.

This makes sense because Texas and California were the most populous states surveyed, so raw numbers are going to be higher for those states.

Other statistical conclussions are more alarming. WCRI said Texas averaged 53 narcotic pills per prescription in non-surgical cases, compared to the median of 46. California topped the list with 68 pills per prescription. This is not the result of raw numbers but is a ratio analysis of the overall data.

Just recently the Institute of Medicine (IOM), in response to a request from Congress to study prescriptive narcotics in the general population, concluded that chronic pain was experienced every year by at least 116 million adult Americans, at a cost of between $560 billion and $635 billion annually ("Relieving Pain in America: A Blueprint for Transforming Prevention, Care, Education, and Research", available from the National Academies Press by calling 202-334-3313 or 1-800-624-6242 or on the Internet at

Chronic pain is extremely complicated to deal with from a medical standpoint because there are so many elements in the causation equation - from actual physical or neurological damage to comorbid psychological overlays. 

The IOM report says health care providers, insurers, and the public need to understand that although pain is universal, it is experienced uniquely by each person, and that care, which often requires a combination of therapies and coping techniques, "must be tailored" to the individual patient.

The Institute comments that pain is more than a physical symptom "and is not always resolved by curing the underlying condition."

"Moreover, people's experience of pain can be influenced by genes, cultural attitudes toward hardships, stress, depression, ability to understand health information, and other behavioral, cultural, and emotional factors," the Institute said.

Americans as a society have made great progress in convenience, and our society expects easy answers. 

The easy route for dealing with chronic pain are prescriptive pain killers - easy for physicians because medication is the path to least resistance for most patients (and for compensation by carriers) and easy for patients who either lack the fortitude or discipline to deal with the underlying cause of pain.

The WCRI study is not entirely surprising - we know there is a prescriptive pain pill problem in the United States, which of course is going to impact workers' compensation. The answer for dealing with this problem does not lie in statutory mandates or regulation, it lies in a fundamental cultural change which is going to be very, very difficult to manage, but not impossible.

An example of a deep rooted cultural health issue that has been managed to the point of positive health returns is this society's addition to nicotine - cigarettes. Through a combination of media bombardment, education, taxation, litigation, regulation (such as prohibition of smoking in public places) the public acceptance of nicotine consumption has declined markedly, and the health issues associated with nicotine consumption have improved dramatically.

The California State Compensation Insurance Fund's recent mandate that its physicians agree to limitations on prescribing opioids in order to participate in its Medical Provider Network is one attempt at challenging the culture of pills for pain. But this is only one small link in the chain of American's addiction to pills.

Increasing public awareness of the issues with opioid prescription drug abuse is a help. But to really deal with opioid issues there must be a cultural change in how we deal with, and manage pain. And, like this country's nicotine addiction, changing people's attitude is going to take some time.

Tuesday, July 5, 2011

Taken to Task for Criticizing Access to Care Arguments

In a post last week I opined that there wasn't any valid scientific studies demonstrating that the introduction of an RBRVS fee schedule would result in a mass exodus of physicians from workers' compensation, and asked that if there were such studies to forward them to me.

Carl Brakensiek of the California Society of Industrial Medicine and Surgery (CSIMS), and Robert Weinmann (The Weinmann Report) both took me to task for my statements and Mr. Brakensiek sent me 7 study reports and an article that my publication, WorkCompCentral, issued from May, 2005 about Maryland.

I have not yet reviewed these reports in any detail, and I have posted them here so that when I do review them you can "read along side" me - to either come to the same conclusions I do, or to debate my comments.

The WorkCompCentral story (Surgeons Fleeing Md. System, but No Fee Fix in Sight [10/27/05]) is not a study, and in fact does not have any facts in it to suggest that there was any actual data presented to the Maryland legislature to support the conclusion of the medical community in that the state's new Medicare-based fee schedule is driving orthopedic surgeons out of the system. Since this is not a study, nor since it does not reference any study, I will exclude it from my review.

From my brief initial review, the other articles in general concern only one aspect of the equation of access to medical care in workers' compensation cases - whether a physician would be willing to accept a workers' compensation patient for treatment. This in of itself does not reflect an access to care issue, it simply reflects that certain physicians won't provide services to workers' compensation claimants.

The other side of the equation would be a study of whether injured workers in fact DO get treatment, and/or whether treatment options have been artificially restricted by changes in physician fee schedules.

In other words, the question should not be posed to a provider whether a physician would accept a patient, but should be posed to the injured worker community whether they had difficulty finding a physician for the recommended treatment.

But such observations are premature since I have not given these reports sufficient study. Here is a list of the reports provided me, each one linked so you may read it yourself.

One or the studies, "RBRVS-Based Fee Schedules In Workers’ Compensation: Implications for California" (Johnson, Huth, Bush - 2002) was sponsored by CSIMS and involves telephonic surveys of orthopedists and neurologists.

Another of the studies, "Impact of Medicare-based Workers' Compensation Fee Schedules on Injured Worker Access to Neurologic Care in Texas & Hawaii" (authors unknown, 2005) was sponsored by the Association of California Neurologists and is a report on a telephonic survey of neurologists offices in Texas and Hawaii.

A 1998 study, "The Medical Fee Schedule Under the Workers' Compensation Law" (Martin, 1998) was prepared by the Legislative Reference Bureau of Hawaii in response to a legislative request for such study.

Three of the studies ("Trends in Medical Specialists Participation...", "2008 Model for Predicting...", and "Workers' Compensation Medical Fee Schedules...")were principally authored by Steven Levine, MD, PhD, Clinical Professor of Neurology at the David Geffen School of Medicine, UCLA.

And the final sample is a report authored by Allard Dembe, Sc.D. and Robert Harrison, MD, MPH, ("Access to Medical Care for Work-Related Injuries and Illnesses: Why Comprehensive Insurance Coverage is Not Enough to Assure Timely and Appropriate Care" - date of publication unknown).

Here was my promise to Mrrs. Brakensiek and Weinmann - I would read each report thoroughly and will comment on what I find and, if in fact these reports are valid scientific evidence of access to care issues as a consequence of fee schedule restrictions then I would state so right here, AND I would write a letter to the California legislature concerning my findings. I also promised that I will call it as I see it, and if these reports do not appropriately lead to access limitation conclusions I would also say so.

Friday, July 1, 2011

MSA - An Issue Carriers & Injured Workers Can Agree On

Typically employer/carriers and injured workers are on opposite sides of any given issue in workers' compensation, but a recent move by the federal government should align the two interests.

In January the Obama Administration instructed federal agencies to identify regulations that place an unreasonable burden on businesses. The U.S. Department of Health and Human Services responded to that order on June 6 by publishing a list of dozens of regulations that it intended to review for possible streamlining or elimination.

Medicare Secondary Payer Act rules were not on the target list.

The American Insurance Association (AIA) sent a letter to the department on Tuesday, urging it to review the burdensome reporting rules imposed by Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA).

All states are affected by the MMSEA, and it is no secret that these provisions slow down, sometimes dramatically, the claims resolution process leaving injured workers hanging without compensation many times and employer/carriers incurring needless additional expense.

The regulations that the Centers for Medicare and Medicaid Services (CMS) operates under often lack clarity, are changed frequently without sufficient notice, and overall fail to reflect the operating standards in the insurance and workers' compensation industries (e.g. what CMS considers a "mass tort claim" is substantially different than what the insurance industry does).

While the AIA deals with the regulators, a coalition of insurers and employers has also been lobbying Congress to reform Medicare reporting requirements. The Medicare Advocacy Recovery Coalition supports adoption of House Resolution 1063, known as The Strengthening Medicare and Repaying Taxpayers (SMART) Act, which would require CMS to give insurers and claimants firm guidance about how much money should be set aside in future medical settlements to protect Medicare's interest.

The likelihood of getting Congress' attention on this issue during this legislative session is not high, nevertheless the efforts of the insurance industry should be supported by groups advocating for the rights of injured workers.

I urge both insurance and injured worker lobbying groups to join the efforts to persuade the DHHS to include the MMSEA in the list of regulations that should be reviewed for efficiency modification.