Wednesday, April 30, 2014

Tired of Medicine

On the heels of the National Council on Compensation Insurance coming out with a report that says in some instances medical fee schedules actually increase costs, a physician out of Santa Barbara, CA published an opinion in the Wall Street Journal that doctors can't just be doctors anymore.

NCCI found, in general, that payments by group health plans were 64% of the maximum reimbursements set by workers' compensation physician fee schedules, while the payments for surgeries performed through the workers' compensation system were 96% of the maximums. The median for evaluation and management services through group health were 89% of the maximum, while workers' compensation payments were 98% of the maximum set in workers' compensation fee schedules.

"Physicians know that they can charge fees above what is paid through group health. They know they can bill at the maximum allowable reimbursable because that's what's allowed," John Robertson, a director and senior actuary of NCCI, told WorkCompCentral. "We think in some cases that's actually driving prices up."

Maybe that's true, but I think Dr. Daniel Craviotto of Santa Barbara, CA would disagree.

Dr. Craviotto is a fellow of the American Academy of Orthopedic Surgeons (an organization to which I am a faculty member teaching workers' compensation subject matter), so I assume he also performs services in the work comp arena.

"As a group, the nearly 880,000 licensed physicians in the U.S. are, for the most part, well-intentioned. We strive to do our best even while we sometimes contend with unrealistic expectations. The demands are great, and many of our families pay a huge price for our not being around. We do the things we do because it is right and our patients expect us to," Dr. Craviotto writes.

"So when do we say damn the mandates and requirements from bureaucrats who are not in the healing profession? When do we stand up and say we are not going to take it any more?"

After noting new mandates for electronic health record adoption, declination in reimbursement rates from Medicare and other programs, and the second guessing by remote physicians who do not actually have any clinical relationship with the patient, Dr. Craviotto says he's had enough:

"I don't know about other physicians but I am tired—tired of the mandates, tired of outside interference, tired of anything that unnecessarily interferes with the way I practice medicine. No other profession would put up with this kind of scrutiny and coercion from outside forces. The legal profession would not. The labor unions would not. We as physicians continue to plod along and take care of our patients while those on the outside continue to intrude and interfere with the practice of medicine."

And yet there seems to be a huge disconnect between the physician experience and all of the other participants in the medical treatment rubric.

Because proponents of fee schedules point to studies that reflect greater inflation of medical pricing when regulation is light and there is no fee schedule in place.

Michael Monagle, director of the Alaska Division of Workers' Compensation, told WorkCompCentral Tuesday that the state's usual and customary based fee schedule is responsible for 9.5% annual increases in medical fees paid in both 2011 and 2012, compared to a 3.5% annual increase in the Consumer Price Index for health care.

Alaska is currently reviewing conversion to Medicare's Resource-Based Relative Value Scale with conversion factors.

43 states and the District of Columbia have imposed physician's fee schedules and 28 of those entities rely some RBRVS system.

The arguments are consistent whenever a pay change is proposed: doctors will leave the system, quality of care will decline, access to care will constrict, and injured workers will suffer.

Comparing general health to work comp is a red herring though. Work comp is vastly different than even Medicare due to one simple fact: lack of trust.

Workers' compensation medical services assume that either the physician is lying or the patient is lying and as a consequence there is a huge reliance on reporting.

Medicare, on the other hand, largely trusts physicians and patients, and when that trust is breached the physician is duly punished, sometimes severe enough to end a career.

I have heard from doctors time and again that they are getting out of workers' compensation. My last orthopedic visit (from one of my dumb athletic pursuits) to repair something I broke resulted in a conversation with the physician about how he is no longer accepting industrial claims.

I recently engaged an audiologist to upgrade my mom's hearing aids. He used to do a lot of workers' compensation cases, but is terminating that practice because of low reimbursements and extended latency in getting paid (after months of dunning and other collection efforts which add excessive costs to his practice).

The expectations of the workers' compensation system may be unrealistic versus the willingness of medical providers to participate.

"Fee schedules may have the unintended consequence of increasing some payments. To determine the effectiveness of fee schedules, it is important to consider market rates," NCCI concluded.

NCCI has it partially correct, but they added the term "rates."

It's not just rates, but the whole picture of medical practice market, inside and outside the physician's offices, that affect rates. At some point basic market theory of supply and demand takes over.

We just don't know where that point is ... yet.


  1. Doctors have enough to deal with, so adding the burden of contending with suspicion seems to be one too many straws for too many camels. I agree with Dr. Craviotto that the majority, even the vast majority, of physicians are trying to do their best and treat their patients. It is only a small minority of providers who are responsible for well-publicized abuses and whose actions lead to the kind of scrutiny and over-mandating that burdens everybody, not just providers.

    However, some of these mandates, such as those for electronic health records and those requiring claims administrators to accept electronic bills, are actually going to help providers once they make the transition. Yes, these electronic mandates bring greater scrutiny, but this scrutiny is even-handed and aimed at both providers and payors. The greater transparency brought by electronic records and transactions can reveal, in granular and glaring detail, exactly who does what, when, and in what numbers. The industry will finally be able to pinpoint the bad actors in the workers’ comp field, whether they be doctors who egregiously over-treat or claims administrators that consistently under-pay or pay late and that fail to comply with payment regulations. For a good parallel, look at eye-opening patterns revealed by the recently published Medicare data.

    Also, on a different tack, providers need to manage their billing policies carefully in this kind of payment landscape. For instance, I know of countless examples of providers who sign provider agreements that give away significant percentages of their fees. But these same providers won’t hire specialists, such as lien attorneys, who can recover monies at a fraction of the percentage that the providers signed away. I realize that giving away a future discount on procedures that may never be performed feels abstract compared to actively paying a lien or billing specialist. But providers must increasingly be business people too, and that means looking at numbers and results clearly.

    Full disclosure: my company, DaisyBill, submits electronic medical bills for workers' compensation in California, so I'm something of an evangelist for e-billing and for specialists. We have detailed data on the claims administrators to which we have submitted bills, and we have this data solely because of the transparency benefits of e-billing.

  2. Dr. Craviatto makes some very valid points although I can assure him that we lawyers put up with enough obstacles to earn a living.

    Would he represent a social security disability claimant when success meant that his patient won benefits and was quickly paid while the lawyer received payment greater than 1 year after his client was paid? This happened regularly to me in Colorado.

    If he practiced on the border of 3 states and was prohibited from treating any patient who travelled across state lines to see him how would he feel about that - lawyers can not advise clients who are non-residents unless the lawyer holds multiple licenses in most cases.

    What if every patient had to pay for medical services out of pocket? No insurance coverage at all. Unless we can wait a year or two or three to get paid by the government or an insurance company our clients better have money to pay us or we starve.

    I suspect that most physicians take trips for pleasure more than once per 5 to 10 years. Want to switch roles?