Universal Medical and Workers' Compensation: It's Not "If", It's "When" - California

The Affordable Care Act (ACA) is going to definitely change the landscape of medical delivery over the coming future. Medical care afforded by workers' compensation delivery systems will ultimately be merged into a universal national program, despite all the opposition along the way.

My friend, and cycling inspiration, who keeps me trying to think I can enter the Tour de France while under the influence of Starbucks coffee, David DePaolo, points out that the "fusion" may be coming slowly through legislation of unintended consequences in California.

"The concept of universal care, 24 hour care, single stop shop, etc. has been floating for a couple of decades now with very little progress.

"But the passage of the Affordable Care Act, the signing of HB 1 back in February 2009, and other Federal health related laws and regulations including ERISA, have accelerated the fusion of workers' compensation medicine and general health medicine. Outsourcing MPN [Medical Provider Networks] oversight to a health care related agency is just another step towards this outcome.

David, an expert in analyzing what's around the curve, sees the next wave of change coming to workers' compensation. For so many reasons, including the expansion/reimbursement integration of the Medicare program, the writing is on the wall on this one. 

Every time the lobbyists think that have eliminated the imminent threat of Federal intrusion, ie. Enactment of The SMART Act, the reality of which is that the regulations will eat up the statute, and also their lunch. I plan to write more on The SMART Act in the coming weeks. Maybe that wasn't so smart after all for the cottage industries that supported it.

Health Care Continues to Eat Away at Employee Earnings

Family Health Premiums Rise 4 Percent to Average $15,745 in 2012, National Benchmark Employer Survey Finds

Throughout the nation Workers' Compensation systems have been impacted by health care costs that now take a large piece of the premium dollar. Traditional health care offered by employers mirrors the same problem of economic stress. Running two parallel systems creates added costs and  delays the delivery of medical care. The recent Kaiser Survey just released for 2012 reports that costs in the health care field continue to outpace employee compensation. 

Annual premiums for employer-sponsored family health coverage reached $15,745 this year, up 4 percent from last year, with workers on average paying $4,316 toward the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2012 Employer Health Benefits Surveyreleased today.

This year’s premium increase is moderate by historical standards, but outpaced the growth in workers’ wages (1.7 percent) and general inflation (2.3 percent). Since 2002, premiums have increased 97 percent, three times as fast as wages (33 percent) and inflation (28 percent).

“In terms of employee insurance costs, this year’s 4 percent increase qualifies as a good year, but it still takes a growing bite out of middle-class workers’ wages, which have been flat or falling in real terms,” Kaiser President and CEO Drew Altman, Ph.D. said.

“Premium growth is at historic lows, which greatly benefits workers. Continuing to ensure that Americans have coverage options that are affordable is vitally important for our nation’s health,” said Maulik Joshi, Dr.P.H., president of HRET and senior vice president for research at the American Hospital Association.

The 14th annual Kaiser/HRET survey of more than 2,000 small and large employers provides a detailed picture of trends in employer-sponsored health insurance costs and coverage. In addition to the full report and summary of findings being released today, the journal Health Affairs is publishing a Web First article with select findings, and Dr. Altman authored a “Pulling It Together” column reflecting on this year’s results.

The survey reveals significant differences in the benefits and worker contributions toward family premiums between firms with many lower-wage workers (at least 35 percent of workers earn $24,000 or less a year) and firms with many higher-wage workers (at least 35 percent of their workers earn $55,000 or more a year).

Workers at lower-wage firms on average pay $1,000 more each year out of their paychecks for family coverage than workers at higher-wage firms ($4,977 and $3,968, respectively). This occurs even though the firms with many lower-wage workers on average pay less in total premiums for family coverage than firms with many higher-wage workers ($14,694 and $16,427, respectively).

In addition, workers at lower-wage firms are also more likely to face high deductibles than those at higher-wage firms. Specifically, 44 percent of covered workers at firms with many low-wage workers face an annual deductible of $1,000 or more, compared with 29 percent of those at firms with many high-wage workers. Across all employers, a third of covered workers (34 percent) face a deductible of that size, including 14 percent with deductibles of at least $2,000 annually.

“This year’s survey suggest that working families at the low end of the wage scale face significant out of pocket costs for coverage,” said study lead author Gary Claxton, a Kaiser Vice President and director of the Foundation’s Health Care Marketplace Project. “Firms with many lower-wage workers ask employees to pay more out of pocket than firms with many higher-wage workers even though the coverage itself tends to be less comprehensive.”

Health Reform and Employers

The survey estimates that 2.9 million young adults are currently covered by employer plans this year as a result of a provision in the 2010 Affordable Care Act that allows young adults up to age 26 without employer coverage of their own to be covered as dependents on their parents’ plan. That’s up from the 2.3 million in the 2011 survey. Young adults historically have been more likely to be uninsured than any other age group.

The survey also finds that 48 percent of covered workers are in “grandfathered” plans as defined under health reform, down from 56 percent last year. Grandfathered plans are exempted from some health reform requirements, including covering preventive benefits with no cost sharing and having an external appeals process. To retain this status, employers must not make significant changes to their plans to reduce benefits or increase employee costs.

Employer Expectations for 2013

In addition to the comprehensive survey conducted in the spring, employers were asked in August whether they had information about the change in premiums (or total cost for self-funded plans) for their current health plan with the largest enrollment. The average increase reported by employers who had received information for their current plan is 7 percent.

These early reports may not match what employers and workers ultimately end up paying next year, as firms can raise deductibles or otherwise change the health benefits and plans they offer to lower premiums. This year, for example, more than half (54 percent) of employers who offer health benefits reported that they had shopped around for new coverage. Of that group, significant shares switched carriers (18 percent) or changed the type of plans they offer (27 percent).

Other findings from the study include:
Worker-only coverage. Premiums for worker-only health coverage increased 3 percent in 2012 to reach $5,615 annually. Workers on average pay $951 toward this coverage.
Offer rate. This year, 61 percent of firms offer health benefits to their workers – statistically unchanged from last year. 

Cost-sharing for office visits, emergency care and drugs. Covered workers facing co-payments for in-network physician office visits on average pay $23 for primary care and $33 for specialty care. For emergency-room visits, average co-pays are $118. For drug plans with three or more tiers, average co-pays are $10 for generic drugs, $29 for preferred brand-name drugs, $51 for non-preferred brand-name drugs, and $79 for specialty drugs.
Domestic partner benefits. In 2012, 31 percent of employers offer health benefits to same-sex domestic partners, up from 21 percent three years earlier. This year 37 percent of firms offer such benefits to unmarried opposite-sex partners, up from 31 percent in 2009.
Flexible Spending Accounts and Pre-Tax Premiums. Large employers are more likely than small ones to allow workers to pay their share of premiums with pre-tax income (91 percent, compared to 41 percent) and to contribute pre-tax dollars to Flexible Spending Accounts (76 percent, compared to 17 percent).

Now in its 14th year, the survey is a joint project of the Kaiser Family Foundation and the Health Research & Educational Trust. The survey was conducted between January and May of 2012 and included 3,326 randomly selected, non-federal public and private firms with three or more employees (2,121 of which responded to the full survey and 1,205 of which responded to a single question about offering coverage). A research team at Kaiser, HRET and NORC at the University of Chicago, led by Kaiser’s Gary Claxton, designed, conducted and analyzed the survey. For more information on the survey methodology, please visit the Survey Design and Methods Section at http://ehbs.kff.org.

....
For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

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California Takes an Austerity Axe to Workers Compensation

Governor Jerry Brown
(Photo credit: Wikipedia)

Tonight the California Legislature took an axe to its ailing workers' compensation system, as part of major election year austerity measures. Targeting both medical and legal costs of operating the program, at the encouragement of Governor Jerry Brown,  Democratic legislators pushed through changes (SB863) with little public discussion.

Click here to read: California Lawmakers Overhaul Workplace Insurance (Reuters)

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The Great California Trade Off 2012

Rumors spread like wildfire this week as alleged secret back-room dealing continued in an effort to reform the failing California workers compensation system, yet again. The great trade-off of 2012 appears to be a major move to control and limit medical delivery and disability benefits at all cost.

Of critical importance is the fact that as goes California so goes the nation. Historically, changes made in California will slowly advance across the country and become adopted as a national wave of reform.

What has been leaked to the media, and some stakeholders, by a coalition of Labor and Industry management representatives, is yet another bandaid attempt to to control medical delivery in an effort to reduce both treatment costs, and ultimately reduce the number of cases utilizing the system.

While on the books it looks great that injured workers may get a potential increase of $700 million in increased permanent disability benefits, the trade-off is the imposition of a stringently controlled, speeded-up, and rationed medical benefits.

For employers to truly benefit from a Workers' Compensation program that works, employees need to receive the best medical treatment available to cure and relieve their work related medical conditions, and an adequate program of disability payments.

The proposed reforms limit medical choice, limit medical protocols, take away disability modifiers and impose penalties for out of network medical care in the name of expediency.

The problems facing California are not unique to that state. The entire nation, both within the workers' compensation system, and without, are facing similar issues.

One would hope that California would set a high standard for the nation, such as it attempted to do with heightened requirements for automobile emission testing and safety. However, to eliminate treatment options available to injured workers merely for the purpose reducing costs is a fast track program that ignores the need to achieve the best medical result and provide adequate compensation to injured workers.

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CMS Rules Out TENS Units for Low Back Pain

"TENS is not reasonable and necessary for the treatment of CLBP under section 1862(a)(1)(A) of the Social Security Act."

The Centers for Medicare and Medicaid (CMS) has issued a ruling that will impact on the payment of proceeds in Workers' Compensation Medicare Set Aside Agreements (WCMSA). CMS has ruled out the use of TENS (Transcutaneous Electrical Nerve Stimulation) units for the treatment of chronic low back pain.


"For those WC [workers' compensation]cases that were not settled prior to June 8, 2012, and where the  WCMSAs proposal includes funding for TENS for CLBP [chronic low back pain] as part of the WCMSA, CMS  will re-review the cases and remove pricing for TENS for CLBP. (Regional Offices shall  obtain from submitters requests for a case re-review, along with a signed statement  indicating a settlement had not occurred prior to June 8, 2012.)"

Case law throughout the country has been divided on whether TENS units should be authorized to cure and relieve low back pain. 

Click here to read: Decision Memo for Transcutaneous Electrical Nerve Stimulation for Chronic Low Back Pain (CAG-00429N)

Click here to read: Impact of the Removal of coverage of Transcutaneous Electrical Nerve 
Stimulation (TENS) Units for Chronic Low Back Pain (CLBP) on Workers’ Compensation Medicare Set-Aide Arrangement (WCMSA) proposals – INFORMATION

.....
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Citizen Groups Urgently Request Court to Stop Body Scans by TSA

English: Poster prepared by the Transportation Security Administration summarizing the operation of the Millimeter Wave (MMW) whole body imaging scanner. (Photo credit: Wikipedia)

Whole Body Imaging (WBI) at US airports by The Transportation Safety Administration (TSA) has raised urgent health concerns over causing increased rates of cancer among airport workers and passengers. Parties have requested the US Court of Appeals for the District of Columbia to address the Court's mandate of one year ago that TSA propose formal rule making authority to address the health issues raised before the continued use of the TSA WBI scanners that are used in US airports.

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Illinois Man Sentenced to 10 Years in Prison for Clean Air Act Violations Involving Asbestos

(Photo credit: Wikipedia)

Duane “Butch” O’Malley, 59, of Bourbonnais, Ill., who was convicted by a federal jury on September 26, 2011, for the illegal removal, handling and disposal of asbestos from a Kankakee building in August 2009, was sentenced to 10 years in prison by Federal District Court Judge Michael McCuskey. O’Malley was also ordered to pay restitution of $47,086 to the U.S. Environmental Protection Agency (EPA) related to the clean-up of illegally disposed asbestos and ordered to pay a fine of $15,000. Asbestos is a mineral fiber that has been used commonly in a variety of building construction materials. When asbestos-containing materials are damaged or disturbed by repair, remodeling or demolition activities, microscopic fibers become airborne and can be inhaled into the lungs, where they can cause serious health problems, including lung cancer and mesothelioma.

“Asbestos must be removed in a safe and legal way in order to protect people's health and reduce the risk of exposure,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The defendant’s actions endangered the health of his workers and the surrounding community and the sentence shows that those who violate critical environmental safeguards will be prosecuted.”

“To increase his profits, a jury found that O’Malley knowingly disregarded federal environmental laws that require asbestos-containing materials be safely removed and properly disposed,” said U.S. Attorney Jim Lewis, Central District of Illinois. “This sentence is a consequence of the defendant’s flagrant disregard for his workers, the public, and the environment in exposing them to dangerous airborne asbestos fibers.”
During O’Malley’s trial, the government presented evidence that O’Malley, owner and operator of Origin Fire Protection, was hired by Michael J. Pinski in August 2009 to remove asbestos-containing insulation from pipes in a five-story building in Kankakee, Ill. that was owned by Pinski through his company, Dearborn Management, Inc. Evidence was presented that neither O’Malley nor his company was trained to perform the asbestos removal work and that O’Malley agreed to remove the asbestos insulation for an amount that was substantially less than a trained asbestos abatement contractor would have charged to perform the work. Further, O’Malley arranged for James A. Mikrut to recruit and oversee workers to remove the asbestos.

The government’s evidence showed that various provisions of the Clean Air Act (CAA) and EPA regulations were violated, including, failure to properly notify the EPA, failure to have trained on-site representatives present, failure to ensure the asbestos insulation was adequately wetted while it was being stripped and removed, failure to mark vehicles used to transport the asbestos containing waste material and failure to deposit the asbestos in a waste disposal site for asbestos. Instead, the asbestos insulation was stripped from the pipes while dry, and then placed in more than 100 large, unlabeled plastic garbage bags. The bags were then dumped in an open field in Hopkins Park, resulting in soil contamination and exposing the workers hired by O’Malley to dangerous asbestos-laden dust.

Under the CAA there are requirements to control the removal, handling and disposal of asbestos, a hazardous air pollutant. Any owner or operator of a renovation or demolition activity which involves removal of specified amounts of asbestos-containing material must comply with the EPA regulations.

O’Malley was charged in June 2010 with five felony violations of the CAA, along with Michael J. Pinski, 42, of Kankakee, Ill., and James A. Mikrut, 49, of Manteno, Ill. Pinski entered a plea of guilty on Aug. 19, 2011, to one count of violation of the Clean Air Act. Mikrut pleaded guilty on Aug. 24, 2011, to five counts of violation of the CAA. The sentencing hearings for Pinski and Mikrut will be scheduled at a future date.

The charges were investigated by EPA’s Criminal Investigation Division, with assistance from the Illinois Environmental Protection Agency and the U.S. Environmental Protection Agency’s Superfund Division. Assistant United States Attorney Eugene L. Miller and Special Assistant U.S. Attorney James Cha are prosecuting the case.

More information about EPA’s criminal enforcement program: http://www.epa.gov/oecaerth/criminal/index.html

....
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Why Cases Don't Settle in Washington State

Guest Blog
By Kit Case of Causey Law, Washington


The Size of the Check Points the Way
In Washington State, the majority of workers’ compensation claims are “State Fund” claims managed by the Department of Labor and Industries (Department), with perhaps a third are comprised of “self-insured” claims managed by third-party administration companies under the oversight of the Department. In “State Fund” claims, managed by State employees, benefits are paid from monies received from both workers and employers – - Washington is the only state where workers and employers each pay half of the medical insurance premiums. When a dispute arises in a claim, the aggrieved party can file an appeal to the Board of Industrial Insurance Appeals (Board), another State agency. When an appeal is filed with the Board, the Department is represented by the Office of the Attorney General, yet another State agency.


Since the economic crisis hit Washington, as it has in every other state in the union, the Department of Labor and Industries has become very cautious concerning any expenditures.


Since the economic crisis hit Washington, as it has in every other state in the union, the Department of Labor and Industries has become very cautious concerning any expenditures. After all, audits have found mis-spent money — nothing worthy of headlines, but the media loves a good fraud story as much as they love a government waste story. Fraud investigations and video surveillance have increased dramatically in recent years at great expense to the Department with minimal economic benefit. The Department was recently found to have spent a significant sum on no-show fees to independent medical examination companies without recouping those charges from the claimants who failed to attend the examinations or, in some of the cases, without properly notifying those companies to avoid the charges when a cancellation was known to have occurred. The end result of the Department’s caution is that benefits clearly payable to a claimant are being delayed or denied simply based on the amount of money at stake.


Payments of minor amounts can be made by Department claims managers at their discretion, based on the records on file. Amounts over a few thousand dollars, however, trigger the need for supervisor review and approval before payment can be made. Consequently, we are working much harder to obtain payment administratively because the Department increasingly requires proof of entitlement to benefits “beyond a reasonable doubt” rather than simply based upon the opinion of a treating physician. One doctor’s opinion of a worker’s inability to work seems no longer enough to establish entitlement to benefits. We increasingly face roadblocks to payment in cases where the Department concocts an issue over whether the inability to work is related to the covered injury or condition or is instead due to some pre- or post-existing condition, even if the disabling condition is clearly shown to be related to the original injury or the treatment procedures for that injury. If payment or authorization for treatment for a condition is denied, we are forced to demand an order be issued. We then file an appeal, and off to litigation we go.


In the current economic climate simply the amount of money involved increasingly drives the decision-making process at every administrative level.


The paralegals and attorneys at our firm work diligently to document the benefits we are seeking and the medical support for the claims we are making. In some cases, the monetary benefit at issue is a fairly significant amount. In the current economic climate simply the amount of money involved increasingly drives the decision-making process at every administrative level. Denials are much more common when a significant sum is at stake, regardless of the validity of the claim. We encounter a “make them prove it” attitude, forcing cases to go through time-consuming and expensive litigation rather than being resolved through mediation discussions or agreement between the parties.


Yesterday, I received phone call apology after a denial order had been issued, expressing condolences but the hope that we will be able to prevail on appeal. Today, I was told by an Assistant Attorney General that she would likely not be able to get authority from her client – the Department — to accept our settlement offer due to the amount of money at issue – “the case will just have to be litigated.”


I can accept these denials when there is a genuine dispute over the facts, over whether a claimant is entitled to the benefits or not. I cannot accept it when the answer is simply “it’s too much money.” I would prefer the other side tell me why my argument lacks merit, tell me that I am wrong in my belief that the claimant is entitled to the benefits at issue, tell me where the hole in my case is – anything – but, please, don’t just say that it’s too much money. That is not a reason for a State Agency which, unlike an insurance company, has no inherent profit motive, to deny benefits.


Consider the relatively low values in workers’ compensation claims: 60 – 72% of pre-injury wages as wage-replacement compensation; surprisingly small awards for permanent impairment, with no consideration given to the impact on lifestyle or earnings ability. If there is a significant sum at stake, it is because of YEARS of delay, or years of benefits at issue, not because the claimant is lucky or greedy. The claimant didn’t win the lottery; he or she was simply injured on the job and denied benefits when they were most needed. That required hiring an attorney, and in many cases expended large sums of money in efforts to support their case. The significant sums often at issue in these cases do not make claimants RICH, nor do they make them WHOLE. They only provide the limited measure of compensation that our workers’ compensation system allows.


Don’t add insult to injury.
My message to our State: Don’t add insult to injury. Show claimants the respect they deserve and promptly make decisions in their claims based on the merits of their arguments and the evidence presented, without being influenced simply by the amount of the check that may be issued.


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Workers Compensation Pharmaceuticals Targeted For Reform

Ritalin (Photo credit: Wikipedia)

An insurance based research organization, the Workers Compensation Research Institute (WCRI), has published a report concerning newly adopted State regulations limiting the prices paid for doctor-dispensed drugs (repackaging) and comparison costs between prescription medication and similar, less costly, over-the-counter (OTC) drug costs. WCRI also reports on the costs between brand-name drugs and generic prescriptions.

The study examines the results of a change to the California statute that has become a model for many other states. Critics of the regulations express concern that many patients will not get needed medications if they do not get them at the physicians’ offices.

The study, Physician Dispensing in Workers’ Compensation, examines physician dispensing before and after a 2007 change in the California statute that governed the prices paid to physician-dispensers. Prior to the statutory change, physicians typically charged much higher prices than pharmacies for the same medication. For example, for the most common drug, Vicodin®, physicians were paid $0.85 per pill compared to $0.43 for pharmacies—nearly double the price. After the reforms, physicians were paid $0.52 per pill compared to $0.48 for pharmacies. After the law changed, physicians were paid prices for prescription medications that were similar to those paid to pharmacies for the same medication.

This study finds that:

· physician-dispensed drugs became increasingly common in most states that permit physician dispensing;

· prices paid for physician-dispensed drugs were often substantially higher than if the same drugs were dispensed by a retail pharmacy;

· prices paid to dispensing physicians rose rapidly for medications that were commonly dispensed by physicians, while the prices paid to pharmacies for the same drugs changed little or fell.

One of the chief concerns expressed by supporters of physician dispensing (in California and in other states) was that doctors would stop dispensing needed prescriptions when it became less profitable. However, the California post-reform experience shows that physicians continued to dispense prescriptions, even when the prices paid were lower. Before the reforms, 55 percent of all prescriptions were dispensed at physician offices. Three years after the reforms, 53 percent of all prescriptions in California were physician-dispensed so patients had similar access to physician dispensed medications, but at a much lower cost.

Robert Ceniceros, a reporter for Business Insurance, reported, "...But critics contend such price regulations may discourage doctors from dispensing drugs and discourage patients from getting the prescription drugs they need."

The report also examines several other concerns expressed by supporters of physician dispensing. One is that spending on prescription drugs might increase if a California-type reform were adopted. They argue that physicians almost always dispense less expensive generic versions of drugs, while pharmacies dispense both brand names and generics. The study found that for the specific medications commonly dispensed by physicians, generics were almost always dispensed by both physicians and pharmacies. In many states, when generic drugs were dispensed, physician-dispensers were paid much higher prices per pill than pharmacies for the same prescription.

The data used for this study include nearly 5.7 million prescriptions paid under workers’ compensation for approximately 758,000 claims from 23 states over a period from 2007/2008 to 2010/2011. The 23 states in this study represent over two-thirds of the workers’ compensation benefits paid in the United States. These states include Arkansas, Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. Several of the states in this study (Arizona, California, Georgia, South Carolina, and Tennessee) recently adopted reforms aimed at reducing the prices of physician-dispensed drugs.

The WCRI is selling the report in electronic format for $45.00.

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