Jason Beans

Jason Beans is the Founder and Chief Executive Officer of Rising Medical Solutions, a medical cost management firm. He has over 20 years of industry experience. He can be reached at [email protected]

Risk Insider: Jason Beans

Compounding and Rampant Care in Workers’ Comp

By: | July 12, 2016 • 2 min read
Jason Beans is the Founder and Chief Executive Officer of Rising Medical Solutions, a medical cost management firm. He has over 20 years of industry experience. He can be reached at [email protected]

Compound prescription growth in workers’ compensation is a striking example of how the lack of consumer involvement can cause treatment to expand from reasonable to rampant care.

Compound drugs join physician dispensing, opioid overprescribing, vocational rehab and chiro overutilization to share a common story — from initial expansion, to industry and regulator response, to some degree of containment.

In each case, the provider is not doing anything necessarily illicit or illegal, and the practices themselves do serve a purpose in some specific situations.

Combining, mixing and altering a drug can make sense for patients with an allergy to a non-essential ingredient, like dyes. Patients who have difficulty swallowing oral medications may find topical, compound alternatives helpful.

But when there is an opportunity for profit — where patients have no financial incentive and/or there is no clear regulation to control costs — some providers will abuse this gap in the marketplace. Three signs of rampant medical care are:

  • Epidemic expansion
  • Questionable positive value and very real risk factors
  • Financial incentives for clinicians, consultants and other parties

California saw compound drugs, medical foods and co-packs grow in share of total medication expenses from 2.3 percent in January 2006, to 12 percent in early 2009. Pricing controls were weak then and remain so.

Seven years after that surge, independent research on efficacy is scarce. Laboratories and consultants are known to share in the profits with the prescribing physicians.

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We have seen the federal Food and Drug Administration (FDA) get involved in improving the hygiene of compounding labs, after 64 meningitis deaths were caused by contamination at a Massachusetts compounding pharmacy. But the FDA does not verify the safety or effectiveness of compounded drugs.

State oversight, not federal, will almost certainly drive the containment effort. The Texas drug formulary caused a 65 percent reduction in problematic use of “N” drugs for pain relief.

When there is an opportunity for profit — where patients have no financial incentive and/or there is no clear regulation to control costs — some providers will abuse this gap in the marketplace.

Researchers recently reported the not surprising, but depressing, finding that Texas physicians did not shift their patients to other drugs or non-pharmaceutical care. This implies that the risky prescriptions weren’t completely necessary in the first place.

Compound containment inroads can also be made at the ground-level practices of claims payer operations and managed care organizations. I have seen some medical management programs virtually eliminate opioid problems and similar progress is possible.

The extent to which pharmacy utilization best practices are currently being used to address compounding is unknown; however, we should have some data soon. The “Workers’ Compensation Benchmarking Study” just recently surveyed claims executives to understand the headway organizations are making to curb this issue as well as other rampant medicine issues.

Looking forward, I expect the industry will have a much better handle on compounding in the next three to five years, like its over-utilized predecessors.

Effectively applying past “lessons learned” will be key to reducing compound drugs’ share of the pharmacy market back to levels consistent with the very small percentage of prescriptions that actually require customization.

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Risk Insider: Jason Beans

Medicare Paves the Way

By: | April 12, 2016 • 2 min read
Jason Beans is the Founder and Chief Executive Officer of Rising Medical Solutions, a medical cost management firm. He has over 20 years of industry experience. He can be reached at [email protected]

While it’s uncommon to think of Medicare blazing a trail anywhere, it is certainly at the forefront of value-driven health care. As of January 1, 2016 the Centers for Medicare & Medicaid Services (CMS) deployed 10 alternative payment models that increasingly tie healthcare payments to value.

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With the ACA as a catalyst for change, Medicare is making assertive advances to replace the fee-for-service model we all know and love. Recent/upcoming activities include:

  • New Bundled Payment Plan for Joint Replacements – On April 1st, CMS launched its bundled payment initiative that’s designed to eliminate the significant geographic variance in reimbursements for inpatient total joint procedures.
  • First Set of Core Measures Used as Basis for Quality Payments – In February, CMS released seven sets of clinical quality measures to be used for value-based care.
  • Merit-Based Incentive Payment System (MIPS) – In January, CMS met its 2016 goal of shifting 30 percent of fee-for-service payments to value-based reimbursements; in 2018, they’re committing to 50 percent.
  • Physician Quality Reporting System (PQRS) Initiative – In 2017 physicians will receive negative payment adjustments for not satisfactorily reporting quality metrics to CMS.

One outcome of Medicare’s advancements that particularly caught my eye was reported by the Agency for Healthcare Research and Quality (AHRQ) in November 2015.

Their research indicates that hospital-acquired conditions (HAC’s) decreased 17 percent between 2010 and 2014, from 145 to 121 per 1,000 discharges, while readmission rates dropped 8 percent.

This resulted in an estimated 87,000 lives saved, and a cost reduction of $19.8 billion. These dramatic results occurred during a period of concerted effort by hospitals to reduce adverse events spurred by Medicare’s move toward value-based payment models.

Currently, the best fit for workers’ comp is Medicare’s Bundled Payment models, which set a single rate for services during an episode of care. This concept is certainly not unfamiliar to workers’ comp.

While these numbers certainly illustrate the business aspect of health care, more than that, they illuminate the striking financial and quality impact that value-based models can have on healthcare delivery.

Most compelling is that the 2010-2014 programs that drove these drastic improvements were largely Medicare’s pilot forays into value-based care.

Now that Medicare is fully implementing these programs, imagine the impact broader application could have in areas like workers’ comp.

At their foundation, value-driven models reward high quality and cost effective patient care. While Medicare has many models, there are four basic forms, three of which—Affordable Care Organizations (ACOs), Merit-Based Incentive Payment Systems (MIPS), and Capitated Rates—pose major obstacles for most workers’ comp payers today. All require significant patient volume to mitigate the providers’ risk and administrative burden, historical data and benchmarking efforts, and direction of care capabilities.

Currently, the best fit for workers’ comp is Medicare’s Bundled Payment models, which set a single rate for services during an episode of care. This concept is certainly not unfamiliar to workers’ comp.

The simplest (and oldest) model is DRGs, where hospitals are paid a flat rate for a diagnosis/procedure, regardless of treatment. We’ve also long seen case rates for physical therapy.

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Surgical episodes provide an ideal opportunity to employ bundled payments for all treatment associated with a given procedure. Other creative iterations of value-based payments could be used as well, such as the Ohio BWC’s program for knee injuries.

While there is no fast-track to value-based care in workers’ compensation, there are certainly steps we can and should take today. With Medicare paving the way through proven models and successful outcomes, it’s time we bring what’s working elsewhere into our world.

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Risk Insider: Jason Beans

‘Drive-By Doctoring’ a Reason for Value-Based Purchasing

By: | September 16, 2015 • 3 min read
Jason Beans is the Founder and Chief Executive Officer of Rising Medical Solutions, a medical cost management firm. He has over 20 years of industry experience. He can be reached at [email protected]

When asked about problems with the U.S. health care system, I often refer to a New York Times article called “After Surgery, Surprise $117,000 Medical Bill From Doctor He Didn’t Know.

The article details a patient who received a $117,000 bill from an assistant surgeon he was unaware would be aiding the surgeon. The surgeon he chose was in-network; the assistant was out-of-network and came in while the patient was under anesthesia.

In what other industry, other than U.S. health care, can you receive a service while unconscious, are given no opportunity to learn of (much less agree to) the service or price, and afterwards there is a valid expectation of owing the bill?  I cannot think of one.

The Hidden Costs in Fee-for-Service

Two typical tricks outlined in this article were:

Drive-By Doctoring: It’s very common to have an additional doctor or specialist “pop by” during a treatment. This consultation and/or surgical assist may or may not be clinically supported. In group health, the article illustrates the devastating financial impact such unexpected charges may have on a patient. In workers’ comp, it demonstrates how critical it is to carefully analyze medical charges. While most payers and service providers will certainly notice a $117,000 charge, there can and will be many smaller charges that meet the “drive-by” criteria on a bill.

Out-of-Network Subcontractors: As we’re well aware, many providers (e.g. anesthesiologists, assistant surgeons) working out of a hospital may not, in fact, be hospital employees. It can be difficult to ascertain if out-of-network providers exist at network facilities, and to predict if an episode-of-care might result in subcontractor services.  It is imperative that we find alternate ways to control these unpredictable costs.

A Value-Based Track to Transparency

These practices discussed in the article are purposeful, dishonest and costly, but they need not exist. A transition from fee-for-service models to value-based purchasing in group health, and even slowly in workers’ comp, allows payers to more easily explore pre-negotiated, all-inclusive rate alternatives. These arrangements have many advantages, not the least of which is the elimination of “drive-by-doctoring” or other hidden fees. When everyone agrees to a fair, upfront price, the opportunity and incentive to “game the system” is removed.

The benefits of cost predictability in workers’ comp are readily apparent, but the outcomes and care coordination aspects of value-based purchasing make it equally compelling. These arrangements allow payers to work with providers who meet certain performance parameters, and are further incented to ensure positive outcomes in order to keep costs commensurate with agreed-upon rates. Bundled rates also promote effective coordination amongst multiple providers who are handling varied aspects of treatment and sharing in a single payment.

It’s encouraging to see the gradual shift towards value-based purchasing in workers’ comp. And while this evolution will take time, the momentum towards a model where we do not simply reward quantity of services, but focus on a more holistic approach to patient care and healthcare purchasing is something that workers’ comp is more than capable of.

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