If a workers’ compensation payer agreed to fund genetics testing to ensure an injured worker would actually benefit from prescribed medications, the simple cheek swab and lab test would cost about $700.
But according to three speakers who promoted genetics testing during the Risk and Insurance Management Society Inc.’s recent 2015 conference, these still-misunderstood tests could save countless more dollars and improve employee health.
They said the tests would map an individual’s genetic uniqueness to help doctors understand how well a patient would metabolize specific medications. That would further help doctors prescribe drugs most probable to be safe and effective for each patient.
Pharmacogentic testing (PGX) would eliminate the trial-and-error process doctors and patients currently practice when trying to find the right medication for patients who frequently react differently to specific drugs, the speakers said.
The current process delays effective therapeutic treatment and drives up costs when a prescribed drug doesn’t have the intended impact. Trial and error also endangers lives when costly and escalating drug regimens that don’t work eventually include prescriptions like opioids, which may harm certain patients or trigger addiction, according to these genetics testing proponents.
They see PGX becoming a “standard of care” and part of an overall march toward “personalized medicine.”
Only 50 percnt of patients currently respond positively to the medications they are prescribed.
Yet with few people who have actually participated in PGX and insurers still not paying for it, skepticism remains.
Fewer than a dozen people attended the RIMS conference session on PGX, including myself and another writer.
Was lack of interest due to 9 a.m. start time in New Orleans, a late-night party town? Or was it the employee and risk manager skepticism the speakers know must be overcome before the PGX takes off, as they expressed confidence it will?
“Even the physicians aren’t comfortable with it yet,” said Geralyn Datz, one of the speakers and director of Southern Behavioral Medicine Associates. A recent poll of thousands of doctors revealed that only 28 percent of them had “some comfort level” with the testing, Datz said.
Yet the speakers made some convincing arguments for PGX’s future.
The U.S. Food and Drug Administration currently recommends genetic testing for patients prescribed 160 different medications and 15 of those drugs are used in workers’ comp in “a major way,” said Kimberly George, a senior VP at Sedgwick Claims Management Services Inc.
Only 50 percent of patients currently respond positively to the medications they are prescribed, Datz said. She thinks consumers wanting more effective health care will eventually demand the testing.
Sonny Roshan, chairman and CEO of Aeon Clinical Laboratories, said the federal Centers for Medicare & Medicaid Services is a proponent of the testing, another reason the speakers expect its eventual adoption.
Roshan is also working with a large health insurer wanting to learn more about PGX.
The signs point to a potential that doctors will eventually consult PGX results before writing prescriptions for more workers’ comp patients. But it will also take more than just doctor and patient willingness to use the tests.
Claims adjusters, for example, will have learn of their benefits and claims payers will eventually demand to see return on investment documentation.
Changing Third Party Administrators Requires Careful Navigation
Changing third party administrators provides an opportune time for employers to improve their vendor service instructions and request additional workers’ compensation claims data for satisfying needs not addressed by their legacy TPA.
“With the new TPA you are the golden child,” Linda Hoenshel, senior claims manager risk management for HD Supply told the Risk and Insurance Management Society Inc.’s annual conference held April 26-29 in New Orleans.
TPAs will work to meet a new customer’s requests if it is within their means to do so, she added.
“You don’t just one day think you are going to change TPAs and everything falls in line,” Paulette Harris-Rogers, director risk management for HD Supply
But there are also many transition timeline and budgetary issues for employers wanting to change TPAs to address.
“You don’t just one day think you are going to change TPAs and everything falls in line,” said Paulette Harris-Rogers, director, risk management for HD Supply, a company with 15,000 employees and 700 locations.
HD Supply changed TPAs in 2012 and took advantage of the transition to ask its new vendor for information it didn’t previously receive, such as litigated claims data. It plans to use the information to evaluate the performance of defense firms it contracts with as well as the plaintiffs’ attorneys it faces.
One of the biggest considerations for employers is whether to change TPAs at renewal time for their workers’ comp insurance policy or during an “off cycle,” Harris-Rogers said. Factors such as insurer involvement, workers’ comp program size and complexity, and claims frequency, will impact that decision.
For HD Supply, it didn’t make sense to change TPAs during renewal time.
Many TPAs will need 90 days to get a new program running, Harris-Rogers said. Meanwhile, a legacy TPA contract may require the employer to provide a 60-day termination notice. But a transition timeline of 60 days likely won’t provide the legacy TPA sufficient time to fulfill its duties.
The legacy TPA will need time to manage its arrangements with the employer’s insurer, which will have its own timeline and needs for practices like system mapping and claim test runs.
“It’s true, the new TPA can take 90 days to work a program and get you started, Harris-Rogers said. “However, the legacy TPA needs considerably more time. Sixty days is not enough. So if you are thinking you are going to serve a notice of cancellation to your TPA in 60 days, that is fine, but there is a lot of work that needs to be done before that time.”
Other considerations include a review of medical-provider arrangements to help ensure employees’ existing providers will not be cut off mid-treatment, notification of the employers’ payroll and financial departments, and a need to hold claims reviews with two TPAs.
There are also costs to consider such as expenses paid simultaneously to two TPAs, including fees for continuing to access data maintained by the legacy TPA and charges for the legacy organization to run off existing claims.
Changing TPAs other than at renewal time may cause the insurer to conduct a collateral review or charge a fee for a mid-term change. The claims closure rate may also drop at first, because the new TPA’s adjusters are not familiar with the employer’s claims.
But when transitioning to a new service provider, employers can benefit from the resources some TPAs have invested in technology and risk systems that provide report reviews and claims trend analysis.
It’s a great time to fill existing claims information gaps or address requests for information demanded by upper management, the speakers said.
“If there is anything out there that you think you want, now is the time to ask,” Hoenshel said. “If the answer is no, ask again. You never know what can open up.”
The Path to Accountable Care
Not many people are talking about the potential role of accountable care organizations in workers’ comp, at least not yet. But there are indications that “value-based” medical provider reimbursement and the ACO concept advanced by the Affordable Care Act will play a role in workers’ comp.
So a few industry leaders are discussing how ACOs and value-based health care might eventually reduce medical spend while improving care provided for injured workers.
ACOs come in different flavors. In general, the goal is for an ACO to coordinate the entire spectrum of care provided to a population. For a patient needing back surgery, for instance, an ACO would provide primary doctor care visits, MRIs, the surgeon, post-op hospital care, physical therapy, medications and all other necessary attention.
The ACO would do that while shouldering financial risk and being held accountable for providing outcomes measured for their expense reduction and clinical results.
Building this type of business model in workers’ comp may sound idealistic and hurdles do exist.
The idea could replace the fragmented care now typical in workers’ comp, when one specialty network provides the MRI, another the doctor, and still another provides physical therapy services. It would replace fee-for-service arrangements with bundled, “value-based reimbursement” that incentivizes providers to deliver quality care.
Building this type of business model in workers’ comp may sound idealistic and hurdles do exist.
But with many ACO initiatives already operational in group health and some showing positive results, it’s only a matter of time before a form of value-based health care purchasing emerges in comp. Results from those arrangements will help the industry build consensus on which value-based practices to adopt.
Jacob Lazarovic, an M.D., and chief medical officer and senior VP at third-party administrator Broadspire, believes the model most likely to surface in workers’ comp focuses on the bundling of care, with medical providers collaborating to provide “episodes of care” around a worker’s specific injury diagnosis.
Bundled care is sometimes thought of as a stepping stone toward accountable care, according to a paper Lazarovic authored.
A nationwide shift to ACO models won’t be easy or quick, probably occurring over years, even in group health, said Kimberly George, senior VP at Sedgwick Claims Management Services Inc.
But George is also monitoring growing employer efforts to adopt ACO models that meet employee health care needs normally provided through traditional group health plans.
Since late 2013, George has seen health plans nationwide that are Sedgwick clients asking the TPA for information that might help them provide occupational health services as part of their ACO offerings. They want data on the total cost of workers’ comp claims inclusive of all medical services and even inclusive of litigation.
These are health care systems that have implemented ACOs for their own employees and the group health needs of employees working for other employers in their communities. Now they are trying to understand how to price for occupational services.
Those familiar with how managed care practices migrated from group health to workers’ comp shouldn’t be surprised that adoption of ACO models might travel the same path.
So while discussion of ACOs in workers’ comp remains limited today, don’t get caught off guard when talk of value-based reimbursement in exchange for treating injured workers accelerates.