Column: Workers' Comp

How About a Flat Fee?

By: | February 18, 2014 • 3 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at rceniceros@lrp.com. Read more of his columns and features.

More employers wanting predictability in the fees they pay workers’ comp third-party administrators are negotiating to pay a single, flat fee for bill-review services, sources tell me. The arrangements follow from criticisms some employers, their brokers and consultants have heaped on TPAs, saying traditional TPA charges for bill-review services obscure the ultimate cost of those services.

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Under traditional arrangements, a TPA might charge an employer on a per-bill basis for each medical-provider bill reviewed. Or, they might charge on a per-line basis, tallying a fee for each expense line on a bill. They can also charge the employer according to the percentage of savings produced by the bill-review process.

The inconsistency in billing methods has fueled suspicion that some TPAs — operating in a highly competitive environment — win business by bidding to provide basic claim-handling and administration at a low cost, and then boost their revenue with additional charges.

TPA executives have countered that their billing measures are transparent, at times even arguing that brokers stir the controversy to attract consulting business. But questions remain.

TPAs also differ from one to the next in their billing formats for the broad range of other claims management services they offer. So employers with the resources to do so often pay their brokers or consultants additional sums to analyze their bills and to help them select the best TPA agreement for them.

Srivatsan Sridharan, senior vice president, product development for TPA Gallagher Bassett Services Inc., said more large employers are negotiating to pay a consistent flat, per-bill fee for all bill-review-related services for each claim. The employer then pays additional amounts for claims handling and all of the other TPA services required to resolve a claim, although the charges for those other services have tended to be more predictable than the bill-review fees.

Data collection has made it possible for TPAs to model an employer’s expected claims-management expenses and accommodate flat-fee deals, Sridharan said. Such arrangements won’t reduce the cost of managing a claim, but they can make bill review costs more predictable, he added.

In a similar vein, brokers meeting privately with TPA executives during the National Workers’ Compensation and Disability Conference® & Expo, held in late November, asked TPAs about their willingness to charge one, all-inclusive fee for an employer’s entire book of claims business, said Joe Picone, chief claim officer for Willis of North America.

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Ultimately, employers want to know the “true cost” of managing their claims and this “could be the next evolution of TPA pricing,” Picone said. “Why don’t we just say, ‘Instead of paying $1,500 per claim, my whole contract is worth $1 million or $500,000.’ ”

The mountain of workers’ comp claims data that TPAs collect could help make the broader flat-fee arrangement possible, at least theoretically, because TPAs could mine the data to predict the claims management costs an employer will generate when operating in a specific region and industry, with certain employee demographics and exposure differences.

We will have to wait and see whether innovative employers and TPAs go down that path.

But additional employer options for paying workers’ comp expenses would be a good thing. And with data increasingly available to help TPAs and employers understand claims-management costs, the time is right for employers wanting pricing predictability to seek change.

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Pharmacy Trends

Drug Dangers Beyond Opioids

Workers’ compensation payers are increasingly concerned about the risks associated with drugs prescribed in conjunction with opioid pain medication.
By: | February 12, 2016 • 5 min read
Various prescription bottles and pills

Opioids are not the only prescription drugs fueling injured worker addiction and overdose deaths.

Workers’ compensation payers are growing increasingly aware that sedative hypnotics and anti-anxiety tranquilizers called benzodiazepines are habit-forming drugs commonly prescribed for chronic pain sufferers, often in dangerous combinations with addictive opioid narcotics.

“There are extreme dangers with mixing these types of products with opioids,” said Brian Carpenter, a registered pharmacist and director of product at Healthcare Solutions, an Optum company.

The dangers include addiction and death, familiar fates met by chronic pain sufferers introduced to polypharmaceutical regimens of drugs that are neither recommended in combinations nor for long term use.

Hypnotics are sleeping pills, such as Ambien used to treat insomnia. They are among the most prescribed pharmaceuticals in workers’ compensation, according to several drug trend reports.

Chronic pain often prevents sufferers from sleeping at night, especially when the pain-relief effects of opioids taken during the day wane. That drives the prescribing of hypnotics.

Opioid consumption can also contribute to sleeplessness, making some patients agitated, Carpenter said.

About 60 percent to 70 percent of the chronic pain patients he sees suffer from sleep problems, said Michael Coupland, a psychologist at IMCS Group, which provides chronic-pain management services.

“It’s the combination of the pain and the medications they are taking for the pain,” Coupland explained. “So when they report that to their medical doctor the medical doctor often gives them a hypnotic and just throws more drugs at it instead of getting to the core problem.”

Taking as few as 18 Ambien a year alone increases the likelihood of death fourfold, said David Randolph, an occupational physician. Combining the hypnotics or benzodiazapines with opioids synergistically increases their toxicity level and increases the risk of death by more than 330 percent, he added.

“It’s not the dose or the duration that leads to the death, it is simply the drug combination,” said Randolph, who also holds a Ph.D. and researches chronic pain issues.

” … the medical doctor often gives them a hypnotic and just throws more drugs at it instead of getting to the core problem.” — Michael Coupland, psychologist, IMCS Group

Yet long-term, daily consumption of the drug combinations is common enough that he witnesses almost daily.

A common scenario involves pain suffers prescribed opioids. Weeks later when they complain of difficulties getting out of bed their doctor prescribes an amphetamine to make them more alert, Randolph said.

Then they feel anxious, so the doctor prescribes Xanax and Ambien to help with sleep, he continued.

“This is a practice pattern I see all the time,” Randolph said. “Just this past week I saw another death associated with this polypharmacy.”

The Danger of Euphoria

Benzodiazepines, or benzos, such as Valium and Xanax for treating anxiety are also commonly prescribed to patients consuming opioids.

Various forms of benzos and hypnotics are similar in structure to each other and closely related, Carpenter said.

Benzodiazepines, muscle relaxers and opioids in combination are often abused for the high they create, Carpenter said.

One reason benzos are prevalent in workers comp is they have synergistic impact when combined with opioids, enhancing the drugs’ euphoric qualities, Carpenter said. An injured worker may not initially seek that euphoria, but once introduced they may grow to desire it.

The synergy created when combining benzos and opioids, however, also boosts the potential for addiction beyond each drug’s individual capacity to become habit forming, Randolph said.

Healthcare Solutions workers’ comp claims data shows that most doctors are managing their patients well by following safe practices regarding opioid and benzodiazepine prescriptions, Carpenter said.

But the inappropriate mixture is often seen among costly chronic pain cases that drag on without resolution.

Researchers reporting in the July 2014 issue of Journal of Occupational and Environmental Medicine reviewed 11,394 lost-time claims filed in Louisiana between 1999 and 2002. They observed that despite medical guidelines advising against prescribing benzos in combination with opioids, the practice frequently occurs.

They found that adding benzos to an opioid regimen prolongs claims durations and when the two are prescribed together claims costs are three times higher than when benzodiazepines alone are prescribed. Costs are also 50 percent higher when benzodiazepines are combined with long-acting opioids than when opioids alone are prescribed.

The concomitant use of benzodiazepines and opioids has not been well studied, including within workers’ comp, the researchers stated in their report. The studies that do exist show the combinations are connected to increased risk of addiction and death, they said.

 “I don’t think I ever admit a work comp patient who is not on a habit forming sedative.” — Mel Pohl, medical director, Las Vegas Recovery Center

Discussions about death and addiction associated with opioids spread across the workers’ comp landscape before the narcotic pain relievers became a nationwide concern. The inappropriate prescribing of benzos and hypnotics, though, has not reached a similar level of attention.

“I don’t know that people are as aware of the potential dangers of benzodiazepines and sedatives as they are of the dangers of opioids,” said Mel Pohl, an M.D. and medical director at the Las Vegas Recovery Center, which treats addiction, including the abuse of opioids and other substances among workers’ comp chronic pain sufferers.

Yet “I don’t think I ever admit a work comp patient who is not on a habit forming sedative,” Pohl added.

But awareness about the abuse of benzos and hypnotics may be growing, as drug and claims costs push payers to learn more about addressing the underlying problems, such as sleep problems, that drive prescribing of the drugs.

A workers’ comp insurer, for instance, recently asked him to adopt a cognitive behavioral therapy program for treating chronic-pain claimants whose consumption of hypnotic sleep medications “seems to go on and on,” amid increasing costs, Coupland said.

“A lot of these people have been on hypnotics (and opioids) for longer than they should be,” said the insurer who asked not to be identified.

Increased discussion about drugs prescribed concurrently with opioids is also occurring as workers’ comp claims payers are increasingly agreeing to fund detox programs for injured workers who have grown dependent on opioid narcotics.

“If you are addressing opioid dependence, in my opinion, you have to address benzo and sedative dependence,” Pohl said. “To just take people off opioids and leave them on their sedatives and anti anxiety drugs is not good care.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at rceniceros@lrp.com. Read more of his columns and features.
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Sponsored: Liberty Mutual Insurance

The Doctor as Partner

Consulting clinical expertise can vastly improve disability and absence management outcomes.
By: | January 4, 2016 • 6 min read

Professionals helping employees return to work after being on disability or a leave of absence face many challenges. After all, there is a personal story behind each case and each case is unique.

In the end, the best outcome is an employee who returns to the job healthy and feeling well taken care of, while at the same time managing the associated claim costs.

Learn what most employers want from their group disability and life benefits program.

While many carriers and claims managers work toward these goals, in the end they often tend to focus on minimizing costs by aggressively managing claims to get the worker back on the job, or they “fast track” claims, approving everything and paying little attention to case management.

Aggressively managed claims can leave many employees and their doctors feeling defensive and ill-at-ease, creating an adversarial relationship that ultimately hinders return to work and results in higher direct and indirect employee benefit costs for the employer. Fast track or non-managed claims can lead to increased durations, costs and workforce productivity issues for employers.

Is it possible to provide a positive employee benefit experience while at the same time effectively managing disability and lowering an employer’s overall benefit costs?

A Unique Approach

Yes.

Liberty Mutual Insurance’s approach to managing disability and absence management focuses on building consensus among all stakeholders – the disabled employee, treating physician, employer and insurer. And a key component of this process is a large team of consulting physician specialists, leading practitioners from a variety of specialties, highly regarded experts affiliated with leading medical universities across the country.

“About 16 years ago, our national medical director, Dr. Ed Crouch, proposed that if we worked with a core group of external consulting medical specialists – rather than sending most claims for Independent Medical Evaluations – we could do a better job making disabled employees and their attending physicians comfortable, and therefore true partners in producing better disability management outcomes and employee benefit experiences,” said Tim Kastrinelis, senior vice president, Distribution Partnerships at Liberty Mutual Benefits.

“In this way, our consulting physician and the attending physician are able to work with the disability case manager, the employee and the employer to deliver a coordinated, collaborative approach that facilitates a productive lifestyle and return to work.”

The result of Dr. Crouch’s initiative has produced positive results for the clients of Liberty Mutual Insurance. This consensus building approach to managing disability with consulting physician expertise has helped achieve industry leading client retention results over the past decade. In fact, 96 percent of Liberty Mutual’s group disability and group life clients renew their programs.

LM_SponsoredContent“By getting all stakeholders on the same page and investing heavily in consulting physician specialists, we have been able to lower claim costs and shortened claim duration for our group disability policyholders. …In the end, it’s a win-win for all.”
–Tim Kastrinelis, Senior Vice President, Distribution Partnerships, Liberty Mutual Benefits

A Collaborative Approach

In the case of complex disability medical health situations, Liberty Mutual’s disability case managers play a vital role in seeking additional expertise—an area where the industry’s standard has been to outsource the claimant for independent medical examinations.

However, Liberty Mutual empowers its disability case managers with the ultimate responsibility for the outcome of each claim. The claimant and the case manager stay together throughout the life of the claim. This relationship is the foundation for a collaborative approach that delivers a better employee benefit experience and enables the claimant to return to work sooner; which more effectively controls total disability claim and absence costs.

Sending a disabled employee with complex medical needs to an external specialist may sound like a cost-effective path, but it often comes at the cost of sacrificing the relationship and trust built between the employee and case manager. The disabled employee must explain their medical history to a new clinician, which he or she is often reluctant to do. The attending physician may be uncooperative as this move can appear to question his or her treatment plan for the employee.

As a result, the entire claims process takes on an adversarial atmosphere, building major roadblocks to the ultimate goal of helping the claimant return to a productive lifestyle.

Liberty Mutual takes a different approach. Nearly 100 physicians representing more than 30 medical specialties are available to consult with its medical and claims professionals, working side-by-side with case managers.

More than 95 percent of these consulting physicians are in active practice, and therefore up-to-date on the latest clinical best practices, treatment guidelines, therapies, medications, and programs. Most of these physicians are affiliated with leading medical universities across the country. “We recruit specialists from around the country, getting the best from such prestigious institutions as Harvard, Yale, and Duke,” said Kastrinelis.

These highly-credentialed physicians help case managers focus on providing the support needed for the disabled employee to successfully return to work as quickly as appropriate. Their collaborative work with the attending physicians provides the behind-the-scenes foundation that leads to a positive claimant experience, results in a better outcome for the claimant, and more effectively reduces total claim costs.

Coordinated Care Plan

When one of these consulting physicians reaches out to an attending physician, there’s an immediate degree of respect and high regard for his or her opinion. This helps pave the way to working together in the best interest of the employee, improving treatment plans and return to work results.

In this process, the claimant is not sent to yet another doctor; instead, the consulting specialist works with the attending physician to help fill in the gaps of knowledge or provide information that only a specialist would have. Although not an opportunity to direct care, these peer-to-peer discussions can help optimize care with the goal of helping the employee return to work.

The attending physician may have no knowledge of the challenges the employee faces in order to return to work. A return to work plan created in concert with the specialist, disability case manager, employer, and attending physician can set expectations and provide the framework for a proactive and effective return to a productive lifestyle.

“Our consulting physicians bring sophisticated medical expertise to the discussion, and help build consensus around a return-to-work plan, helping us more effectively impact a claim’s outcome and costs, and at the same time provide a better claimant experience,” said Kastrinelis.

“We can work more collaboratively with the attending physician, manage expectations, and shepherd the employee through the process much more effectively and in a much more high-touch, caring, and compassionate manner. Overall, we’re able to produce better outcomes as a result of this consensus building approach.”

Better Outcomes

“Our approach – including the use of consulting medical experts – helped us significantly reduce disability costs over two years for one large health service company,” notes Kastrinelis. “We cut average short-term disability claim durations by 4.2 days in that time, while increasing employee satisfaction with our unique disability management model and collaborative, partnership approach.

How did Liberty Mutual’s unique approach lower claim costs, reduce disability duration and improve the benefit experience for one customer?

“By getting all stakeholders on the same page and investing heavily in consulting physician specialists, we have been able to lower claim costs and shortened claim duration for our group disability policyholders,” said Kastrinelis.

“Plus, we, the employee, and the employer also get the bonus of creating a better employee benefit experience. This model has shaped our disability and absence management program to more aptly reflect our core mission of helping people live safer, more secure lives. In the end, it’s a win-win for all.”

How does Liberty Mutual provide a superior employee benefit experience?

Tim Kastrinelis can be reached at timothy.kastrinelis@libertymutual.com. More information on Liberty Mutual’s group disability and absence management offerings can be seen at https://www.libertymutualgroup.com/business-insurance/business-insurance-coverages/employee-benefits.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.




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Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty, workers compensation and group benefits.
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