Costs, ex-mods, Medicare among the topics of breakout sessions
Below is a review of several.
Doc: Unnecessary knee replacements costing WC a bundle. "There are no scientific articles, no statistical summaries that show an association between soft tissue trauma and underlying arthritis being changed or aggravated," said Dr. David Cooper, director of The Knee Center in Wilkes-Barre, Pa. Nevertheless, "people are getting knee replacements. They cost $100,000, and if they ever go back to work, they usually have permanent restrictions."
In the session, MRIs and Knee Replacements: Two Easy Targets to Cut Medical Costs, Cooper will dispel the "theory of aggravation" and explain why most work-related injuries don't warrant a knee replacement. "It's trauma to the knee which doesn't cause anatomic change," he said. "But in testimony a doctor says it aggravates the underlying arthritis ... so now they need a knee replacement."
Joined by attorney James Pocius, a shareholder with Marshall, Dennehey, Warner, Coleman & Goggin in Philadelphia, the speakers will offer strategies to medically and legally defend against unnecessary knee replacements for most injured workers.
A live demonstration of an ultrasound used on a patient with knee problems is aimed at showing workers' comp participants another way to save money while still getting optimal outcomes. As Cooper explains, MRIs are not always necessary to diagnose a knee ailment.
"Ultrasound is dynamic imaging. It's on the spot and shows the muscles and ligaments. ... It costs $160 compared to $1,000 [for an MRI]," Cooper said. "It shows almost the same information and it's instantaneous. So it can be a first line diagnostic."
Cooper said most physicians can be trained to do an ultrasound. "ER doctors, occupational medicine physicians, others can learn it," he said. "So you don't need to pay a radiologist to get almost as much information on certain body parts as an MRI."
Prevent cost leakage through better hiring. "One of the areas I see employers failing to address in today's environment is checking references," says Kathy Kukor, senior consultant for Risk International Services in Charlotte, N.C. "A lot have given up simply because, for employment references, their contacts are directed by the companies not to provide any information other than the facts; dates of employment, salary paid, reason he left ... you are shutting out an opportunity to hear a morsel of information that may help you make a decision about whether an employee is a good fit or not."
That's one of the strategies Kukor will discuss in the session, From Hire to Retire: Battling Leakage in the War on Cost Management. As she explains, hiring the right job candidate is the first step in preventing workplace injuries and illnesses.
"Some things can be done even in the world of the Americans with Disabilities Act and the Equal Employment Opportunity Commission that will help you make a decision about who you want in your employment line," Kukor said. "At the end of the day, employers generally hire who they like. Well, you've got to get enough information to make that decision."
Cost management strategies don't end with the hiring process, Kukor explained. It is a continuum that extends throughout the person's career.
"One of the greatest areas for leakage is occurring as a result of employers' failure to educate employees, managers, and supervisors on the workers' comp process and what to expect when an injury occurs," she said. "The bottom line is, bad decisions often come from confusion or fear. Fear comes from a lack of knowledge or awareness of what to expect."
Injured workers who don't get the information they need to make informed decisions may hire an attorney or ask a friend who had a workplace injury. "They get slanted information," she said.
Employers can proactively take other simple steps to prevent cost leakage. "One other area that can derail your claim in a heartbeat is having an employee treating with the wrong physician," she says. "You have to go back and critically look at how he got there. Often, it is because the employer did not have a plan in place to manage that expectation and lead the employee to an appropriate provider for the level of care that they need."
Think tank offers wide spectrum of Medicare-related topics. "The Veterans Affairs department is stepping up its collection efforts," said James Pocius, a shareholder with the law firm Marshall, Dennehey, Warner, Coleman & Goggin in Philadelphia. "I've got letters saying the law gives them almost the same rights as Medicare."
As the facilitator of the Think Tank on Medicare Issues Related to Workers' Compensation, Pocius will open the floor to issues such as Medicare set-asides, Medicare secondary payer recovery contracts, and other related topics -- including the latest VA news. The attorney said the VA is seeking additional sources of income, which could have a significant impact on the workers' comp system.
"The VA has subrogation rights we will have to be concerned with," Pocius said. "With so many veterans in the workforce, if could become a big issue."
Another big issue that may come up for discussion concerns a recent appellate court decision concerning Medicare advantage plans. Pocius said the ruling by the 3d U.S. Circuit Court of Appeals could bring about a sea change in workers' comp.
"For 10 years, there was no direct cause of action against a workers' comp carrier that settled a case, so we were not concerned with these Medicare advantage plans being notified or making sure their interest was settled before the case was resolved. Unlike Medicare, they couldn't come back after the settlement and demand payment from the carrier," Pocius explained. "The 3rd Circuit Court decision allows these advantage plans to have the same rights as the Medicare Trust Fund."
Since the decision, Pocius has had to tell his clients to respond to Medicare advantage plan inquiries. "They have to have something proving they have been paid back," he said. "Otherwise, they can come back and say, 'pay us again,' like Medicare."
A separate session will specifically address the Economics of Medicare Set-asides. A team of attorneys and insurance professionals will examine the most significant, unrecognized cost drivers and offer tools to make more successful Medicare secondary payer compliance decisions.
Mitigate the headaches of consolidation of TPA, insurers. "When you have consolidations, many times the current third-party administrator does a very bad job of communicating," says Julia Sfurm, corporate risk operations manager for Elkay Manufacturing Company in Oak Brook, Ill. "In doing that, it creates some challenges for risk managers."
In her session, After the Deal: Adjusting to Consolidation of TPAs or Insurers, Sfurm will outline some of the nightmares such acquisitions or mergers may create and how to have a smoother process. The problem often starts because no one at the acquired or merged company is aware of the impending change.
"That's not good that you're hearing about it when the entire public hears about it," Sfurm says. "Because of that, the first defense from your TPA is 'nothing is going to change.' We all know that's not true."
That lack of knowledge can create fear, which may lead some people to unnecessarily leave the company and find other jobs. Avoiding that requires preplanning.
"The problem I see is the information; the merging or acquiring group doesn't have a process that has been truly worked out," she says. "The merger is in the public eye. You're having to rely on them saying 'it'll be OK,' and you are not really sure what that means."
In terms of pending claims, such a change can have a dramatic impact. "One of the biggest issues can be the reserving philosophy," Sfurm explains. "If you have large swings in your reserves, that can upset things."
For example, a self-insured company may find state regulators look at the company differently. It can also cause problems internally if there is a chargeback system or if the claims adjusting staff is being changed. "Who is monitoring your claims?" she said.
Another potential problem concerns changing systems. "Are you going from a system that is really good to one that is not so good, like a homegrown system?" Sfurm said. "Or you may be going from a bad system to a good system. But what happens to your data going from one system to another? As the risk manager, is it your responsibility to manage both of those systems? "
But adjusting after a consolidation need not be chaotic. Having been through consolidations on both the TPA and employer side, Sfurm will outline strategies to enable a smooth transition.
How's your ex-mod? "Does your company like being average," asked Kory Wells, product director of data analytics for Milwaukee-based Zywave. "There are so many people who think an experience modification of 1.0 is good; and a mod of 1.0 is only average."
In the session, The Experience Rating Worksheet: An Ever-changing Story of your Costs, Wells will explain that knowing your ex-mod number is not enough. Knowing how low a company's mod can be -- its minimum mod -- is key.
As she explains, the "perfect" mod score is different for every company, depending on payroll classification and amounts, expected loss rates, and other formula values that apply.
"If you took the same payroll and rates and plugged into the mod formula that you had no losses for three years of experience, that is what gives you your minimum mod, also called the loss free rating," Wells explained. "If you have a .98 mod and think you are doing well but your minimum mod is a .70, you still have a huge amount of improvement that could be made. And that improvement will translate to premium savings."
A quick analysis of the ex-mod worksheet can tell a story of where improvements may need to be made. For example, there may be a frequency problem.
"Even if a company's total losses doesn't seem very high, they may have quite a few smaller losses, which is probably pointing to some sort of safety training issue that needs to be addressed, or it could point to a department within a company -- one particular issue that is causing a problem that needs some sort of attention," Wells said. "On the other hand, the numbers could tell us they have a severity issue, which means they may not have many losses but the losses they do have are becoming larger in their amounts. That may most likely point to a return-to-work issue."
Wells will explain the ins and outs of the ex-mods, what the numbers mean, and how they translate to higher or lower premiums. She says this is a good time for companies to look at their ex-mods.
"Experience rating rules are changing in most states in 2013," Wells said. "It makes it a good time to be on top of these issues. We will explore what is happening in 2013 in greater detail."
Develop a medical network to lower costs. "Significant savings can be achieved by designing your own physician network," say the panelists for a session in the Health/Medical Management track. However, "there are a number of elements that must be considered to ensure such an endeavor is cost effective."
In the session, Building a Better Medical Network, three experts will explain how a focus on quality medical care, rather than pricing, can save money in the long run.
Monica Lichenstein, the director of claims operations for Aramark; Patrick Venditti, the director of BJC Corporate Health Services for St. Louis-based BJC HealthCare; and Anita Weir, director of medical and disability management for Safeway in San Francisco will discuss ramping up the quality of a medical network. Moderating the session will be Mark Walls, vice president of claims for St. Louis-based Safety National, founder of the Work Comp Analysis group on LinkedIn, and communications chair for the National Workers' Compensation and Disability ConferenceŽ & Expo.
Each panelist has been through the process. By looking at their claims, talking to case managers, and interviewing physicians, the three were able to build their own networks -- ultimately achieving better outcomes for injured workers and lowering workers' comp costs for their companies.
The speakers will first explain what many companies are coming to understand: that quality medical care actually saves workers' comp costs in the long run. Next, they will outline a step-by-step process to build a medical network. Finally, they will explain the measurements to use to determine whether such a network is a success.
For more information, visit the conference website at www.wcconference.com.
Read more at the WorkersComp Forum homepage.
November 1, 2012
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