The workers’ compensation system looks much differently today than it did a decade ago, partly due to the opioid epidemic. Tragedies of this scale have a way of spurring unexpected outcomes bringing people together from all walks of life and disciplines. Workers’ compensation stakeholders have, and continue to experience, numerous paradigm shifts among insurers, pharmaceutical benefits management companies, and utilization review organizations. These shifts are all good; they are getting the thinking more in line with a patient-centric approach in each respective vertical.
Changes Among Insurers
Insurers have historically been a natural target of misplaced frustration brought on by system friction in workers’ compensation. They are often painted with a broad brush as callus, cold entities incapable of humanizing the consequences thrust onto someone’s life due to a workplace injury or illness. While this accurately characterizes some players in this vertical, there are others who are successfully changing their culture in how claims are perceived internally and what a successful outcome looks like in today’s workers’ compensation environment. They understand that a win does not always equate to short-term savings.
National Council on Compensation Insurance (NCCI) President Bill Donnell recently had a sit-down with Tracy Ryan, Liberty Mutual’s Chief Claims Officer and outgoing NCCI Board Chair. When presented with the question on how insurers in workers’ compensation can demonstrate their relevance and value, she responded with what some might consider a non-traditional answer from an insurer: Insurers must share real-life stories of how the workers compensation industry fulfills the “noble mission” of helping injured workers recover from work-related injuries.
Is this just marketing speak?
NCCI is now documenting real-life stories as described by Ryan. Their online catalog documents recounts of actual claims from various insurers describing scenarios in which the patient/employee is always the center of the process. Marketing speak or not, this is reflective of an agency’s push to make their focus on patients more apparent in hopes of inspiring a paradigm shift throughout a seemingly antiquated industry.
The narrative is changing…
Changes Among PBMs
Pharmaceutical benefit management (PBM) companies have the complex job of, well, working themselves out of a job (that’s my personal take). Think about it: A PBM’s success is most frequently measured by the number of inappropriately prescribed drugs they are able to intercept prior to them reaching unsuspecting injured workers. These unfilled prescriptions have a direct negative impact on a PBM’s bottom line.
CompPharma’s latest data reflects a 9.8% decline in pharmacy costs across 29 payers included in their 2017 survey. According to the PBM consortium, the decrease was the result of continued focus on improved clinical management, the expansion of utilization review and prior authorization, increased clinical involvement in the management of claims, and more structured drug alerts and alert management processes resulting in significant reductions in opioid spending.
Across the country, PBM’s have supported legislation proposing the standardization of evidence-based care by way of treatment guidelines and pharmaceutical drug formularies. This push has led to a notable change in prescribing habits in workers’ compensation playing a prominent role in process and cost efficiencies relating to pharmaceutical spending.
The added legislative and regulatory oversight of pharmaceuticals is prompting a move to non-pharmaceutical options, such as Cognitive Behavior Therapy (CBT) and activity-based treatment, for the treatment of pain. PBM efforts at every level (customer and at the state level) are effectively balancing the way prescribers think about the need to use medications based on evidence-based care standards.
The narrative is changing…
Changes Among UROs
According to California’s Department of Industrial Relations, Division of Workers’ Compensation, “Utilization review (UR) is the process used by employers or claims administrators to review treatment to determine if it is medically necessary. All employers or their workers’ compensation claims administrators are required by law to have a UR program. This program is used to decide whether or not to approve medical treatment recommended by a physician which must be based on the medical treatment guidelines.”
Due to the fact that UR is a payer’s right to review the request for treatment for medical necessity according to the state’s adopted medical treatment guidelines, the process is often seen as a detriment to the injured worker. UR is mistakenly seen as a yet another hurdle in the way of delivering promised medical care to the injured worker. As a result, leaders in workers’ compensation are urging payers to view utilization review through a more critical lens. It can no longer be viewed as a commodity, a service “thrown in” as part of a larger claims product.
“What patients need is careful, thorough UR by physicians with the time and training to foresee and speak to potential consequences of their determinations. And that costs money.” – Joseph Paduda, Principal, Health Strategy Associates; President at CompPharma
Done right, UR is not a mechanism of denial; it is assurance to employer and employee alike that only sound medical care proven to be effective according to leading scientific medical evidence and/or clinical consensus will be used for the restoration of the worker’s health.
Let’s go deeper:
Independent Medical Review (IMR) is the state-sanctioned process mandated specifically allowing injured workers the ability to appeal UR denials. Essentially, IMR holds UROs accountable to using sound scientific medical evidence and/or clinical consensus when making a determination. If UR is upheld through IMR, it can be concluded that the URO followed the appropriate steps, consulted the appropriate medical evidence, and engaged adequately qualified medical peer reviewers in pursuit of their determination.
With this in mind, envision a scenario where a URO’s IMR uphold rates are higher than the state average. This statistic is incredibly difficult to accomplish since IMR, by design, is created to poke holes in the UROs assessment allowing the injured worker a fair, unbiased, 3rd party evaluation of the medical necessity of the requested treatment protocol. For a URO to exceed state-averages in IMR uphold rates takes a diligent commitment to quality, intentional focus on fairness, and consistent consideration of the scientific medical evidence via guidelines and/or clinical expertise.
National workers’ compensation thought-leaders have been urging payers, claims administrators, and managed care vendors for years to change their focus putting patients (i.e., injured workers) at the center of the equation (as it should be). We are finally seeing a national push in this direction. Make no mistake, it not a perfect system. There is no such thing. But I personally will celebrate the fact that we are slowly, but surely, moving in the right direction.
The workers’ compensation community is being forced to come together, today more than ever before, to help mend the broken in body and spirit. And from my vantage point, the community is responding as it should.
The narrative is changing…
CompPharma data used by permission.