Part III California SB 863, a Guide to Building and Monitoring Networks with Intelligence

by Margaret Wagner and Karen Wolfe

California has defined how medical networks in Workers’ Compensation should be structured and managed. Part I and Part II of this series described how California’s SB 863 LC 4616 (b) (2) and LC 4616 (b)(3) takes medical provider network directives to a new level. The key imperative is, “Every MPN must establish and follow procedures continuously to review the quality of care, performance of medical personnel, utilization of services, facilities, and costs. However, a few additional key points should be considered when selecting and monitoring medical providers for the California MPN or any network.

Beyond legislation

Escalating problems in the industry with Opioid overuse and abuse, as well as physicians who are dispensing medications from their offices are additional factors that must be considered. While the California SB 863 legislation does not address these issues, the data should be scrutinized to identify physicians who demonstrate unfavorable prescriptive practices. Analyzing the data to evaluate physician performance in that regard is essential to vetting physicians for membership in a network. It is also crucial to monitoring networks going forward.

Opioid over-prescribers

Workers’ Compensation literature is replete with information about Opioid overuse and abuse with its disastrous human and resource waste. Unfortunately, measures taken to curb inappropriate prescribing behavior are few and vary widely across the country.

Simply stated, the best way to reduce Opioid abuse is to avoid Opioid over-prescribers. Analysis of the data will identify the perpetrators. They should never be a part of a Workers’ Compensation medical network.

Back to California - CURES

California has a program that approaches the problem by monitoring patient utilization of prescribed Schedule II drugs and making that information available to authorized prescribers and distributors (pharmacies) of controlled drugs.

California’s program is called CURES (Controlled Substance Utilization Review and Evaluation System, and PDMP (California Prescription Drug Monitoring Program). [1] The California Department of Justice, has a Prescription Drug Monitoring Program (PDMP) system which “allows pre-registered users including licensed healthcare prescribers eligible to prescribe controlled substances, pharmacists authorized to dispense controlled substances, law enforcement, and regulatory boards to access timely patient controlled substance history.

The California Attorney General's Office said that if doctors and pharmacies have access to controlled substance history information at the point of care it will help them make better prescribing decisions and cut down on prescription drug abuse in California. The role of the CURES/PDMP entrusts that well informed prescribers and pharmacists can and will use their professional expertise to evaluate their patients’ care and assist those patients who may be abusing controlled substances.

The state’s database known as the Controlled Substance Utilization Review and Evaluation System (C.U.R.E.S) contains over 100 million entries of controlled substance drugs that were dispensed in California. Each year the CURES program responds to more that 60,000 requests from practitioners and pharmacists. The online CURES/PDMP system will make it much easier for authorized prescribers and pharmacists to quickly review controlled substance information via the automated Patient Activity Report (PAR) in an effort to identify and deter drug abuse and diversion through accurate and rapid tracking of Schedule II through IV controlled substances.”
 

Submission of Controlled Substance Data

Pursuant to Health & Safety Code Section 11190, and Business & Professions Code Section 1170, all licensees who dispense Schedule II through IV controlled substances must provide the dispensing information to the Department of Justice on a weekly basis in a format approved and accepted by the Atlantic Associates Inc.(AAI),and the DOJ. Similarly, pursuant to California Health and Safety Code Section 11165(d), dispensing pharmacies and clinics must provide weekly dispensing reports to the DOJ on Schedule II, III, and IV prescription drugs.

For purposes of creating an intelligent MPN, insure any physician under consideration for an MPN in California is a member of CURES/PDMP. That notwithstanding, the data should be monitored continuously to determine actual performance.

Physician-dispensed medications

Another prescription abuse issue not addressed by the California legislation is physician-dispensed medications. While it is portrayed as a patient convenience, and probably is, the medications are prepackaged and extraordinarily costly. Once again, this practice can be monitored in the data. Bills reflecting drugs dispensed by the treating doctor are not monitored by Pharmacy Benefits Managers (PBM), rather, they appear in normal provider billing.

Networks with Intelligence

All medical provider networks serving any jurisdiction should analyze integrated data, meaning all data associated with claims. Integrated data is sourced from claims level systems, bill review systems, PBM systems, and other such as utilization review to understand the broad spectrum of claims and all individuals, organizations, and events touching them. The goal is to select best-in-class doctors by objectively identifying excellent provider performance.

Margaret Wagner is President and CEO of Signature Networks Plus, Networks with Intelligence™. She is considered an expert in network selection, monitoring and management, thereby creating Networks with Intelligence for clients. MWagner@signaturenetworksplus.com

 

Karen Wolfe is President and CEO of MedMetrics®, LLC, a Workers’ Compensation analytics company. MedMetrics scrubs and enhances provider data in systems, integrates the data from organizations’ disperse systems, then analyzes, scores, and monitors medical provider performance. MedMetrics also offers online “apps” that link medical analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

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[1] http://oag.ca.gov/cures-pdmp

 

Part II California SB 863, a Guide to Building and Monitoring Networks with Intelligence

by Margaret Wagner and Karen Wolfe
 

California has defined how medical networks in Workers’ Compensation should be structured and managed. Part I of this series described how California’s SB 863 LC 4616 (b) (2) and LC 4616 (b)(3) takes medical provider network directives to a new level. The key imperative is, “Every MPN must establish and follow procedures continuously to review the quality of care, performance of medical personnel, utilization of services, facilities, and costs.

California SB 863

The emphasis on network review is a chief imperative of SB 863, effective January 1, 2013. Many directives in the bill require continuous data monitoring to discover provider and network compliance and non-compliance. Some of the directives that require continuous attention are:
·       Chiropractors are limited to a 24 adjustment maximum LC 4600(c).
·       MPN’s must have geo-coding of network physicians, updated every four years to insure access requirements are fulfilled.
·       LC 4616 (b)(2) and LC 4616 (b)(3) state every MPN must establish and follow procedures continuously to review quality of care, performance of medical personnel, utilization of services, facilities, and costs.
·       Anyone can complain, initiate an investigation, and petition to suspend or revoke an MPN.
·       Injuries while under unapproved, non-MPN care are no longer compensable!
·       Multiple conditions of escaping the MPN, non-MPN payment, and disputes must be monitored.
·       Home Health Care must be prescribed by an MD or DO.
·       MPN’s are approved for four years from date of the most recent application or modification.

Provider performance analysis

Medical provider performance must be analyzed and monitored not only for compliance with SB 863, but also for acknowledgement of the nuances of Workers’ Compensation in the treatment process. Work loss and disability payments, return to work and modified work, claimant legal involvement, along with frequency, duration, and costs of medical services should be analyzed and scored for individual providers, groups, and facilities, whether in California or another jurisdiction.

Provider data issue

A problem confronting many organizations is their medical provider data is insufficient, making accurate analysis impossible. Unfortunately, most provider records in claim systems and bill review systems is severely lacking in quality and comprehensiveness.

Until now, these records were used only to pay bills, consequently, name, address, and FEIN (Tax ID) were adequate. Now, however, because of SB 863 and increased attention to the medical portion of claims nationally, much more information is needed.

Duplicate records

Most systems contain duplicate provider records. Slight differences in data entry create multiple records for the same provider, each associated with different claims. Under those conditions, provider analysis is inaccurate and incomplete. Such duplicate records must be scrubbed and merged before beginning performance analysis.

Medical specialty

Medical specialty or specialties should be included in provider records in the data. Those providers certified in a specialty should be compared with others who are similarly certified. Without the provider’s specialty, analysis of performance is non-specific and often misleading.

For instance, pain management doctors’ performance should be compared to that of other pain management doctors, rather than dermatologists or internists. Pain management physicians often receive cases when they are growing more complex and already costly. Analyzing providers of similar specialties is a matter of comparing “apples to apples”.

Differentiating Individuals

Medical providers who are members of groups or facilities should be analyzed and selected for networks individually even if the group or facility is approved. Some believe all members of a group should be included in the MPN when the group is approved. Actually, individual members might be problematic and automatic approval should not be guaranteed.

Currently many doctors and other providers submit bills under a single Tax ID. Measuring collective performance quality is not acceptable for a network with intelligence. The way to differentiate individuals is to analyze their unique performance using specific identifiers such as the state medical license number or NPI (National Provider Identification).

Networks with ROI

Whether complying with California SB 863 or building Workers’ Compensation medical networks anywhere in the country, developing quality networks will return huge savings. Medical providers, especially doctors who score poorly in comprehensive data analysis drive complexity, high costs, and poor outcomes.  Those should be avoided and injured employees should be directed to best in class doctors to receive the best medical care with the best medical and employment outcomes. The business of developing and managing Networks with Intelligence should be given high priority.

First steps

The first step in building quality medical networks is to scrub and enhance medical provider data in the organization’s systems. The next step is selecting best practice providers based on integrated and comprehensive data associated with the claim. Developing and monitoring medical networks requires analytical knowledge and technical skill. Because internal resources are often limited, a practical solution is to outsource to the experts for provider performance analytics and continuous monitoring.

Margaret Wagner is President and CEO of Signature Networks Plus, Networks with Intelligence™. She is considered an expert in network selection, monitoring and management, thereby creating Networks with Intelligence for clients. MWagner@signaturenetworksplus.com
 

Karen Wolfe is President and CEO of MedMetrics®, LLC, a Workers’ Compensation analytics company. MedMetrics scrubs and enhances provider data in systems, integrates the data from organizations’ disperse systems, then analyzes, scores, and monitors medical provider performance. MedMetrics also offers online “apps” that link medical analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

 

 

 

How to Build an Outcome-based Network

Medical networks under scrutiny
Medical networks in Workers’ Compensation have come under scrutiny of late. Their effectiveness as a centerpiece of Workers’ Comp managed care is being questioned. For most networks, the most obvious problem is that their business model has not changed in twenty-five years while medical costs have continued to rise.

Medical networks in Workers’ Comp, whether they are PPO (Preferred Provider Organization), MCO (Managed Care Organization), HCO (Health Care Organization), MPN (Medical Provider Network) or the latest, EPO (Employer Provider Organization), are under the microscope. Employers and payers now realize that contracting with every provider and applying arbitrary discounts on units of medical services tend to inflate the frequency, duration, and cost of medical care. Rather than saving money for medical services, this practice may actually add to the cost.

Do discount networks work?
In reality, whether discounting units of medical service adds to, or curbs medical costs under the network discount method is unknown because networks have not provided information in that regard. Proof of actual performance does not exist. “Savings” reports supplied by the networks simply tally the discounts with no attention paid to total claim cost or outcome.

Instead, the strategy of discount networks is to contract with as many providers as possible, then measure success based on network utilization, penetration, and total discounts. More network utilization produces more discounts and reported “savings”. Moreover, the discount network strategy relies on the presumption of medical excellence and perfect moral integrity among providers, along with knowledge of the unique characteristics of Workers’ Comp.

Everyone knows the huge networks contain bad apples, usually more than a few. So employers and payers now want to open the curtain to see the moving parts being engineered by the wizard. They want proof of performance.

What employers and payers want
Most employers want the best physicians treating their injured employees at the best possible price. They want quick, convenient access to excellent medical treatment and the earliest possible safe return to work for injured employees. What’s more, they want the most efficient and cost-effective Workers’ Comp claim process. Importantly, they also want evidence of quality care.

Proof of performance through analytics
The missing ingredient for most traditional, discount-based medical networks is documented performance in terms of outcome. The only way to gain such knowledge is through data analysis (analytics). How do the doctors perform in the context of Workers’ comp and what are their outcomes, both in cost and in human terms?

Measuring quality
A physician was once overheard saying, “You can’t really measure medical quality.” That is not true. Quality can be measured in terms of medical performance using multiple criteria, all analytically calculable. What is the mean frequency and duration of medical care for treating certain injuries by an individual physician compared to others of the same specialty treating the same injuries? Other quality factors are equally measureable, such as return to work or sustained return to work. Actually, another way to define quality is best outcome of the claim and for the claimant.

Measuring outcome
In many ways, outcome and quality are the same things in Workers’ Comp. Frequency and duration of medical treatment are easily inflated by providers in networks where discounts are applied to units of service. If providers must discount services, the best way to recover those lost fees is to expand and extend services. Direct medical costs are key to measuring performance, but outcome (quality) is also definable in terms of lost time, return to work, and disability rating at claim closure, along with many other factors. All are influenced by the treating providers and all are measureable.

The new outcome-based networks
Medical provider networks are evolving to the new outcome-based model where providers are contracted based on actual performance derived from the analyzed data. Outcome-based networks offer transparency rather discounts. Some have also created new revenue structures that reward positive outcomes. These new networks carve out the best in class providers evidenced by the data. They provide a new and different business model and an objective basis for selecting network doctors.

An evolving industry
The industry is evolving to new outcome-based networks guided by the analytics of provider performance. Frankly, the Workers’ Comp industry has lagged behind other industries in leveraging their data to enlighten decisions. The new outcome-based networks change that. When the best in class make up a network, logic says outcomes improve.

Read more regarding Workers’ Comp medical provider networks and the analytics of medical provider and network performance.

Provider Networks: Failure, Folly, and Overhaul

A critical topic in Workers’ Comp managed care is the state of medical provider networks. People are awakening to the fact that provider networks, continuing to operate as designed in the eighties, are not working. Actually, they are working, but not for the purpose of controlling costs. Quite the opposite is true, in fact. Medical costs are spiraling while claim outcomes are mostly unknown, a fact that seems to go unnoticed.

Traditional networks
Traditional medical provider networks in Workers’ Comp were designed to emulate group health insurance networks. In group health the benefit plan strictly controls access and fees. In group health, providers not in the network and medical services not within the authorized range are simply not reimbursed. Moreover, while discounts in the group health arena may be tied to the contractual relationship with providers, they are not used to gain competitive advantage for providers as they are in Workers’ Comp.

In Workers’ Comp, traditional networks contract with providers who, in exchange for business directed to them, offer discounts on units of medical services. Every unit of service is discounted and reported to network subscribers as units of savings. While the savings reports appear to be a positive result, they are actually a major problem that most people realize, but few acknowledge openly.

Opportunity for provider manipulation
Medical providers understood from the beginning they could simply increase frequency and duration of medical services to offset the discounts and bolster profit margins. Under the system of reporting discounts as savings, increases in frequency and duration are reported as even more savings!

Medical providers come in many flavors. Most are excellent treating providers seeking the best outcome for their patient, the claimant. They are also willing to work with employers to control Workers’ Comp costs by supporting modified work programs, for example. Yet, a number of treating providers are unaware, inept and some are downright fraudulent. Unfortunately, the latter group, while small in number, is costing the Workers Comp industry millions of dollars annually and little is being done to change the system.

Until networks are restructured so that incentives reward different behavior, they will continue to do business as usual. Doing nothing is profitable and there is little motivation or provocation to change.

Network overhaul
Nevertheless, the groundswell from employers and other purchasers of networks is building and some forward-thinking provider network organizations are leading the way. A few networks are being overhauled by changing incentives and focusing on claim outcomes. Creating outcome-based networks requires selecting providers that have proven records as evidenced in the data.

Best practice providers are identified in the Workers’ Comp world by their patients’ early return to work and return to full duty. Indemnity costs are limited. Frequency and duration of medical treatment are reasonable and direct medical costs are comparable to other treating providers treating the same injuries. Several additional factors come into play in evaluating provider performance, such as whether there is legal involvement in the claim and duration of the claim from date of injury to closure.

Injury severity adjustment
Beyond these and other measures of performance, injury severity must be computed and applied to provider performance analytics to level the playing field among providers. The performance of those who treat more complex cases should be compared with others treating similar cases. Adjustments for fairness in evaluating providers is important to the credibility and reception of the process.

Our broader opinions on this topic have been written and posted in the following articles. A four part series on this topic is available below and you are invited to review these and other articles posted under Blogs

Part I
Rating Medical Providers

Part II
How to Rate Medical Providers in Workers' Compensation

Part III
Transforming Provider Networks into Quality Networks

Part IV
Monitoring Provider Performance for Predictive Profiling

Part III Transforming Provider Networks into Quality Networks

This series began with Rating Medical Providers—Part I, describing how rating medical providers in group health has evolved over the past thirty years and where those initiatives stand today. Physician rating in group health is differentiated from that required in Workers’ Compensation. Group health physician rating does not translate directly to Workers’ Compensation, because the goals and process issues are different. Part II of this series, Rating Medical Providers for Workers’ Comp, takes the next logical step.

Part II describes how physician rating in Workers’ Comp necessarily demands evaluating providers and networks using unique, non-clinical performance criteria. While medical treatment quality remains crucial, non-medical performance is of equal importance. Process and non-medical determinations must adapt to the workplace and distinct cost considerations. This article, Part III in this four-part series takes yet another step to consider how to evaluate networks.

A recent discussion on the LinkedIn Work Comp Analysis Group was introduced by the statement, “California MPN’s: aren’t they all the same?” The implication is since there is a finite number of practicing physicians in California, many of them will appear in multiple MPN’s, therefore one network is more or less like another. The discussion in the group naturally widened to a discussion of medical providers in networks beyond California. Suggestions regarding ways to find the best physicians and “hand-select” providers were put forward. Ideas included establishing rapport with providers, listing quality indicators and asking providers to visit the work place—all good tactics, but difficult to evaluate, maintain and replicate. Amazingly, no one suggested seeking objective data regarding provider performance!

This is really about two separate issues. The first is deciding how to choose a network and the other is choosing medical providers within the network selected. When selecting a network, rather than trying to evaluate the participating providers, the network structure and administration itself should be the first focus. What kind of provider evaluation and monitoring does the network provide? What are the measures of quality for participating providers? Does the network provide regular analyses and reports of provider performance for their customers? Many network administrators consider their job complete when they have enrolled as many providers as they can find.

Another critical factor to consider about networks is the sort of financial incentives that are used with their contracted providers. Are they using the tired approach of extracting discounts from providers in exchange for directing patients to them? More sophisticated networks today are not discounting provider fees as dues for membership. Instead, they are rewarding providers who have good track records for returning injured employees to work and achieving positive outcomes. Asked the question, which is better—discounting provider fees or rewarding providers for excellence, most would choose the latter. But, it’s easier to calculate discounts than it is to evaluate performance.

Network administrators should be evaluating providers using the rating systems described in Parts I and II of this series. For instance, measure frequency and duration of medical treatment compared with the performance of similar providers or specialists treating similar injuries. Recall that most networks discount provider bills on individual unit fees. Why wouldn’t providers increase frequency and duration of treatment when they are docked on individual elements? Refer to our article, The Conspiracy of Silence in Medical Provider Networks for more details.

Only the data offers objective bases for provider performance evaluation and remains the only untapped source of rational provider selection. Yet, provider performance evaluation based on the data is available and affordable. Networks do not typically subscribe to the approach suggested here because it would require changes to their revenue structures. Using the data to evaluate provider performance, redesign networks, and reward exemplary behavior drives a wedge into systems that have been operating on autopilot for decades.

Would network consumers rather spend more money to identify providers that show documented positive track records or continue to play roulette in that regard? Would those network purchasers prefer documented outcome information or continue trying to establish rapport with providers to influence results? Interestingly, most providers would also prefer the documented information approach.

Most providers, unless they are deliberately fraudulent, would elect the documented data methodology. Comparative analyses can and should be shared with them, a simple yet powerful strategy not typically employed.

Managing provider performance by sharing comparative data with individual providers can be likened to the old Hawthorn Effect research where subjects who know they are being watched change their behavior, typically moving toward the mean. Most medical providers have never seen comparative data and would consider it extremely helpful. Most would not choose to be an outlier.

Moreover, the analyzed data is a prime platform for discussion and planning with individual providers that will lead to genuine professional rapport. Developing a collaborative relationship with objective tools to support it along with similarly documented and monitored activity going forward will lead to continued improvement.

Identifying best practice treating physicians is imperative, and one direct route is through a responsible and advanced network administrator. Network purchasers should stop believing the status quo myth. Savvy purchasers should select networks that evaluate and monitor the data.

View additional articles by Karen Wolfe under Blogs at www.medmetrics.org

A Conspiracy of Silence--WC Provider Networks

A particularly bizarre process has been carried out in the Workers Compensation industry for a very long time. It's something everyone knows about, but few talk about, and still fewer make any attempt to change. It is a conspiracy of silence that continues to drive up medical costs.

Managed care networks (PPO's, HCO's MPN's) contract with physicians and other medical providers to discount their services in exchange for directing injured workers to them. Some states have gotten into the act by legislatively requiring provider networks to be similarly structured. The appeal to those who subscribe to networks is that discounts are applied to individual units of medical services delivered. When the discounts are tallied they are sent to network clients in the form of clean, easily understood reports of dollar savings. The number of services charged is very simply multiplied by the contracted discount. Obviously, more units of service charged result in more discounts and more reported dollars saved. But not really.

You don't need to be too clever to figure out that more discounts reported means more medical services were delivered, but not necessarily more savings. Increasing medical services inflates the number of reported discounts, not overall savings.

Moreover, medical providers are a part of the conspiracy, being quick to realize the way to overcome the revenue hit of discounts is to deliver and charge for more services. Most providers don't think of themselves as exploiting their charges and the system. Many just know that for Workers Comp patients under the network discounting arrangement, they maximize treatment.

Payers go along with the deception because reports of discounts make people feel good. Who doesn't want to receive the good news of cost savings? They can pass along the feel-good reports to their clients and accounts. Everyone wins--except the employer who eventually has to foot the bill. Employers are aware of these shenanigans; it's hardly breaking news. But in the conspiracy of silence, no one is willing to topple the apple cart by leading the charge of change.

Nevertheless, medical network practices could be made palatable, even defensible if this archaic method of discounting were redirected to evaluating medical practice patterns and outcomes. Think quality. Under present procedures, once providers are contracted by a network, they remain on the panel indefinitely, without performance evaluations or monitoring. Quality is not measured and outcomes are not reported. We have no proof of value. We have no quality measures for the treatment practices of the individual providers in the network. Yet, this higher level of information and process management is available now.

The technology and methodology to measure and monitor treating provider performance is a process of evaluating the data to measure quality in context with desired outcomes in Workers Comp. That is different than in group health or general health where quality criteria are determined by return to health whereas in Workers Comp we are more concerned with return to work. Evaluating data is not so difficult except for the fact that in Workers' Comp, the data related to a claim are often found in different locations, even in different companies. Regardless of where the data resides, it is rarely integrated for the purposes of understanding medical treatment in context with outcome. Provider networks hold vast amounts of medical billing data, but not claim outcomes data.

Medical billing data is rich in medical treatment detail along with billed charges for services delivered. But it has to travel through bill review where the charges are evaluated and recommendations made for adjusted payments based on appropriateness and fee schedules. The bills also go the networks where the unit discounts are applied. Bill review companies and networks have truckloads of data, but still not enough data.

The essential value-add to fair provider performance evaluation is claims level data. Treatment practices of providers found in billing and/or bill review must be considered in context of the entire claim. Billing, whether discounted or not must be viewed from the broader perspective of return to work, indemnity payments and outcomes. Continuously monitoring providers and their treatment practices in this way will reveal best practice providers, inept providers, and fraudulent providers. So what's the hold-up?

The concept of contracted provider networks is not the problem. The problem is the revenue and payment structure currently used by them. Not monitoring and measuring provider performance is unacceptable. But most networks do not want to consider alternative structures, structures that do not rely on unit discounts. It would mean changing their business model where revenue and payments are derived from different logic. But networks should consider the fact that employers might prefer to pay for networks (via their payers) that evaluate providers and provider performance. Employers might choose to pay for networks with providers who have better outcomes rather than misleading discounts and reported savings. But for now, the conspiracy of silence continues.

View additional articles by Karen Wolfe under Blogs at www.medmetrics.org