Author: WorkCompAcademy

FAIR Health is a national, independent nonprofit organization dedicated to bringing transparency to healthcare costs and health insurance information through data products, consumer resources and health systems research support. FAIR Health possesses the nation’s largest collection of private healthcare claims data, which includes over 36 billion claim records and is growing at a rate of over 2 billion claim records a year.

The new FAIR Health white paper containing the fifth annual edition of FH® Healthcare Indicators and FH® Medical Price Index, shows that telehealth utilization grew nationally 7,060 percent from 2019 to 2020, an increase driven by the COVID-19 pandemic and the limits imposed on certain in-office services, coupled with the greater risk of infection from in-person encounters.

FH Healthcare Indicators reveal trends and patterns in the places where patients receive healthcare. Focusing on alternative places of service – retail clinics, urgent care centers, telehealth and ambulatory surgery centers (ASCs) – as well as emergency rooms (ERs), FH Healthcare Indicators evaluate changes in utilization, geographic and demographic factors, diagnoses, procedures and costs.

Among the key findings:

– – Due to the pandemic and the limits imposed on certain in-office services, coupled with the increased risk of infection from in-person encounters, telehealth grew in 2020 on a scale unseen in previous years. Telehealth utilization increased nationally 41,919 percent from 2015 to 2020, a more than 40-fold increase over the growth of 1,019 percent from 2014 to 2019 reported in last year’s edition. From 2019 to 2020, national growth was 7,060 percent.
– – In all other places of service studied for changes in utilization, utilization decreased from 2019 to 2020, probably because of the impact of COVID-19. Utilization fell 38 percent in ASCs, 30 percent in ERs, 16 percent in urgent care centers and 4 percent in retail clinics.
– – Among the places of service studied, telehealth held the highest percentage of medical claim lines in 2020, with 15.41 percent of all medical claim lines nationally. The comparable percentages for the other places of service were 2.07 percent for ERs, 1.31 percent for urgent care centers, 0.64 percent for ASCs and 0.05 percent for retail clinics.
– – In 2020 as in previous years, more claim lines were submitted for females than males in most age groups in the places of service in which FAIR Health studied gender-related patterns—retail clinics, urgent care centers, telehealth, ASCs and ERs.
– – However, in some places of service, such as retail clinics, urgent care centers, ASCs and ERs, the gap between males and females narrowed. For example, in ERs, in the age group 61-70, the male and female shares were approximately equal (50 percent) in 2020, a change from 2019, when the female share had been 52 percent and the male share 48 percent. This trend bears monitoring in the future.
– – In 2020, the five states in which retail clinic claim lines constituted the greatest percentage of medical claim lines were (from greatest to least) Arkansas, Missouri, Rhode Island, Maine and Minnesota. In 2018, Minnesota had ranked first in this list; in 2019, it ranked third, and in 2020 it fell to fifth.
– – Connecticut, which had been fourth from the bottom in its use of telehealth as a percentage of all medical claim lines by state in 2019, rose to fifth from the top in 2020.
– – In 2020, exposure to communicable diseases joined the list of most common diagnostic categories in retail clinics, urgent care centers and telehealth. This category largely was associated with testing and/or treatment for COVID-19 when a patient was exposed to the condition.
– – Across offices, urgent care centers and retail clinics in 2019, urgent care centers had the highest median charge amount for CPT®2 99203 (30-44-minute new patient office visit), but in 2020 the median charge for an office ($226) was slightly higher than that for an urgent care center ($221).

FH Medical Price Index reports shifts in costs and facilitates useful comparisons among medical prices in six procedure categories from May 2012 to November 2021:

– – Of the six procedure categories, hospital E&Ms had the greatest percent increase in charge amount index, seven percent, and in allowed amount index, five percent.
– – Radiology and medicine each had the smallest percent increase in charge amount index, two percent.
– – Radiology had the smallest percent increase in allowed amount index, one percent.

FAIR Health President Robin Gelburd stated: “This year’s edition of FH Healthcare Indicators and FH Medical Price Index opens a window on the impact of the COVID-19 pandemic on the nation’s healthcare system. We hope that this new edition, like those in previous years, continues to inform decision making throughout the healthcare sector by payors, providers, government officials, policy makers, academic researchers and others.”

As directed by the Joint Legislative Audit Committee, the California State Auditor conducted an audit of the State’s licensure and oversight of hospice agencies and found that the State’s weak controls have created the opportunity for large-scale fraud and abuse.

Hospice is a specialized form of interdisciplinary health care primarily designed to provide palliative care and alleviate the physical, emotional, social, and spiritual discomforts of a person who is experiencing the last phases of life because of a terminal disease.

The fraud indicators that were found particularly in Los Angeles County include the following:

– – A rapid increase in the number of hospice agencies with no clear correlation to increased need.
– – Excessive geographic clustering of hospices with sometimes dozens of separately licensed agencies located in the same building.
– – Unusually long durations of hospice services provided to individual patients.
– – Abnormally high rates of still-living patients discharged from hospice care.
– – Hospice agencies using possibly stolen identities of medical personnel.

According to the report “These indicators strongly suggest that a network or networks of individual perpetrators in Los Angeles County are engaging in a large and organized effort to defraud the Medicare and Medi-Cal hospice programs. Such fraud places at risk the extremely vulnerable population of hospice patients.”

Los Angeles County has experienced a 1,500 percent increase in its number of hospice agencies since 2010. It had more than six-and-a-half times the nationwide average number of hospice agencies relative to its aged population in 2019. Although the majority of hospice services were provided by nonprofit organizations in the past, this recent wave of growth is almost exclusively in for-profit companies.

Investigators identified several areas within Los Angeles County with extremely high concentrations of hospice agencies, including individual buildings supposedly housing dozens of hospice agencies. In fact, the California Department of Public Health reported a single building in the community of Van Nuys as having more than 150 licensed hospice and home health agencies – a number that exceeds the structure’s apparent physical capacity.

Further, numerous indicators suggest that many of these hospice agencies may have been created to fraudulently bill Medicare and Medi-Cal for services rendered to ineligible patients or services not provided at all. This type of fraud can be lucrative. For example, a hospice agency that bills for 20 patients at the most common rate can collect about $122,000 per month.

Despite these widespread problems in the hospice program, Public Health and the two state agencies primarily responsible for identifying and investigating hospice fraud in Medi-Cal – the California Department of Health Care Services and the California Department of Justice – have not sufficiently coordinated their efforts.

In October 2021, California passed a general moratorium on licensing new hospice agencies beginning Jan. 1, 2022, and lasting until one year after the publication of the auditor’s report.

The Centers for Medicare and Medicaid Services (CMS) has released an updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 3.6, March 15, 2022).

Clarification has been provided, in this new update, regarding the use of non-CMS-approved products to address future medical care (Section 4.3), as well as documentation and re-review tips (Sections 9.4.1.1 10.2, and 16.1).

By way of background, CMS added Section 4.3 into the WCMSA Reference Guide Version 3.5 in January 2022 and the agency discussed the changes as part of its recent WCMSA update webinar.

This section, titled “The Use of Non-CMS-Approved Products to Address Future Medical Care,” sets-forth CMS’s policy and position regarding what is commonly referred to as “evidenced-based” or “WCMSA non-submit” MSAs which are future medical arrangements that are not submitted by the settling parties to CMS for the agency’s review and approval, although the settlement meets CMS’s WCMSA review thresholds.

As part of Section 4.3, CMS states that they view these arrangements, as “a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement” and when a settlement includes a non-CMS approved MSA, CMS may deny payment for Medicare covered medical services related to the WC injuries until it is satisfied that the entire net settlement amount was spent for claim related treatment.

After CMS introduced Section 4.3 in January, two questions that remained unclear concerned (1) whether CMS’s policy would apply retroactively or prospectively and (2) whether CMS intended this policy to apply to non-CMS approved MSAs that parties may include in settlements that do not meet CMS’s WCMSA review thresholds.

The new Reference Guide 3.6, CMS has now added language to Section 4.3 attempting to clarify these two issues.

Specifically, as to the first question, CMS has added language indicating that the policy set forth in Section 4.3 applies to “all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022.”

Regarding the second question, CMS has added language stating that it “does not intend for this policy to affect any settlement that would not otherwise meet its WCMSA review thresholds,” although it reminds the settling parties that its “comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement.”

In the third paragraph of Section 4.3 it is noted that CMS has changed what originally read as “will” to “may at its sole discretion deny payment for medical services related to WC injuries … ”

From these changes, it appears CMS has softened the original language contained Section 4.3 released in WCMSA Reference Guide Version 3.5 which, presumably, were made to provide CMS the flexibility to assess the amount allocated in non-CMS approved MSAs.

This would seem to align with one point CMS discussed as part of its recent WCMSA webinar. Specifically, on the webinar CMS indicated that if the claimant can demonstrate that a non-CMS approved MSA was properly and fully exhausted, it may review the allocation to determine if the amount was reasonable. If the allocation is determined to be reasonable, then CMS may choose not to require full exhaustion of the net settlement amount.

However, it may be reasonable to assume that CMS is likely to apply the CMS WCMSA allocation review standards as the baseline to measure reasonableness and, consequently, unless the allocation was priced in accordance with those standards, there is significant risk that CMS would disagree with the allocation amount upon exhaustion.

CMS’s updated language in Section 9.4.1.1 stating that medical records are required, even in denied cases, is a culmination of CMS’s trend to formally tighten its review process to make the approval of zero MSAs more challenging. Further, CMS’s update to its re-review process as noted in Section 16.1 may prove particularly problematic given the current absence of a formal appeals process.

In conclusion, section 4.3’s addition to the Reference Guide can be viewed as CMS essentially putting the industry on notice that it may enforce its EBMSA/non-submit policy against applicable settlements that do not include a CMS-approved WCMSA after January 11, 2022.

Remyna Castillo, while employed as a production line worker, sustained an industrial injury to her head and brain in 2017.

On July 9, 2019, the PTP again submitted an RFA for continuation of the outpatient services at Casa Colina. Defendant continued to provide outpatient care to applicant until July 16, 2019, when defendant’s UR denied the request based on the Medical Treatment Utilization Schedule (MTUS) guidelines for traumatic brain injury.

Defendant attempted to serve the July 16, 2019 UR determination on applicant’s attorney. However, it was served to an incorrect suite number and was not received at applicant’s attorney’s office. (8 Cal. Code Regs. § 9792.9.1; and Cal. Code Civ. Pro. § 1013(a).

The WCJ found that defendant’s improper service of the Utilization Review (UR) determination renders it invalid, and the determination of medical necessity for the treatment may be made by the Appeals Board. The WCJ found defendant is liable for continuing applicant’s outpatient physical rehabilitation, consisting of transitional living center day treatment, transportation, and interpreter services, until they are no longer reasonably required.

Reconsideration of this finding and award was denied in the panel decision of Castillo v Midnight Impressions ADJ11092501 (March 2022).

Defendant contended that the evidence does not justify the award continuing applicant’s outpatient rehabilitation, transportation, and interpreter services, arguing the WCJ exceeded his jurisdiction by primarily relying on Patterson v. The Oaks Farm, 79 Cal. Comp. Cases 910, 2014 LEXIS 98 (Patterson), to extend the provision of applicant’s outpatient physical rehabilitation “in perpetuity” circumventing its right to request an RFA.

In Dubon v. World Restoration, Inc. (2014) 79 Cal.Comp.Cases 1298, 1299 (Appeals Board en banc) (Dubon II), the Appeals Board held that if a UR decision is untimely, the UR decision is invalid and not subject to independent medical review (IMR).

If a UR decision is untimely, the determination of medical necessity for the treatment requested may be made by the Appeals Board.  Subsequent to Dubon II, in a significant panel decision, the Appeals Board held that a UR decision that is timely made, but is not timely communicated, is untimely. (Bodam v. San Bernardino County/Dept. of Social Services (2014) 79 Cal.Comp.Cases 1519.)

In this case, the WCJ correctly determined that the UR was invalid and that applicant should continue to receive treatment at Casa Colina because the need for continued treatment is supported by substantial medical evidence.

Applicant must still meet her burden to prove the treatment she requested is medically necessary. On this record, the WCAB panel was persuaded that applicant requires continued participation in the multi-disciplinary neuro-rehabilitation treatment program in order for her to make further improvements and sustain the progress she has made.

In a recent case, the Second District Court of Appeal denied a defendant’s Petition for Writ of Review, wherein the defendant asserted that the WCAB erred in relying on Patterson to award an applicant continued inpatient care at Casa Colina. (Nat’l Cement Co., Inc. v Workers’ Comp. Appeals Bd. (Rivota) (2021) 86 Cal. Comp. Cases 595, 2021 Cal. Wrk. Comp. LEXIS 21.)

In affirming the WCAB’s decision, the Court of Appeal stated that the applicant was not required to provide ongoing requests for authorization for his ongoing inpatient stay at Casa Colina, that defendant could not force applicant to be discharged from the facility by obtaining utilization review without showing a change in applicant’s condition or circumstance, and that applicant’s continued stay at Casa Colina absent a change in circumstances was required to prevent disruption of his medical care and promote continuity in his living situation.

Additionally, in Ferrona v. Warner Brothers (2015) 2015 Cal. Wrk. Comp. LEXIS P.D. 220, the WCAB, citing Patterson, upheld the WCJ’s decision and found that defendant was not entitled to unilaterally terminate applicant’s home health care services because there was no evidence of change in applicant’s condition or circumstances to indicate that home care services were no longer reasonably required to cure or relieve from effects of industrial injury.

The Commission on Health and Safety and Workers’ Compensation (CHSWC) examines the health and safety and workers’ compensation systems in California and makes recommendations to improve their operation. Annual Reports are prepared by CHSWC covering the performance of the California workers’ compensation system, including discussion of reforms, recent legislation, current research and data from various sources.

CHSWC just released its 294 page 2021 Report. Some of the highlights of the new report include statistics on the estimated effects on the COVID-19 pandemic on worker safety, the effects of legislation to reduce adverse effects, and the associated cost projections on the worker’s compensation system.

According to the current report, the California WC system covers an estimated 17,385,000 employees working for over 1,039,079 employers in the state. These employees and employers generated a gross domestic product of $3.01 trillion in 2020. A total of 645,409 occupational injuries and illnesses were reported for 2020,ranging from minor medical treatment cases to catastrophic injuries and deaths. The total paid cost to employers for workers’ compensation in 2020 was an estimated $18.7 billion.

The COVID-19 pandemic presents unique conditions, in which many jobs that had not been typically considered hazardous suddenly became dangerous, and the mandatory rules of claim denials were changed by the State of California. Workers at a high risk of exposure to the virus while at work received WC insurance coverage due to efforts by Governor Newsom and his administration that started as Executive Order N-62-20 and culminated in SB 1159 on September 17, 2020.

For the dates of injury from late 2019 to June 1, 2021, about 150,000 COVID-19 claims had been filed in the California WC system. Over one-half of these COVID-19 claims were filed within the insured system.

Almost half (49 percent) of all COVID-19 claims in the first year of the pandemic in 2020 were filed by women. This share was 10 percentage points higher than the average share (39-40 percent) of women in claims for all non-fatal work injuries in California. Women make up a large share of the labor force on the front lines of the pandemic and in industries and occupations that have taken particularly large hits during the COVID-19 crisis. In 2021, 44 percent of COVID-19 WC claims were filed by women and 55 percent by men. During the peak of the Omicron pandemic in January 2022, 47 percent of COVID-19 claims were filed by women and 53 percent by men.

From March 2020 to January 2022, Los Angeles (27 percent) and the Inland Empire (24 percent) regions together accounted for 51 percent of California’s COVID-19 WC claims, followed by the Bay Area (15 percent), the Central Valley (13 percent), San Diego (7 percent), and the more rural Central Coast (5 percent) and the Sacramento Valley (5 percent). The Eastern Sierra Foothills, North State- Shasta, and the North Sacramento Valley regions, comprised of several counties with a small number of claims, together accounted for 4 percent of the COVID-19 WC claims filed during the same period.

Currently the projected costs of COVID-19 claims in the insured sector for accident years 2020 and 2021 are over $1 billion in total, with over $850 million in 2020 and $210 million in 2021, when estimated using the actual claim counts and reported cost information. The estimated systemwide cost of the COVID-19 claims in 2020 is $1.25 billion.

The projected average cost of a COVID-19 claim differs significantly by the severity of the illness, increasing from $3,000 for the mild symptom cases to $382,000 for the death claims. The average cost of all COVID-19 claims based on reported information was $19,000 which is below the initial projections of $34,000 due to a higher proportion of mild claims being filed than initially projected. Also a much higher than projected share of COVID-19 claims were filed by younger workers who are more likely to have mild COVID-19 symptoms.

Potential losses are associated with aggravation of preexisting conditions and the possibility that a claimant could become a “long-hauler” (one who continues to suffer the effects of COVID-19 long after a typical recovery course). Up to an estimated 10 percent of COVID-19 cases will experience prolonged symptoms occurring across all levels of disease severity – from mild cases to those requiring hospitalization and intensive care. Management of procedures and treatments related to long-haul COVID-19 cases are considered serious medical cost drivers.

The federal National Institutes of Health launched an initiative to study the causes, means of prevention, and treatment of long-haul COVID-19 cases.