Category: Daily News

In a four-month investigation, Reuters has documented the full extent of the fraud in India’s medical-education system. The stunning report concludes that “India’s system for training doctors is broken. It is plagued by rampant fraud and unprofessional teaching practices, exacerbating the public health challenge facing this fast-growing but still poor nation of about 1.25 billion people. The ramifications spread beyond the country’s borders: India is the world’s largest exporter of doctors, with about 47,000 currently practicing in the United States and about 25,000 in the United Kingdom.”

The Reuters probe also found that recruiting companies routinely provide medical colleges with doctors to pose as full-time faculty members to pass government inspections. To demonstrate that teaching hospitals have enough patients to provide students with clinical experience, colleges round up healthy people to pretend they are sick. Government records show that since 2010, at least 69 Indian medical colleges and teaching hospitals have been accused of such transgressions or other significant failings, including rigging entrance exams or accepting bribes to admit students. Two dozen of the schools have been recommended for outright closure by the regulator. Paying bribes – often in the guise of “donations” – to gain admission to Indian medical schools is widespread, according to India’s health ministry, doctors and college officials.

“The next generation of doctors is being taught to cheat and deceive before they even enter the classroom,” said Dr. Anand Rai. He exposed a massive cheating ring involving medical school entrance exams in the central Indian state of Madhya Pradesh in 2013. Rai was given police protection after he received death threats following the bust.

Charged with maintaining “excellence in medical education” is the Medical Council of India (MCI). But this government body is itself mired in controversy. Its prior president currently faces bribery allegations. The council is the subject of a mountain of lawsuits, many of them pitting it against medical schools challenging its findings. The cases often drag on for years.

“The best medical schools in India are absolutely world class,” said David Gordon, president of the World Federation for Medical Education. But, he added, the Indian government’s process of accrediting a “huge” number of recently opened, private medical schools “has at times been highly dubious.” Sujatha Rao, who served as India’s health secretary from 2009 to 2010, said “The market has been flooded with doctors so poorly trained they are little better than quacks,”

The system’s problems are felt abroad, too. Tens of thousands of India’s medical graduates practice overseas, particularly in the United States, Britain, Australia and Canada. All of these countries require additional training before graduates of Indian medical schools can practice, and the vast majority of the doctors have unblemished records. But regulatory documents show that in both Britain and Australia, more graduates of Indian medical schools lost their right to practice medicine in the past five years than did doctors from any other foreign country.

About 45 percent of the people in India who practice medicine have no formal training, according to the Indian Medical Association. These 700,000 unqualified doctors have been found practicing at some of India’s biggest hospitals, giving diagnoses, prescribing medicines and even conducting surgery. Balwant Rai Arora, a Delhi resident in his 90s, said in an interview that he issued more than 50,000 fake medical degrees from his home until his forgery ring was broken up by the police in 2011. Each buyer paid about $100 for a degree from fictitious colleges. Arora was twice convicted and jailed for forgery. “There is a shortage of doctors in India. I am just helping people with some medical experience get jobs,” said Arora. “I haven’t done anything wrong.”

Liberty Mutual Insurance, once the country’s biggest provider of workers’ compensation insurance, is pulling back from the comp market, according to the article in the Boston Globe, as its profits get squeezed by increasing medical costs and changing state regulations.The Boston company, which got its start a century ago insuring railway, shipbuilding, and tannery workers hurt on the job, has slipped to No. 4 by premiums since 2012. Its annual workers’ comp premiums dropped by more than a third to $2.7 billion in 2014 from $4.2 billion three years earlier. The insurer – first known as the Massachusetts Employees’ Insurance Association – also has sold off some of its workers’ compensation subsidiaries and paid Warren Buffett’s Berkshire Hathaway Inc. to take over some of its claims.

Liberty Mutual officials said the company will remain a large player in the market, but is focusing on growing more profitable portions of its business, such as safety consulting and managing the claims and paperwork for companies that insure themselves for workers’ comp.

Liberty Mutual’s overall profits have grown since it began reducing its cutting its workers’ comp business three years ago. In 2011, the insurer earned $284 million. That rose to $829 million in 2012, $1.7 billion in 2013, and $1.8 billion last year, according to the company’s annual reports.

The company, which is owned by its policyholders, does not disclose profits for its workers’ comp business.

In 2012, Liberty Mutual sold its workers’ compensation business in Argentina. Last year, it shed Summit Holdings Southeast Inc., which was solely a workers compensation subsidiary. A few months later, Liberty Mutual announced that it would pay a Berkshire Hathaway company $3 billion to take over some of its workers’ compensation claims, along with liability tied to asbestos and environmental policies.The deal freed Liberty Mutual to spend its money on other projects and investments, instead of having to set aside money for long-term workplace injury claims.

Some insurers, however, remain optimistic about workers’ compensation, analysts said. The combination of recent state rate increases and more sophisticated data and technology to control costs, especially medical expenses, provides the potential to boost profits, they said.

The Travelers Cos. of St. Paul, Minn. has increased its share of the workers’ comp market and surpassed Liberty Mutual. Companies that were smaller players several years ago, such as Berkshire Hathaway and American Financial Group Inc. of Ohio, also have grabbed more of the market.

Liberty Mutual has tended to pay out a larger percentage of its workers’ comp premiums in claims than the industry average, leading to shrinking profits in that business. In 2012, 89 percent of workers’ comp premiums collected by Liberty Mutual were paid out to claims, compared with 68 percent industry-wide, according to the National Association of Insurance Commissioners.

Bob Hartwig, president of the Insurance Information Institute, a New York-based industry research group, said Liberty Mutual’s withdrawal from workers’ compensation hasn’t disrupted the market yet. There are still hundreds of companies that offer workers compensation insurance at competitive prices, he said. “There are always insurers changing their strategic emphasis,” Hartwig said.

Doctors must be careful to avoid entering into payment agreements that could violate the anti-kickback statute, HHS’ Office of Inspector General warned in a fraud alert Tuesday that follows a dozen recent settlements involving physician contracts. The alert could signify that the feds are increasingly pursuing allegations against individual doctors, as opposed to just the hospitals and other organizations that pay them. Or it could be a way to remind physicians that they, too, are accountable for arrangements that skirt the law, experts say. It also serves as an a guide for workers’ compensation administrators on detection of masked or hidden illegal kickback schemes.

The alert warns doctors entering into payment arrangements, such as medical directorships, that their compensation must reflect fair market value for services provided. It’s common for doctors to be employed by hospitals and other organizations as medical directors, but those arrangements might violate the anti-kickback law when their purpose is to get more referrals from those doctors.

Although many compensation arrangements are legitimate, a compensation arrangement may violate the anti-kickback statute if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of federal healthcare program business, OIG encourages physicians to carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them.

The new alert is the third in three years involving physicians. In 2013, the OIG issued a fraud alert about physician-owned device distributorships, and in 2014 it issued a fraud alert about lab payments to physicians.

The OIG has reached settlements recently with 12 individual physicians who entered into “questionable” medical directorship and office staff arrangements, the agency said. In those cases, the government alleged that payments to physicians took into account the volume or value of their referrals or did not reflect fair-market value, or that the doctors did not actually provide the services outlined in their agreements. In some cases, the OIG alleged that doctors entered into agreements in which an affiliated healthcare entity paid the salaries of their office staff.

Those who commit fraud involving Federal health care programs are subject to possible criminal, civil, and administrative sanctions. For more information on physician relationships, see OIG’s”Compliance Program Guidance for Individual and Small Group Physician Practices” and OIG’s “A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse.”

By 2019, some insurance experts predict that medical care will make up two-thirds of workers compensation claim costs. Comorbid conditions such as obesity and diabetes, along with growing prescriptions for opioids can further complicate WC claims. When these injuries occur, however, the way a claim is managed, from the day of the injury to the day the claim is closed, can impact whether the injured employee quickly recovers and returns to work or requires treatment for months, even years.

By gaining a thorough understanding of the value nurses deliver, knowing which claims will benefit most from a nurse’s involvement, and learning which skills a nurse really needs to make that involvement count, Liberty Mutual says it can achieve better outcomes. Intuitively, insurance carriers and third-party administrators understand the connection between a nurse’s involvement in a claim and a favorable claim outcome. But Liberty wanted to quantify that impact and calculate the “N Factor.”

It looked at medical billing and claims data for 42,000 claims across four categories. The company was able to leverage a claimant’s behavioral or psychosocial characteristics, which are captured as part of a claim screening function. Nurses record information such as the claimant’s expectations, experience with injuries, and attitudes toward work and rehabilitation, all of which play a role in better outcomes.

The study, “The N Factor: How Nurses Add Value to Workers Compensation Claims,” showed that nurses deliver a number of significant benefits when involved on a claim. Medical and total loss dollars were reduced by double-digit percentages and injured employees returned to work sooner, which contributes to significant cost savings, increased productivity, and improvements in morale.

“When we analyzed a homogeneous set of claims, we saw that a nurse’s involvement made a difference in the claim cost as well as returning the injured employee to work sooner,” the study states. “But that doesn’t mean that involving a nurse in the treatment of every type of claim is going to produce the same results.”

Liberty created a decision-support model to identify claims where a nurse would be beneficial. This model leverages 25 to 30 data variables within its claims system.

The Workers’ Compensation Appeals Board plans to reorganize and renumber its Rules of Practice and Procedure (Rules) which are found in the California Code of Regulations, title 8, commencing with section 10300.

The organizational structure initially adopted in 1966 no longer accommodates the number and complexity of rules adopted in the modern era. As a result of several comprehensive reforms of the workers’ compensation system since 1966, the Rules are now 50 pages longer than they were in 1966 and cover multiple new procedures. For example, the Rules now include procedures for issuing sanctions, consolidation of cases, and appealing determinations of the Administrative Director. Because the existing organization does not have a logical or natural place for many of these new rules, it is often difficult to locate a particular rule. An additional consequence of the outdated organization of the rules is unnecessary duplication of rules in different articles and multiple rules covering the same or similar subjects.

With this reorganization, the WCAB plans to accomplish the following:

Organize articles to reflect the order of events in a case.
Eliminate duplicative rules.
Break up complex rules.
Simplify and modernize language of rules for clarity.
Create some room between rules so that additional rules can be added in the future without need for decimals.

In general, the WCAB does not plan to change the substance of the vast majority of rules with this reorganization. However, it will propose substantive changes where a rule does not reflect current practice or when it believes substantive changes are necessary.

Prior to engaging in formal rulemaking under Labor Code sections 5307 and 5307.4, and starting with this notice, the WCAB will periodically post in a forum on its website a group of articles and rules for review and comment. You may go to the forum page to offer your comments.

In the next few months, we will post the remainder of the proposed reorganized rules in two additional forums. After we have completed these forums and we have reviewed and considered the comments received, we will issue an Initial Statement of Reasons and a Notice of Public Hearing together with the complete package of reorganized and revised rules.