The dominant model for payment of medical services has been a “payment for procedure” model which financially encourages vendors to provide as many medical procedures as possible without a financial incentive for a good outcome. Escalating costs have triggered experiments with other payment models that focus on value. Earlier this decade, “pay for performance” took center stage as a tactic for realigning payment with value. Another model known as “bundled payments” is being studied at the state and national level. One or combinations of these newer models may at some point determine payment under California workers’ compensation.

Bundled payment is a single payment to providers or health care facilities (or jointly to both) for all services to treat a given condition or provide a given treatment. Bundled payment asks providers to assume financial risk for the cost of services for a particular treatment or condition, as well as costs associated with preventable complications. Just 1.6 percent of payments currently flowed through bundled payment models. However, use of bundled payments is growing in both the public and private sectors. The Centers for Medicare and Medicaid Services (CMS) Bundled Payments for Care Improvement (BPCI) Initiative will pilot bundled payments in almost 100 settings (ranging from hospitals to nursing homes) over the next three years, and the program is expanding further. Both Tennessee and Arkansas are working to implement multi-stakeholder episode-based payment initiatives.

Traditionally, Medicare makes separate payments to providers for each service they perform (pay for procedure model) for beneficiaries during a single illness or course of treatment. This approach can result in fragmented care with minimal coordination across providers and health care settings. It also rewards the quantity of services offered by providers rather than the quality of care furnished. Research has shown that bundled payments can align incentives for providers – hospitals, post-acute care providers, physicians, and other practitioners – allowing them to work closely together across all specialties and settings. The Bundled Payments for Care Improvement initiative was developed by the Center for Medicare and Medicaid Innovation (Innovation Center). The Innovation Center was created by the Affordable Care Act to test innovative payment and service delivery models that have the potential to reduce Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) expenditures while preserving or enhancing the quality of care for beneficiaries.

The Bundled Payment model has now caused researchers to focus on the cause of costly “bad” medical and surgical outcomes, research that is desperately needed. A new study from researchers at NYU Langone’s Hospital for Joint Diseases identifies common causes of hospital readmissions following total hip and knee arthoplasty procedures. By finding these common causes, researchers believe quality can be increased and hospital costs decreased. The study was presented at the American Academy of Orthopaedic Surgeons Annual Meeting in Las Vegas.

The patients were part of the Bundled Payment for Care Initiative from the Centers for Medicare and Medicaid Services (CMS), a government pilot program where hospitals are paid for quality of procedures rather than quantity. One way to measure quality is by examining hospital readmission rates. Researchers studied 721 patients admitted to NYU Langone’s Hospital for Joint Diseases between January and December 2013 for a total hip arthoplasty (THA) or total knee arthoplasty (TKA). Of those cases, 80 patients, or 11 percent, had to be re-admitted within 90 days.

THA and TKA readmissions due to surgical complications accounted for 54% and 44% of the indications for readmissions, respectively. Surgical complications included infection (11), wound complications (8) bleeding (7), periprosthetic fracture (5), dislocations (4), and post-surgical pain (4). The average cost of readmission for surgical complications was $36,038 for THA and $61,049 for TKA. Medical complications included gastrointestinal disease (11), pulmonary disease (8), genitourinary/renal complications (6), hematologic (6), cardiovascular (3), endocrine disorders (2) syncope (2), rheumatologic (1), lumbago (1), and an open ankle wound (1). The average cost of medical complications was $22,775 for THA and $10,283 for TKA patients, respectively.

“While some complications are unavoidable, we are proud of our low readmission rates at the Hospital for Joint Diseases and by identifying the causes for readmission, we hope to reduce our rates even further,” says study co-author Joseph Bosco, MD, associate professor and Vice Chair for Clinical Affairs in the Department of Orthopaedic Surgery at NYU Langone. “As bundled payment programs are implemented more widely nationwide, other U.S. hospitals will follow our example and implement strategies to boost quality and reduce medical costs.”

The Social Security Administration has published its proposed 2016 budget, which also includes as an appendix, several legislative proposals. The legislative agenda includes a proposal that would require states, local governments and private insurers to report to the Social Security Administration workers’ compensation benefits that would affect the offset of social security disability benefits.

The proposal states: “Current law requires SSA to reduce an individual’s Disability Insurance (DI) benefit if he or she receives workers’ compensation (WC) or public disability benefits (PDB). SSA currently relies upon beneficiaries to report when they receive these benefits. This proposal would improve program integrity by requiring states, local governments, and private insurers that administer WC and PDB to provide this information to SSA. Furthermore, this proposal would provide for the development and implementation of a system to collect such information from states, local governments, and insurers.”

When social security disability recipients also receive workers’ compensation benefits, the Social Security Administration is entitled to offset those benefits pursuant to the Social Security Act, 42 U.S.C. §424a. Generally, the Social Security Act requires that the total amount of social security disability and workers’ compensation or public disability benefits be reduced by an amount necessary to insure that the sum of the benefits does not exceed 80 percent of the individuals pre-disability average current earnings. 42 U.S.C. §424a(a)(5).

Currently, the Social Security Administration does not have a means to independently determine whether a disability beneficiary is also receiving workers’ compensation benefits or governmental disability benefits. The Social Security Administration relies upon the beneficiary to report when they are receiving such benefits. The potential for fraud or under reporting is very apparent.

The proposal would call for the creation of a system for governments and insurers to report the nature and amount of the benefit received by the social security disability beneficiary. The proposal does not address the issue of how the insurers or governmental entities are to determine whether the claimant is, in fact, a social security disability beneficiary. This proposal is substantially similar in principle to the MMSEA §111 mandatory reporting requirement for reporting benefits and settlements to Medicare.

While the goal of reducing fraud is certainly meritorious, the proposal will shift the burden of reporting workers’ compensation and public disability benefits from the claimant/beneficiary to government entities and workers’ compensation insurers. The burden may be increased if the Social Security Administration requires insurers and public entities to acquire releases from the claimant/beneficiaries prior to disclosure of their workers’ compensation or public disability benefit. It is likely that this proposal will receive widespread support. The proposal does not suggest an effective date; however, it is quite likely that the effective date would be approximately 12-18 months after any such legislative proposal became law.

The increasing risk of drug resistant superbug infections have been the focus of attention over the last several months as major hospitals such as UCLA report patient infections, and other health organizations are calculating what might occur should no new antibiotic be developed to combat these infections. The predicted costs to the economy and to the insurance industry are expected to be substantial. One of the several superbugs is MRSA or Methicillin-resistant Staphylococcus aureus.

Now, as strange as it may seem, a story published in Forbes and other major news media today reports that a 1,200-year-old Anglo-Saxon remedy called Bald’s Eye Salve has proven “astonishingly” effective in battling the MRSA superbug, which kills more than 5,000 people a year in the US. The potion, composed of garlic, onion or leeks, wine, and ox bile, kills up to 90 per cent of antibiotic-resistant Staphylococcus aureus bacteria in mice, according to scientists at the University of Nottingham.

The Mediaeval treatment was rediscovered by Christina Lee, an associate professor who specializes in disease and disability in the Anglo-Saxon and Viking eras, who translated it from old English. The one thousand year old Anglo-Saxon remedy for eye infections which originates from a manuscript in the British Library has been found to kill the modern-day superbug MRSA in an unusual research collaboration at The University of Nottingham.

Dr Lee, an Anglo-Saxon expert from the School of English has enlisted the help of microbiologists from University’s Centre for Biomolecular Sciences to recreate a 10th century potion for eye infections from Bald’s Leechbook an Old English leatherbound volume in the British Library, to see if it really works as an antibacterial remedy. The Leechbook is widely thought of as one of the earliest known medical textbooks and contains Anglo-Saxon medical advice and recipes for medicines, salves and treatments.

Early results on the ‘potion’, tested in vitro at Nottingham and backed up by mouse model tests at a university in the United States, are, in the words of the US collaborator, “astonishing”. The solution has had remarkable effects on Methicillin-resistant Staphylococcus aureus (MRSA) which is one of the most antibiotic-resistant bugs costing modern health services billions.

The recipe, including detailed instructions on how long to chill the ingredients (nine days at 4C), was found in the leather-bound medical textbook from the 9th Century held in the British Library. “Medieval leech books and herbaria contain many remedies designed to treat what are clearly bacterial infections,” said Dr Lee.

Microbiologists recreated Bald’s Eye Salve as faithfully as possible, even using a wine from a historic vineyard near Glastonbury, and tested it both in vitro and on wounds in mice. They compared the results to those achieved previously with the individual ingredients. “We thought that Bald’s eye salve might show a small amount of antibiotic activity, because each of the ingredients has been shown by other researchers to have some effect on bacteria in the lab,” said microbiologist Freya Harrison. “We were absolutely blown away by just how effective the combination of ingredients was.”

Although developed long before the formal scientific method emerged, such remedies could have benefited from extensive trial-and-error research to determine what worked best. Many other books survive from the period with other treatments that might be similarly effective, Dr Lee said. A global hunt for new weapons against antibiotic-resistant infections was launched last year, spearheaded by British Prime Minister David Cameron. The results of the research on Bald’s Eye Salve were presented at the Annual Conference of the Society for General Microbiology, in Birmingham yesterday.

On March 20, 2015 Kimberly Evans was arrested by Los Angeles County Probation Department’s Special Projects Team on three felony counts (550 (a)(6) PC Insurance Fraud, Count (2) 487 PC Grand Theft of Personal Property, Count (3) 72 PC Presentation of Fraudulent Claim Count) and one misdemeanor count (471.5 PC Alteration of a medical record). Evans’ actions resulted in obtaining compensation that she would not otherwise be entitled to.

Evans is a sworn peace officer with the Los Angeles County Probation Department and is assigned to a Juvenile Detention Facility as a Detention Services Officer. An investigation by the Special Projects Team revealed that Evans allegedly altered medical documentation resulting in a loss of $1,707.20 during the time period she claimed as “sick time” on her time card.

This is the latest arrest as the Los Angeles County Probation Department continues to beef up its Professional Standards Bureau to crack down on insurance fraud and employee misconduct. “Within the last year the Department added a Special Projects Team comprised of four supervisory level investigators” says Jennifer Kaufman, Senior Director, “These investigators are specially trained to recognize the signs of workers compensation and/or medical fraud.”

Evans was arrested on three felony counts and one misdemeanor count of Fraud. She was booked at the Santa Clarita Sheriff’s station in Santa Clarita and bail was set at $30,000. The Arraignment date is pending.

Los Angeles police and firefighters work in a culture that encourages filing “excessive” workers’ compensation claims, according to a pair of city audits released Thursday and reported by the Los Angeles Times. And taxpayers are doling out up to $28 million a year for what amount to preventable injuries. The majority of injuries claimed by firefighters in recent years occurred while doing things other than responding to emergencies, including maintaining equipment, playing racquetball and preparing food at their fire stations, according to one of the audits by City Controller Ron Galperin.

L.A. police, meanwhile, are paid for on-the-job injuries more often than officers in comparable departments, the other audit found, at least in part because other departments don’t recognize sports injuries as “job-related.” Two-thirds of city firefighters and 60% of police officers filed an on-the-job injury claim in the last three years, the auditors found, and nearly half of those employees have filed more than one claim during that time.

The city audits come months after a Los Angeles Times investigation found steep increases in payments to injured police and firefighters, who receive 100% of their salaries, tax-free, for up to a year while off work recovering from seemingly job-related injuries. Only a small percentage of claims in recent years were attributed to injuries suffered fighting fires or confronting combative suspects, The most common cause was cumulative trauma claims that are not linked to a specific on-the-job injury. A disproportionate amount of injury pay was going to employees who filed consecutive claims, reporting a new injury just as a previous leave is about to end.

The city audits found, in all, that workers’ compensation costs for sworn employees have increased by 35% over the last five years to $141 million in 2014, including salary payments while the employees were off work, medical bills and other related expenses. Surveys sent to police officers by the auditors showed 45% agreed that there is an “excessive” number of workers’ compensation claims filed at the department, while a third of firefighters believed “questionable” claims had been filed by their colleagues.

The police and fire departments are shielded from the full cost of workers’ compensation claims because they don’t have to pay the medical bills, the auditors found. Those costs, nearly $85 million over the last four years, are covered by a separate city fund. The auditors recommended that the departments be made to pay medical bills out of their own budgets because “management may not be sufficiently aware of, or held accountable for, the impact of rising claims and costs.”

The departments suffer in other ways, however. Last year, fire officials told The Times they were spending more than $51,000 per day – or nearly $19 million annually – on overtime to cover shifts left vacant by firefighters out with injuries. At the Police Department, where overtime has been severely restricted, the rising number of injury leaves meant fewer officers on the street, officials said.

California legislators granted 100% pay for injured public safety employees during the Great Depression to ensure that those protecting the public wouldn’t hesitate to chase a criminal or run into a burning building for fear of losing their livelihood. But the design of the program invites abuse, city officials across the state told The Times. Because injury pay is exempt from federal and state income taxes, the employees typically take home significantly more money when they’re not working. And time spent on leave counts toward pension benefits. That creates a perverse financial incentive to file injury claims for relatively minor ailments and to stay out as long as possible, experts said.