The Top Work Comp Stories for 2010

Monday, January 3, 2011 | 0

By Joe Paduda
CompPharma and Health Strategy Associates

Mergers, acquisitions, and buyouts

This has been a very busy year for the financial folks. OneCall Medical, Intracorp, Sedgwick, SRS, Concentra, and CS Stars were all bought/acquired/recapitalized in 2010, and there may have been a couple more if the tax treatment of these deals had changed in 2011. More on what 2011 may bring in my annual predictions post later.

Opioids in work comp

Workers' Compensation Research Institute, National Council on Compensation Insurance and the California Workers' Compensation Institute pretty much everyone who's anyone in work comp research highlighted the growing problem of opioid usage in workers comp this year. California saw a five-plus-times growth in the use of opioids, and other states were equally challenged. One can only hope that all the attention will force states, payers, providers, and employers to take major steps to attack the overuse of opioids.

Federalizing workers' comp

This gets the award for 'non-story that refuses to die'. The ongoing game of whack-a-mole continued throughout 2010, as any junior legislative aide who mentioned in passing workers' comp became "NEWS" to those who saw evidence of nefarious plans by the national gubmint to take over workers' comp. This started with inclusion of coverage for one condition in one town in one state in the reform bill, continued with the Baca bill (introduced for the umpteenth time and tabled for the umpteenth time), and now comes the 9/11 responders bill as yet more evidence of the 'drive to federalize'. (Jon Gelman is a very well respected attorney and effective advocate for workers' rights, but his decade-plus long effort to reveal this 'federalization' appears to be a classic case of finding links where there are none.

PPO litigation

The Louisiana appellate court's ruling against Coventry was notable not only for the amount of the penalty/fine $262 million but because it negated, or more precisely subordinated, provider preferred provider organization contract terms to onerous statutory notice requirements.

This marks yet another assault on the work comp PPO business, and follows several successful 'silent PPO' suits in Illinois.

Most Bizarre Story of 2010

Finally, the winner of the "Most Bizarre Story of 2010" has to be new Florida Gov. Rick Scott's claim he will cut Florida work comp costs by 35%. I guess the guv likes a challenge; before he even got into office he convinced the state Senate to keep employers' costs $34 million higher.

This is the same Rick Scott who received over $275,000 from AHCS (and affiliates), the Florida physician dispensing company that played a major role in forcing Florida employers to keep paying $34 million more for work comp drugs. According to the Workers' Compensation Research Institute, physician dispensed drugs are the main reason Florida's prescription drug costs were 38% higher than a 16-state average.

And the gravy train is still running; Green Solar, an affiliate of AHCS, donated $25 grand to Scott's inaugural...

Joe Paduda is co-owner of CompPharma, a consortium of pharmacy benefit managers, and owner of Health Strategy Associates, a Connecticut employer consulting firm. This column was reprinted with his permission from his Managed Care Matters blog, http://www.joepaduda.com