Providers' Unmitigated Gall

Friday, November 9, 2012 | 0

A recent edition of WorkCompCentral arrived with the news that hospitals and device manufacturers somehow are arguing the huge overpayment for surgical devices in California is justified because of the “additional costs” of putting these devices in comp claimants.

Seems the California Hospital Association hired a consulting outfit to see just how much more costly it is to do surgery involving screws and cages and other hardware for people with occupational injuries than non-occupational ones. And, stunningly, it’s waaaaaaay more expensive!

Yep, wrenching that back lifting a stack of drywall at work requires surgery that is, well, different/more complex/more involved/more time-consuming/more lucrative than lifting drywall at home when you’re re-doing the family room. The doctors, facilities, devices, tools, patients, support staff, all are identical – the only difference is who’s paying for the device – workers' comp or Medicare.

The “disagreement” arises over a regulation proposed by DWC California that would set device reimbursement at 120% of Medicare. That’s ALREADY higher than Medicare, but not enough for the profiteers.

Writing in a recent WCC newsletter, Greg Jones reported that hospitals and their allies said “additional allowances for devices used in certain spinal surgeries are not enough to make up for lost revenue from eliminating the spinal pass-through.”

No $. It’s not supposed to. 

The “pass-through” provision allowed these providers to “pass through” grossly inflated charges to workers' comp payers. There’s more to it than this – of course – but the net is this.

Once again workers' comp is the trough. As friend and colleague John Swan often reminds me, pigs get fat, and hogs get slaughtered.

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