Posts Tagged ‘Massachusetts’

2016 White Paper Evaluates Commonwealth Care Alliance

Monday, July 18th, 2016

In April, 2016, I authored a post about Commonwealth Care Alliance (CCA), a Massachusetts HMO dedicated to serving the Dual Eligible population. Duals qualify for both Medicare and Medicaid, and CCA has been the nation’s incubator for how to do that. The Boston-based HMO operates a Senior Care Option plan for Duals over the age of 65 and an Affordable Care Act demonstration project, called One Care, for Duals younger than 65. I’ve been a CCA Director since its inception in late 2003.

Now, with the support of the Robert Wood Johnson Foundation, JSI Research & Training, Inc., has published an extensive evaluation of CCA’s visionary and groundbreaking efforts to treat the nation’s sickest of the sick and poorest of the poor.

In JSI’s words:

The provisions in the ACA were designed to achieve the Institute of Health Improvement’s Triple Aim of improving patient experience of care and the health of populations while reducing the overall cost of health care.

The 22-page White Paper’s thrust centers around CCA’s “Social ACO” model of care. JSI describes the Social ACO approach this way:

These approaches are based on the idea that improving health and cost outcomes of vulnerable populations will necessitate incorporating health, behavioral health, and social services into the ACO model. Social ACOs serve populations with complex and often unmet social and economic needs that impact health outcomes and health system utilization, including needs related to housing, food security and nutrition, legal assistance, employment support, and/or enrollment assistance.

As I noted in April, Duals represent only 4% of the nation’s population, but consume 34% of its health care dollars. They present a societal problem begging for a solution. The Affordable Care Act offers revolutionary innovators like CCA the chance to prove their worth. So far, as the JSI paper suggests, CCA’s approach is spot on. Here’s JSI’s conclusion:

As a pioneer of the social ACO approach, its (CCA’s) story offers insights into the factors and processes that promote successful realization of the Triple Aim for other emerging ACOs focused on complex patient populations.

Payment and delivery reform promises to transform care for the nation’s most vulnerable citizens. This is needed more than ever given rising healthcare costs and continued fragmentation of the care system. CCA’s social ACO model represents one approach to caring for some of the highest risk populations, though even this approach has had to be adapted extensively for the dual-eligible population under 65. Given its longevity of refining a care model, a global capitation payment model and a culture of innovation to care for high-risk, vulnerable populations, CCA’s experience is relevant to any provider organization seeking to transform care for high-risk populations.

Achieving the Triple Aim of improving the health of America’s dual population while lowering the cost of doing so is a rabbit-out-of-the-hat trick of the first order, but, at least to this point, Commonwealth Care Alliance seems to be onto something that will do just that.

One final thought: On the eve of our two presidential conventions, it would be nice if, at some point in all the bloviation, a cogent discussion regarding health care were to be had. And I’m talking about something other than, “On Day 1 we’re going to repeal Obamacare.”

But I wouldn’t bet on that happening. Would you?

On The Passing of Paul Meagher

Tuesday, July 12th, 2016

Last week workers’ compensation lost a true professional and I lost a dear friend.

I first met Paul Meagher 32 years ago when he was Senior Counsel for Associated Industries of Massachusetts (AIM) and I was a young guy who thought he had a big idea. The idea was that if employers were educated about workers’ compensation they would approach it differently and losses and Experience Modifications would fall.

Paul believed in the idea. Workers’ compensation was entering a ten-year crisis, and AIM, at the time the largest such organization in America, needed a solution for its members. So Paul convinced the AIM hierarchy to launch a series of seminars around Massachusetts with my big idea as the centerpiece. And it worked. When employers saw there was a common sense, management 101 solution they took to it like water finding a crack in the floor. It culminated five years later with the creation of the Massachusetts Qualified Loss Management Program, which, along with sensible legislative changes, ended the crisis. A $2 billion dollar problem turned into a $1.3 billion dollar win for the state and its employers.  And it never would have happened without Paul’s steady, shoulder-to-the-wheel work.

Paul went on to become the President of the Massachusetts Workers’ Compensation Rating & Inspection Bureau. He captained the Massachusetts workers’ compensation ship for 16 years until early Saturday morning, July 2nd, when he suddenly, but peacefully, died in his sleep in Maine on the first day of a much deserved vacation. He was only 64 years old.

If you met Paul you would have instantly underestimated him. He had not one gram of outsized ego in his body. His leadership style was calm, even quiet. He was perfectly happy to surround himself with people he judged smarter than himself. He played the steady, unassuming jockey sitting atop the speeding thoroughbred, nudging it along without the horse even knowing he was there. In a world of masses on the make, he just did his job, and the continued exceptional success of Massachusetts workers’ compensation is all the proof you need.

But worker’s compensation, while an important part of his legacy, pales beside the deeper, broader person who adored Addy, his wife of nearly 40 years, and Madeline and Michelle, his two accomplished daughters. When we talked about our families at our regular lunches he would ooze pride in those two young women. About a day and a half before he died we spent an hour on the phone, 40 minutes of which was devoted to his two daughters and my two daughters. He and I were entirely different people, but we were cut from the same cloth when it came to our pride in our children.

Paul made me understand why humility is such an important virtue. He was a successful person who could have flaunted his success, but never did, not for a minute; it just wasn’t in his nature.

The workers’ compensation industry will find a replacement for Paul Meagher. I won’t.

The Sickest Of The Sick, The Poorest Of The Poor

Tuesday, April 5th, 2016

They comprise less than 4% of the nation’s population, yet consume nearly 34% of health care dollars. Sixty percent are age 65 or older. About 40% are younger people with ADL-qualifying disabilities. More than half fall below the federal poverty level. Almost half never graduated high school. Nearly two-thirds are female. Fifty-eight percent are white/non-hispanics.

They are America’s “Dual Eligibles,” our fellow citizens who qualify for both Medicare and Medicaid benefits. Technically, because they’re Duals, they are not the “uninsured.” Still, they sit smack dab in Obamacare’s bulls eye.

In 2003, here in Massachusetts, a pioneering visionary decided to create a non-profit HMO that would offer as its sole product a Senior Care Option plan aimed at the over-65 Dual population. As a former head of the Long-Term Care Division within the Commonwealth’s Medicaid Program, Mass Health, Dr. Bob Master knew a lot about the Duals and the many challenges they presented. Somehow, he convinced a few academics and business people to join his brand new Board of Directors for his Quixotic quest. I was one of them.

In the early days, the hunt for funding was all-consuming, but against considerable odds, funding was found, and, with the support of CMS and Mass Health, an incubator for the nation was born – Commonwealth Care Alliance.

Bob immediately set out to prove that Duals could achieve significantly better health and well-being at lower cost if they were cared for in a home-based regimen by highly trained teams of providers. And between 2003 and 2014, CCA produced eye-popping proof of concept results. For example, thirty-day hospital readmission rates for these sickest of the sick and poorest of the poor consistently beat Medicare’s overall rate. CCA achieved annual Medicare star ratings of 4.5 or better (Because of Senior Care Option demographics, it is statistically impossible for the company to achieve a higher rating).

CMS took note. And when medical, academic and political luminaries were crafting the Affordable Care Act, Bob was instrumental in convincing them Duals were a target not to be missed.

Consequently, the Affordable Care Act created demonstration projects in nine states from California to Massachusetts to see whether it’s possible to improve the health of all Duals, those over the age of 65 as well as under it, while reducing their health care costs. A tall order, indeed, because it had never been done before.

CMS and Mass Medicaid issued a humongously big RFP. Commonwealth Care Alliance answered it and won the right to play in the new sandbox, called One Care. The year 2014 was spent in preparing. For example, in order to be ready, the company had to double the size of staff (there are now more than 800) and train the newbies to successfully manage CCA’s unique model of care. That was not easy.

In early 2015, we opened the floodgates to the state’s thousands of Duals under the age of 65. Since then, it’s been a thrilling ride, because throughout 2015 CCA had a few near-death-experiences. But with the help of both CMS and Medicaid we were able to negotiate the potholes and speed-bumps, and now, after more than a few sleepless nights, the company cares for more than 17,000 Duals with Medicare and Medicaid premium of more than $850 million. In essence, CCA is beginning (barely) to do well by doing good. To my mind, if the Affordable Care Act, Obamacare, does nothing more than significantly improve the lot in life of the nation’s Duals while lowering their cost of care, it will be a success of the first order.

Now, it’s time to turn the reins over to a new era of leadership. Last Friday, we had a retirement party for Bob Master where CCA employees who could free themselves from work for a couple of hours came to Boston to say hail and farewell. Many came on their own time. There was a great big cake and a lake-full of diet soda and coffee, but no dignitaries, just current staff and a number of Directors. The Chair of the Board said nice things about Bob and the ride we’d all been on. I described how, after all this time, Bob and I had discovered less than a year ago over lunch that, in addition to growing up in the next town to each other, we had been comrades in arms back in the late-60s in Vietnam; in the same Division, even, at the same time. Funny, that.

Many employees read stories they’d prepared for the occasion. Honest tears were shed. Bob gave an extemporaneous speech that was heartfelt and touching. He thanked all who had joined in the noble quest, many by name. Then he rode off into the sunset.

But the work goes on.

 

 

 

 

Massachusetts: Governor Adding Insult to Injury?

Wednesday, April 24th, 2013

We have long touted Massachusetts as the gold standard for workers compensation reform. In 1990 the state operated the second or third highest cost comp system in the nation; today MA is ranked 44th, with rates less than half of those in the other New England states. At the same time, the benefit structure is relatively generous, with a maximum indemnity wage of $1,150. The “taxachusetts” label applies to many aspects of living in the Bay State, but the cost of workers comp insurance is certainly not one of them.
But as is so often the case, failure lurks at the edge of success. The Insider has written extensively about the rate suppression that is opening like a sink hole below the market. The comp rates are so low, even good risks become questionable, simply due to the law of averages. Any company in MA with a .80 mod is by definition a marginal risk, because there is not enough premium to cover the exposure.
Generous to a Point
While benefits for injured workers are for the most part generous, there is one aspect of comp where state benefits fall short of what is needed and what is available in most states: injured workers only receive 60 percent of their average weekly wage, compared to the 66 2/3 percent or higher offered in other states. The 60 percent figure emerged in negotiations during the monumental reforms of 1990; even then it seemed harsh to extract savings from the pockets of those least able to afford it.
Now, in a desperate effort to increase revenues, Governor Deval Patrick is proposing that workers comp indemnity benefits be taxed. As a result, the already reduced 60 percent would be reduced another 4-6%, depending upon the final income tax rate in the new budget. Such taxation would violate the spirit of workers comp and exacerbate the stress of being injured and out of work. One of the unintended consequences of such a tax would be to push injured workers into the hands of attorneys, who thrive on friction and live off the most inefficient and expensive part of comp, cash settlements.
A Matter of Fairness
There are many factors contributing to the MA success story: a stingy fee schedule that doctors abhor, reduced reliance on settlements, which antagonizes claimant attorneys, a speedier dispute resolution process, and a reduction in indemnity benefits for workers.
In the Bay State, injured workers have already paid a price for the lower costs of workers comp. It would be unfair to ask these workers to make even greater sacrifices, when workers in other states receive higher benefits with no taxation. No matter what the rationale for taxing indemnity benefits may be – supporting education, fixing infrastructure – the measly $8 million raised by such a tax would be insignificant when compared to the cost to those least able to absorb it. It’s hard enough suffering through the pain of injury and recovery without adding insult to injury by further reducing already reduced income. This is a very bad idea and it should be tossed from the budget immediately.

A Modest Proposal for New York

Monday, November 5th, 2012

New York’s workers’ compensation system has taken a few high hard ones to the head lately. Premiums are now the 5th highest in the nation (according to the well-respected “2012 Oregon Workers’ Compensation Premium Rate Ranking”); its surcharges are the highest in the nation; the Spitzer reforms, aimed at reducing costs to employers and improving care for injured workers, have done neither; attorney involvement is among, if not the, highest in the nation; the house-that-Jack-built bureaucracy is cumbersome and unwieldy; and all the parties in the system, every last one of them, bemoan what they perceive to be a train wreck of monumental proportions.
At the same time, New York’s Workers’ Compensation Board has come under wilting criticism from nearly all quarters. Mike Whitely, from Work Comp Central, has been doing an excellent job of reporting and documenting the whole thing. Last week, the New York Business Council weighed in with some heavy artillery of its own. In short, everyone’s frustrated, and tempers are frayed.
I know the Board’s senior management, and I am absolutely convinced that all of them, from Jeff Fenster on down, are highly dedicated. These are competent professionals doing the very best they can, but they are up against long odds. They are David with a broken slingshot, and Goliath is growing bigger every day. It does not appear that New York’s loggerheaded vested interests – lawyers, doctors, insurers, unions, the Legislature, employers, and more still – will come to any grand bargain anytime soon.
So, is there anything the Board or anyone else can do to create some positive, forward momentum? I think there is, and it involves what is known as Code Rule 60, which is the New York Department of Labor’s Workplace Safety and Loss Prevention Incentive Program. It’s sometimes known by its really catchy and memorable acronym, WSLPIP. Code Rule 60, which came into being in September of 2009, is supposed to help employers establish DOL certified and approved safety, return to work, and drug and alcohol prevention programs. Participating employers receive premium credits: 4% for safety, 4% for return to work and 2% for drug and alcohol prevention. The credits run for 3 years (but the two 4% components drop to 2% in the second and third years) and are renewable. Only employers with experience modifiers of less than 1.3 are eligible (although why the state prohibits employers who would seem to need it the most from participating is a piece of logic beyond my comprehension).
The premise of Code Rule 60 is that employers who establish these programs will have safer workplaces and, eventually, lower costs. Not a bad idea. The problem is that the DOL has made the program so ridiculously bureaucratic that it would be easier for a New York employer to find his way through a dense maze of thorns, blindfolded, than to negotiate the journey to Code Rule 60 certification. Don’t believe me? Here is the official Labor Law Regulation (PDF), in other words, the way through the thicket. It’s 20 pages of dense bureaucratese. Busy employers find it nearly impossible to wade through the legal Pig Latin.
Code Rule 60 is totally process driven. There is no performance requirement. No performance measurement. Just build a certified program, and good things will happen. Maybe. The New York DOL doesn’t seem to care if the program reduces loss costs. All the DOL wants to know is: Have employers built their programs the way we told them to build them?
With the preceding as background, you might be forgiven for asking how successful has the program been? Regardless of whether they’ve reduced loss costs, how many employers have succeeded in getting those precious premium credits? Even the New York Business Council couldn’t find out, but, anecdotally, the number is fewer than five. Since September, 2009.
So, here’s my proposal: First, scrap Rule 60. It’s not working, and it never will in its present form. Second, Jeff Fenster should pick up the phone and call Paul Meagher, the highly respected President of the Massachusetts Workers’ Compensation Rating and Inspection Bureau (WCRIB). Why? Because long ago at the height of the Massachusetts workers’ compensation crisis, when 65% of the Commonwealth’s employers were in the High Risk Pool, Mr. Meagher was instrumental in establishing the Massachusetts Qualified Loss Management Program. The QLMP (later replicated in Missouri, West Virginia and New Hampshire) is totally performance driven, and it played a big role in the Massachusetts workers’ compensation turnaround, the continued success of which was documented last week by the Workers’ Compensation Research Institute and last month in the Oregon study.
Here’s how it works. Premium credits accrue to Loss Management Consulting Firms whose Massachusetts customers the WCRIB certifies have reduced their loss costs in the year following engaging a firm. The greater the loss cost reduction, the greater the credit, up to 15%, which is then passed on to the Loss Management Consulting Firm’s customers in the succeeding year. Lower loss costs mean lower premiums for employers. The Loss Management Consulting Firms have to requalify every year. So, if a Firm’s results slip, it will see its credit, and probably customer portfolio, reduced. In the QLMP, all of the incentives are lined up so that everyone is motivated towards reducing costs, while providing safe workplaces and high quality care for injured workers. (Full disclosure moment: The QLMP was an idea I gave to the WCRIB and the Massachusetts Division of Insurance).
Here are the rules for the Massachusetts QLMP (PDF), with a Q&A at the end. Four pages, written in simple English that any employer or agent can understand.
Senior management of the New York Workers’ Compensation Board has told me on many occasions that their overarching goals are to reduce costs to employers and to see that high-quality care is provided to injured workers. It’s obvious that Rule 60 is doing neither. A New York version of the Massachusetts QLMP would be a good first step in that direction.

The Enigma Variations: Comp Rates in Connecticut and Massachusetts

Wednesday, October 17th, 2012

Today we examine two states, side by side on the map, going in opposite directions in their workers comp rates: Connecticut, which has the dubious distinction of being the second most expensive state (only Alaska is higher) and Massachusetts, ranked 44th for overall costs, with rates so low the market is beginning to implode. These states may be headed in opposite directions, but each faces a pending crisis.
Messing with the Miracle
We begin with Massachusetts, which my colleague Tom Lynch summarized brilliantly a few weeks ago. After nearly two decades of rate reductions, MA employers are now paying about the same rates as existed in the early 1980s. Compared to the other New England states, MA rates are consistently lower, some times one fourth that of their neighbors. So it is hardly surprising that the Workers Compensation Rating and Inspection Bureau (WCRIB) sought an increase in the rates: they initially requested 18 percent, with the realistic hope of ending up somewhere in the vicinity of 6 to 8 percent. A rate increase of this magnitude would maintain the state’s position as the lowest among the major industrial states, still far below its New England neighbors.
The response of the state’s Division of Insurance is, in its methodology and ultimate result, a public work that might make the infamous Big Dig seem prudent and reasonable. The Division dismantles the entire application, demeaning and ultimately dismissing virtually every data element supporting the rate increase. While it is true that some of the data was inconsistent – due largely to the idiosyncracies of insurer submissions – the report’s conclusion that no rate increase was merited defies common sense. Indeed, when the attorney general opines that higher rates “would greatly increase the cost of doing business in Massachusetts and have a deleterious effect on the overall employment level,” one can only wonder what they have been smoking – perhaps the substance on the ballot up for legalization next month.
One the mainstays of the Division’s argument is the fact that insurance carriers continue to offer rate deviations: proof, in the Division’s eyes, that the rates must be high enough. Perhaps it is time to remind the bureaucrats who administer this program that insurers always think they can defy the odds and find the optimum risks. Insurers sell insurance to the people and organizations least likely to use it – or so they hope. As Tom Lynch likes to say, “insurance companies are prone to eating their young.” Nonetheless, a glance across state lines and across the country reveals that Massachusetts is about to cook the golden goose: with the current unabated rate suppression, the assigned risk pool will continue to grow and savvy carriers will scale back their participation in the workers comp market.
Asleep at the Wheel
While Massachusetts’s inaction on rates jeopardizes the most successful comp reform program in the country, Connecticut meanders toward economic disaster. As recently as 2008, the state was ranked 20th for overall costs in the invaluable Oregon Rate Study. But in 2010 they rose to 6th, and the state now sits in the number two spot, ahead of such reliably high cost states as New York, California and Florida. The median cost of comp in CT has risen to $2.99, compared to the nation-wide average of $1.88. (MA comes in at a paltry $1.37.) CT suffers from a toxic combination of very high medical costs (doctors love it) and a worker-centric system that is extremely generous with benefits. To add insult to injury, NCCI is requesting an additional 7.1 percent increase in the already bloated rates. Costs are out of control and regulators are asleep at the wheel.
Surely it is time for business advocates in Connecticut to raise the red flag. The cost of comp has reached unacceptable levels. When business owners can move their operations to New York to lower the cost of workers comp, you are in deep, deep trouble.
Across the Rate Divide
MA and CT provide compelling examples of enigma variations: in the perpetual search for comp rates that are fair to both carriers and businesses alike, these states have drifted too far from the middle ground. How they reached this point may be an enigma, but what they need to do is clear: take immediate steps to extricate themselves from rate cycles that simply are not working. It will take leadership, vision, and courage to confront these reverse-image crises.

In MA, regulators must stop playing political games – no easy task in a hyper-political state – and allow rates to begin a long overdue, moderated rise.

In CT, regulators must confront entrenched stake holders and begin to exert control over runaway costs.

With rates either much too low or much too high, state leaders and regulators are mired in swamps of their own making. If the current inertia is allowed to continue, the two states may eventually end up in the same place: with dysfunctional comp systems incapable of serving the needs of injured workers and employers alike.

Massachusetts Insurers Take One for the Team (Again)

Tuesday, September 11th, 2012

I have written before about what I consider to be a true Massachusetts Miracle: The 1992 reform of the Commonwealth’s workers’ compensation system and the results achieved following that reform. Bottom line – premium rates in Massachusetts are among the lowest in the nation while benefits are among the highest.
To make that happen back in 1992 all of the varying and vested constituencies had to come together and enter a grand compromise where everyone lost something so that the system could flourish as it has ever since (I won’t bother to mention that the current crop of folks we Americans have sent to the nation’s capital might learn something from this).
Employers and injured workers have benefited hugely from the 1992 reform. Insurers not so much, especially lately. Early this year, the Massachusetts Workers Compensation Rating and Inspection Bureau, representing insurers doing workers comp business in the Commonwealth, requested that Massachusetts Commissioner of Insurance, Joseph G. Murphy, approve a premium rate increase of 18.8%. After the Division held hearings and thought about it for a while, Mr. Murphy announced that he was denying the request – all of it. Result: Status quo, just as in New York a few weeks earlier. But if you think about it, this might actually be an insurer victory of sorts, because Massachusetts Attorney General Martha Coakley had made her own rate filing, which called for a reduction in rates of 8.8%. After Commissioner Murphy announced his decision, Ms. Coakley issued a press release saying, “The industry’s request to raise rates could not have come at a worse time for small businesses in Massachusetts.” She also congratulated herself and Commissioner Murphy by saying, “The decision will save Massachusetts workers compensation insurance customers approximately $175 million compared to the rates they would have paid if the proposed rate hike was approved.”
The decision will also cost the Commonwealth’s insurers the same $175 million.
But let’s get real for a minute. As Bill Clinton said last week, “It’s all about the arithmetic.”
Now, there are many variables impacting premium rates in any state. For example, workers compensation medical loss costs have been rising in Massachusetts. Just a couple of years ago they comprised an enviable 36% of total loss costs; now they’re up to about 40%, and rising. But I thought perhaps I could put things in perspective if I just looked at the Massachusetts evolutionary development of a few key factors since the 1992 reforms. And those factors would be workers compensation premium rate changes, wage development and the progression of the CPI. The data in the chart below is taken from the Bureau of Labor Statistics, the Massachusetts Division of Unemployment Assistance and the Massachusetts Department of Industrial Accidents (DIA), summarized in the Massachusetts Division of Insurance’s Annual Report of 2010 (PDF) and DIA Circular Letter 336, dated 6 October 2010 (PDF).
ma-rate-changes
In the 17 years since 1994, there have been six years with double digit rate reductions, the largest being 21.1% in 1998, five years with single digit reductions, ranging from 1% to 4%, five years without change, and one year with a whopping big rate increase of 1%. The result is that rates in Massachusetts are where they were in the early 1980s. One by-product of this situation is that many Massachusetts employers seem to have lost the sense of urgency when injuries occur.
On the other hand, the CPI has increased every year since 1994 with the exception of 2010, when there was no change (it’s interesting to compare the CPI development with periods of recession; look at 2009 and 2010, for example), and the average weekly wage in the Commonwealth has grown from $586 in 1994 to $1,088 in 2010 (in 2012, it’s now more than $1,100).
The result shows a steady increase in costs and a steady decline in rates. I have to say that the reductions from 1994 through 1999 were entirely appropriate; those are the result of the 1992 reform. However, the six years with reductions since then, totally 28.3%, are questionable.
The consequences of both Commissioner Murphy’s current decision as well as the recent reductions are now being felt. The Massachusetts Assigned Risk Pool is growing quickly; in the last year it’s jumped from 12% of the market to 15% ($152 million in premium), and that was before the decision of two weeks ago. It would not surprise me to see Pool growth accelerate in the immediate future.
You can only keep the pressure cooker’s lid on for so long.

Franchisees: Independent Contractors or Employees?

Tuesday, September 6th, 2011

We have been tracking the fate of the FedEx business model in state courts as it collides with increasingly stringent definitions of “employee.” FedEx operates under a sophisticated and ingenious contract designed to transform their drivers into “independent contractors.” It’s been a tough haul. For the most part, FedEx has been losing the argument in courts, state by state, and then delaying any ultimate resolution by filing appeals. Today we examine a similar business model: cleaning operations that are classified as franchises.
Coverall North America is one of the largest franchise cleaning operations in the world, with 9,000 franchise owners, 50 support centers and 50,000 customers. Franchise owners are trained by Coverall, wear Coverall uniforms, use Coverall mandated supplies and receive payment for their work through Coverall. Coverall bills customers and then pays the franchise owners, after deducting management and royalty fees plus any other incurred expenses.
The Massachusetts Standard
Unfortunately for Coverall, they have the burden of demonstrating franchisee “independence” in Massachusetts, which has a very tough, three-pronged standard for independent contracting [Ch. 149, Sec 148B]:
1. The contractor operates free from control or direction
2. The work of the contractor is fundamentally different from the work of the general contractor/owner
3. The contractor operates an independent business and is free to offer services to anyone
Under the MA requirements, independent contractors must meet all three criteria. Coverall first encountered the problem when out-of-work franchisees filed for unemployment benefits. The MA Division of Employment & Training focused on the third prong, determining that franchisees were indeed employees of Coverall, as their work was limited to that secured through Coverall.
In a case brought in Federal Court, franchise owners sought summary judgment against Coverall for the deceptive and unfair labor practice of calling them “independent contractors.” U.S. District Court Judge William Young got the case. He focused on the second prong: Coverall had to demonstrate that they were in a fundamentally different business than their franchisees.
Coverall fashioned a clever but ultimately unsuccessful defense: Coverall corporate is not in the cleaning business, but in the franchising business. Coverall corporate trains people who clean offices and Coverall manages the finances of franchisees, but no one in Coverall actually cleans. Judge Young did not buy that argument. He determined that Coverall provides the administration for the franchisees, who provide the cleaning services. One cannot exist without the other. He granted summary judgment to the plaintiffs.
Who Works for Whom?
We are by no means at the end of this seemingly endless attempt to separate independent contractors from employees. What is at stake is pretty obvious: work performed by employees is a lot more expensive than that performed by independent contractors. The lives of most people working as “independent contractors” are difficult; the hours are long, the pay is marginal, the benefits non-existent. And if injured, these folks are usually on their own.
Listen to the names of some of the plaintiffs in this particular case: Aldivar Brandao, Denisse Peneda, Jai Prem, Pius Awuah, Benecira Cavalcante, Nilton Dos Santos. Can you hear exotic music in the names of people born in other lands? And can you hear something more ominous: the dissonence and dislocation of immigration, the struggle to survive in a new land that seemed full of promise from afar, but which has proven to be harsh, stingy and relentlessly demanding?
Welcome to America, employees of Coverall!

Health Wonk Review’s Health Policy Heat Wave and assorted work comp news briefs

Thursday, August 4th, 2011

Joe Paduda has posted a steamy Health Policy Heat Wave edition of Health Wonk Review over at Managed Care Matters. He notes that “Far from the summer doldrums, activity related to the debt limit, IPAB, Medicare reform and Health Exchanges is at a late-September pace.” Get in on the action, Joe always hosts a lively and informed edition.
Coming & Going – Roberto Ceniceros discusses the compensability case of a NC public school principal who was shot while driving to work. This is an interesting case because the principal was conducting phone business on a school-issued phone while commuting and he was also paid for travel expenses. He was awarded benefits, but the case is headed for appeals court. Ceniceros notes that injuries that occur during a commute generally are not compensable. He also notes that this might be some of the earliest case law on this issue. And with the brave new world of ubiquitous work enabled by mobile devices, it surely won’t be the last.
Radical change – Peter Rousmaniere talks about the recent Illinois workers’ comp reform and the radical change that the reform signified for workers’ comp, change that he notes has largely gone unnoticed. He discusses two significant issues that surfaced in the reform: the “nuclear option,” which Rousmaniere noted “freaked out almost everyone” – yet despite the dramatic language, an opt-out or non-subscribe program has long existed in Texas. The second issue that he notes is “an easy-to-overlook provision” that allows for union carve outs, which he discusses in greater detail. Peter’s take on all things workers’ comp is always well worth reading.
FL CFO tackles check-cashing fraudWorkCompWire reports that the Florida CFO will be reviewing check cashing services for collusion in workers’ comp fraud, which is said to be diverting more than a billion dollars from Florida’s economy. According to CFO Jeff Atwater, this latest workers’ compensation premium scheme is highly organized and orchestrated by individuals who know the construction and subcontracting industry and are intent on evading payment of workers’ compensation premiums.
MA AG recoups millions in drug overcharges – In the latest of a series of settlements, Rite-Aid will pay $2.1 Million to resolve allegations of prescription drug overcharges. The settlement is the 5th in a series of similar settlements, the result of an investigation by Attorney General Coakley’s office into prescription drug overcharges by pharmacies to public entities under the workers compensation insurance system. Settlements now total $7.9 million. Walgreens recently settled for for $2.8 million. Other pharmacies with settlements include CVS, Shaws Supermarkets, and Stop & Shop. Recouped money will be returned to cities and towns.
OH BWC publishes Facebook fraud page – If you commit workers comp fraud in Ohio, you may find your photo on Facebook. Yesterday, we posted about workers’ comp and social media, so we were interested to see that the Ohio Bureau of Workers Comp has launched a special investigations Facebook page. It will include news on recent investigatory action, a most-wanted section and a link to report fraud. The page can be found at www.facebook.com/ohiobwcfraud
World’s scariest job? – If not the scariest, it certainly is a contender: Chinese Road Workers. For other scary jobs, see our post on the workers on the cruise from Hell and the untethered tower workers. I’ll stick with blogging, thanks.
Quick takes

Managing Chronic Pain, Revisited:

Tuesday, June 21st, 2011

We posted earlier this week on draft guidelines for pain management issued by the Massachusetts Department of Industrial Accidents. While we found much to like in the draft, our colleague Peter Rousmaniere, proprietor of his own blog on immigration issues, finds that the guidelines leave much to be desired. He views them as somewhat of a mincing mini-step in an area where rather big strides are needed.
Here are his thoughts on ways to make pain guidelines more effective:

Workers Comp Insider alerted us on Monday to the publication of draft chronic pain guidelines by Massachusetts DIA.
Medical treatment guidelines are helpful where clinicians, payers and courts desire an authoritative third party to say if and when a treatment is appropriate. But the value of guidelines really strikes home not only in the details but in how they pick their topics. Only so much can be covered proficiently. Guidelines need to focus on pressing matters of protecting lives and husbanding scarce resources. Then even the non-clinician in workers comp can say, “I may not understand all the medical details, but I know that these guidelines speak to my top concerns, and I will respect them and promote them accordingly.”
Perhaps because workers comp chronic pain treatment guidelines tend to avoid some of the most pressing issues for claims payers, they are not as useful as they could be. Perhaps also because claims payers feel free to ignore them, which they regularly do, we don’t see a visible, sustained effort within the claims payer community to improve the management of chronic pain cases.
Something for the Pain
One thing the guidelines have done laudably is to alert their readers to the very important patient safety issue when opioids are prescribed. This is very important: claims payers usually don’t require periodic drug tests for injured workers who have been prescribed opiates and they rarely are trained to respond when a test shows that the patient’s urine has no trace of the prescribed drug.
On balance, the Massachusetts guidelines, like other chronic pain guidelines used in the workers compensation community, are rather narrowly focused to the point where their usefulness is compromised. These various guidelines focus on non-surgical treatment of patients after they reach the stage at which they can be called chronic pain cases, and before they become extended, multi-year dependents on pain medication.The proposed guidelines devote just a few summary paragraphs to a challenge of the highest importance to claims payers: knowing the specific steps physicians can take to help their extended treatment patients improve their pain experience and function.
Predicting Pain
None of the current guidelines invest any time in describing the quite rich and fertile topic of chronic pain prevention among newly injured workers. Prediction and prevention are areas in which only a few occupational medicine doctors and nurses have achieved proficiency. Claims payers should focus on the need to identify chronic pain risk and encourage doctors to intervene as early as possible, when chronic pain risk, having been identified, can be addressed before the downward cycle begins. Unfortunately, you won’t learn about these best practices in these or in other state-promulgated guidelines. (I have proposed that chronic pain predictive models, matured through the wisdom of many, be placed in the public domain and inserted in treatment guidelines.)
Why these gaps? I wonder if the claims community has taken the time to communicate its concerns about chronic pain, so that guideline editors might address them? I imagine that they were back at the office, unaware of guidelines being drafted, and deeply involved in the deep stack of files that welcome them every working day.
Let’s Talk!
An inconvenient truth for workers comp claims payers is the universal endorsement of counseling intervention. Virtually all the chronic pain guidelines share a high regard for the psychological dimension of non-cancer chronic pain, which surfaces in pain perceptions and beliefs, catastrophizing, poor locus of control, and other traits that can be both measured and altered. The guidelines recommend time-limited cognitive behavioral therapy, the kind used to help you, say, overcome your anxiety about elevators, re-injury, or perpetual pain. The Massachusetts guidelines contain within their relatively thin girth a full-throated endorsement of psychological intervention – and that’s a good thing.
Unfortunately, most claims adjusters refuse to recognize the importance of cognitive therapy. They will have none of it and will deny treatment if the word “psychology” is attached to a request for treatment. The adjusters argue that once they allow psychological treatment, the workers comp courts will require them to pay for a lifetime of counseling intervention. I’ve heard this argument a lot. I wonder if the claims community and treatment guideline editors have ever had an extended discussion about psychological services and how to frame the issue to be most useful in a workers comp setting.
While the proposed pain guidelines leave a lot to be desired, I believe that an effective strategy for controlling chronic pain risk is within reach. Pain management is an essential element of any cost reduction strategy. If states can begin to draft chronic pain treatment guidelines that are more prescriptive, more specific and more focused on prediction and prevention, we would take a giant step toward bringing the costs of many large comp claims under control.
Submitted by Peter Rousmaniere