June 20, 2018

Guest Post: Case Management & Cost Containment Services: What Has and Has Not Changed

By Tim Hanson-Mayer, M.Ed., CRC

When I began my long and varied career in the workers’ compensation and disability management field back in the late 1970’s, there was a new and innovative service offering that promised to revolutionize the field of claims and injury management, and it was called – field case management. Field case management in the workers’ compensation and disability arenas grew out of the need that payers saw to better manage the medical and indemnity costs of their claims. The thought and the vision was that by having medical and vocational case managers visit and evaluate injured/disabled workers in their homes, they could obtain a clearer understanding about what was happening with the claim, whether or not it was moving toward resolution, and what needed to be done to resolve the claim in a timely and cost-effective manner.

My first case management employer in this arena was Intracorp, one of the first and most innovative case management companies in the industry. Their success spurred a rapid increase in the number of case management companies throughout the country, that today continue to be dedicated to serving injured/disabled clients and the payers of their benefits. Payers utilize a virtual national army of skilled, experienced and highly trained medical and vocational case managers; these experts wage ongoing battles against unnecessary and ineffective treatments, prolonged disability, uncooperative employers with insufficient understanding of the return to work process, lost productivity and ultimately, wasted lives. So what has and has not changed in the last 35 years?

As anyone familiar with the history of our industry knows, once case management companies learned that payers were willing to pay outside vendors to help contain their costs, they expanded their menu of services to include a variety of “cost containment” strategies, including discounted PPO networks, provider bill review, utilization review, telephonic case management, social security advocacy, independent medical examinations, and, more recently, Medicare set-aside assessments, medical cost projections, pharmacy benefit management, drug utilization review, peer review and outcome- based networks, among many other services. In addition to working to better manage and control their claims, payers wanted to control their costs and to reduce the amount of money that they paid out per claim. Thus, through the use of these services, they sought to provide needed medical care at discounted rates, and to control the nature and the volume of medical services provided to their claimants. Clearly, the provision of the same medical services at reduced costs, and the elimination of unnecessary services, on its face, seemed to be an investment with a clear and positive return.

As the amount of money payers paid out to these companies rapidly increased, to tens of millions of dollars annually, payers began to question the return on investment that they were getting on these services, and to demand outcome reporting and quality best practices from their vendors that would justify their outlays. However, rather than conducting their own internal studies on the cost of their own claims, and determining whether the use of managed care services actually reduced their costs per claim, payers asked their vendors to provide their own outcome reporting and documentation of value. Thus vendors engaged in a competition of outcome reporting, as to which ones could most convincingly document and justify the value and savings resulting from the use of their services. But as long as payers were unwilling or unable to provide or analyze their own data on the cost of their claims, the outcome reporting that vendors provided, as it impacted the total cost of claims, could only be speculative in nature.

More recently, companies that provide outcome-based networks have convinced some of their payer customers that, in order to evaluate the success of this service, they would need claims cost information, and this is a positive development in their ability to provide meaningful reporting. But is it realistic for vendors to provide return on investment data on all of their services?

In the group health world, clinical studies focus on the treatments, procedures and drugs that extend survival rates and result in cures. In this world, those with diseases desire only to be healed, cured, or to simply live longer with an improved quality of life. Thus the focus has been on survival rates and cures, and not on cost benefit or return on investment. It is important to note that developments in the rapidly evolving group health marketplace, most importantly an increase in government involvement due to the passing and implementation of the Affordable Care Act, will likely promote the increased use of such cost benefit analyses going forward.

In the workers’ compensation and disability management arena, the focus of studies has been on how services reduce the cost of claims, shorten durations of disability and assist payers in more cost-effectively managing claims. Injured and disabled workers seek not only cures, but also the ability to successfully return to gainful employment, and to maximize their financial security. It is primarily for this reason that, for injured and disabled workers, treatment guidelines oftentimes do not apply. Workers’ who are highly motivated to return to work will beat guidelines, while workers who are not motivated to return to work will inevitably exceed guidelines. It is difficult, if not impossible, to quantify client motivation and perceived self- interest. This brings me back to the matter of field case management.

In my early years of marketing case management services, we had a section in our newsletter that we called “Letters of Excellence”. In every edition we would publish a sampling of letters that we received directly from injured and disabled workers that extolled and praised the services of our case managers, describing how helpful they had been to our clients in overcoming their injuries and disabilities. The purpose of our “Letters of Excellence” was not to quantify cost savings, but rather to support our case managers, and to document what they were achieving in their day-to-day field work. I have long believed that the work that this army of medical and vocational case managers does continues to be under-appreciated, as well as under-documented in the professional literature, and in the past 35 years, this continues to be one thing that has not changed.

About Tim Hanson-Mayer
Tim Hanson-Mayer has worked as a certified rehabilitation counselor, supervisor and business/ marketing analyst throughout his long and varied career, with a focus on assisting clients in overcoming injury and disability. He received his Master’s degree in Rehabilitation Counseling from Northeastern University, and has published professional articles that include “The Clinical Model and Cost Effectiveness of Occupational and Environmental Medicine”, “The Workers’ Disability Syndrome” and “The Rehabilitation Crisis: The Impact of Growth”. In his most recent publication, “How Life Is: A Search for Meaning”, available at Infinity Publishing, he has broadened his focus to consider how we define and work to overcome life’s many challenges. Currently in private practice, he provides rehabilitation consulting and training services, and can be reached at thansonmayer@gmail.com.

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