By Tom Herndon, COO, Medata
If someone threw a basketball and a golf ball at you at the same time, which would you try to avoid?
Most people try not to take the hit from the larger basketball even though the golf ball can do significantly more damage. A basketball slammed into your face hurts, but a golf ball can cause contusions, a concussion and even death.
This analogy plays out in the world of managing comp claims; a small percentage of the claims pack the heaviest punch. Savvy payers know they need to apply their claim management resources to a relatively small percentage of claims, but say it’s difficult to identify them.
The first step is to get the distracting basketballs out of the way by auto-adjudicating the simple, medical-only claims and using predictive modeling to identify the claims at risk for expensive outcomes.
The good news is the majority of comp claims are medical only. With these, you can empower providers to treat within guidelines for the first 30 to 45 days without the need for utilization review. Invest in claims and bill review systems that monitor the claim within business rules and automatically pay the uncomplicated “basketballs.”
Some payers say as many as 45% of their claims go through without being touched by an adjuster. Interfaces with managed care vendors enable pharmacy or medical bills to head straight to the claims system, where appropriate discounts are taken and the check is written. The system needs to be able to flag extended durations, migrating diagnosis, exceeded dollar thresholds and other signals that a claim is off track and alert the adjuster.
To really experience the value of auto-adjudication, claims managers need to get over the fear that they may inadvertently pay for something that should not have been compensable. The cost of one un-compensable treatment pales in comparison to the cost of actively and aggressively managing every single claim.
Auto-adjudication frees valuable resources to target the golf ball claims. These are the ones with lost-time and complex injuries involving more than one body part and multiple physicians. They may be cross-overs, claims that started out as medical or enhanced medical only, but turn into lost-time. (Enhanced medical means the claim’s medical costs exceed $1500 and/or the claimant needs at least six months of medical treatment.) Predictive modeling using Evidenced Based Medicine (EBM) guidelines, ICD9 codes, co-morbidities and demographic factors help identify the cross-over claims that need to be proactively driven.
Driving complex claims relies on the new work disability prevention model , which has been promoted so well by Jennifer Christian, MD, MPH. The process focuses on anticipating and assessing the total impact of the workplace injury or illness and actively driving toward the best, achievable overall outcomes.
Traditional claims management is reactive; it focuses on processing and adjudicating claims accurately and promptly paying benefits. The payer responds to past events, which is a bit like driving with your eyes on the rear view mirror. To pro-actively manage a claim you need to look ahead.
Early intervention is the key to disability prevention. Within 48 to 72 hours, an action plan should be developed and communicated to all parties involved in the claim. The plan defines the main goal, the highest achievable outcomes, using evidence-based medicine guidelines along with claimant demographics such as marital status, age, gender, co-morbidities, and ICD9 codes. And, it lays out the processes for getting to the goal.
Think of it as marking a road map or setting your GPS for a long trip. Determine the destination, and then figure out what you need to get there. This includes engaging appropriate managed care services and setting expectations for each party to the claim — managed care partners, medical providers, employer, adjuster, and especially the injured employee. When a person is hurt on the job, he or she is thrown into a confusing and frightening world and may be isolated from colleagues. Claimants need to know someone cares about them and what to expect, as illustrated in this letter from the employer:
Dear ( )
I am sorry to hear about your work-related injury and I understand how concerning this time may be for you.
My records indicate that on (date), you sustained a (____) and that you are a ______ who is ____ years old. Your job physical requires you to be able to __________.
If any of this information is incorrect, please contact me at _________so we can update your records and this recovery plan.
While you do not feel well at this time, you should be feeling better in roughly ___ days. If you’re not feeling better by then, please contact me and your physician so we can make sure you are receiving appropriate and prompt medical care.
Of course, all the stakeholders need to be on the same page regarding recovery time, treatment and return-to-work goals. Again, payers need claims and bill review systems that can build and hold an action plan and monitor the claim with purpose-driven rules that systematically apply appropriate resources at the right time. The claims workflow should incorporate presumptions and expectations for adjusters to follow and mechanisms that enable them to modify the plan. And, it needs to be able to consistently communicate with all the stakeholders at the same time.
Finally, speed is of the essence. Not only do lost-time claims incur indemnity costs, but medical and pharmaceutical costs pile up as they age. The employer has lost – at least temporarily – a skilled and productive member of its workforce and may be paying temporary workers or over-time to fill the gap. The injured employee is cut off from his/her colleagues and the identity that comes with a job. Studies show that 50% of the injured workers who are out of work for 12 weeks never return to work in any capacity, which literally ruins lives and families. So, it’s vital that you drive fast to get the injured employee on the road to recovery within 3 months (12 weeks).
About Tom Herndon
Tom Herndon, the Chief Operating Officer of Medata, directs the company’s operations and plays an instrumental role in its growth and profitability. During his 15-year career in insurance, healthcare and technology, Herndon has held several executive positions, overseeing compliance, research, product development and product support. Medata is the originator of medical bill review software and since 1975 has been on the forefront of issues facing the workers’ compensation industry. Medata has taken an active role in monitoring and analyzing cost, consumption, and consistency trends. From the beginning, Medata’s focus has been on improving the delivery of crucial services and data necessary to control the rising costs of medical services. Herndon can be reached at [email protected]
Established in 1975, Medata, Inc. is the originator of automated medical bill review solutions in the workers’ compensation and auto liability payer industries. Building on the foundation of its CORE Bill Review engine, the company has continually pioneered a powerful suite of cost containment products to address every stage of the bill review process. Each product has been developed to complement a paperless workflow, making everyday tasks more efficient and cost effective. Medata’s mission is to preserve the quality of care delivered to patients by assuring that providers of medical services are paid a reasonable amount for services that are medically necessary. Based in Tustin, Calif., Medata can be reached at (800) 854-7591 or www.medata.com.