By: Betsy Robinson, Senior Vice President, Coventry Workers’ Comp Services
Unlike general medical or pharmacy spending, durable medical equipment (DME) and ancillary service expenditures have not had much focus for cost containment in workers’ compensation claims. It certainly isn’t a new expense category but rather seems to be more an expense time bomb. When we ask workers’ comp payors, “What portion of your total medical dollar is spent on DME?” responses range from gross estimates at best to “I’m really not sure” at worst.
This financial imprecision is striking in our mature cost containment environment. It is most likely because DME expense, long buried in the general category of ‘medical spend’, often pales at the unit level when compared with costs for surgery, radiology and facilities. However, according to a January 2013 report published by the National Council on Compensation Insurance (NCCI), these services comprise more than 25 percent of the total workers’ comp medical spend for the most costly legacy claims (between 20 and 30 years). Similar to the patterns in pharmacy spending, DME stands out dramatically as a cost driver as claims mature.
DME Buyers Beware
Today it is common for buyers to contract with multiple DME suppliers to build out their DME network. It is also common to permit adjusters to control which contracted supplier to use and when to use them. This broad brush approach and likely uneven use of multiple suppliers makes meaningful data analytics a challenge when trying to understand the total cost and impact of a DME network across a workers’ comp program. When designing a DME network, buyers need to confirm that the number and geographic coverage of their contracted suppliers will be sufficient to service their program in all jurisdictions and deliver cost-efficient services. Not surprisingly, they select DME suppliers based upon their upfront commitments for deep cost savings and high network penetration. However, what cannot be anticipated (or often even tracked) is the number of times network suppliers bill outside the network and charge directly for services – bypassing the contract rates that have been established. So then how can you measure true savings? How can you compare contracted pricing versus what you are actually being billed? In fact, can you even be certain your adjusters are staying in network each time they order DME or ancillary services?
Data Integration Leads to Insight
Mining bill review data to measure your total DME experience creates the opportunity to understand what you cannot know through the varying reports from disparate suppliers in your network. Only those service organizations that can combine in-network and out-of-network bill data are able to analyze trends, influence network provider behaviors and precisely report on total network penetration and savings – and be accountable to you for the upfront commitments they made. If you can identify the network DME suppliers who are misrouting their bills, decreasing penetration and savings, you can educate providers on appropriate billing practices and ensure that you achieve the expected savings. It is impossible to evaluate the effectiveness of your network if you do not have insight to all of its performance data. Integration between bill review and DME has decreased out-of-network activity as much as 40% in just 6 months in objectively documented program performance.
Proactive Clinical Integration Leads to Better Outcomes
As in all management scenarios, early intervention is essential. Early intervention that coordinates necessary DME and ancillary services to ensure immediate quality service to injured workers also makes the best use of network suppliers. Unfortunately the foresight and immediate action needed is not always reasonable given the desk load of many workers’ comp adjusters. Integration of precertification, discharge planning and case management decisions with DME outreach creates an optimal window for quality service and network penetration to occur and supports the adjuster trying to do the best job on each claim. This level of integration supports the adjuster through proactive contact to ensure requested items align with the needs of the specific claim. When inpatient admissions have been deemed medically necessary, it is often the case that DME and ancillary services needs can be identified proactively. Wouldn’t it be better to plan for the needs of the injured worker upon hospital discharge and before they arrive home? By doing so you can ensure access to network providers who will supply all needed equipment and services in the home and on time. Total integration of clinical services can coordinate with the PBM to ensure the injured worker has timely access to discharge medications from an in-network pharmacy, enabling oversight for patient safety through clinical review by the pharmacy benefit manager and network penetration.
DME Suppliers Need to Raise the Bar
Integration and analysis of all medical bill data is the only way a supplier can validate actual network penetration and total cost savings impact to a buyer. Integration of clinical decisioning is the only way a buyer can be certain that injured workers are well-served. Just because the service is ordered and can be made available within the network doesn’t always mean it is the right service for the injured worker. Clinical guidelines that are evidence-based and used for decision-support across the care continuum test the medical necessity for any care initiated by the DME provider.
Claims which could potentially benefit from case management can be easily identified by the DME clinicians based upon severity and before adverse development occurs. Adversely developed claims become the costly legacy claims that bear high expense for DME and pharmacy.
In a very practical sense, DME demand presents as a harbinger for claim severity and potential adverse development. DME networks must control for unit cost management but to be the best-in-class, they must also detonate the expense time bomb through data integration and integrated clinical management.
About Betsy Robinson
Betsy Robinson, Senior Vice President, is responsible for overseeing the Coventry Workers’ Comp Services product development, marketing and information strategy efforts. She is accountable for setting strategic direction, driving business growth through an integrated clinical solution to the workers’ compensation market, including employers, third party administrators and insurance carriers.
Ms. Robinson began her employment with Intracorp in 1982 and held various positions at the company through 1992, including Case Manager, Account Manager and Product Manager. She subsequently held various senior level positions within the industry at Genex Services and Medecision prior to returning to Intracorp in 2000 where she served as the Vice President for Product, Marketing and Information Management until she came to Coventry in January, 2011.
Ms. Robinson received her undergraduate degree in Teaching from Temple University in Philadelphia, Pennsylvania and her Masters degree in Counseling from Villanova University.
About Coventry WCS
Coventry Workers’ Comp Services, a division of Aetna, is the leading provider of cost and care management solutions for property and casualty insurance carriers, (workers’ compensation and auto insurers), third-party administrators and self-insured employers. We design best-in-class products and services to help our partners restore the health and productivity of injured workers and insureds as quickly and as cost effectively as possible. We accomplish this by developing and maintaining consultative, trusting partnerships with our clients and stakeholders, built on a foundation of innovative and customized solutions that support the claims management process.
Coventry WCS is a WorkCompWire Advertising Partner.
This is not a paid placement.