By David Huth, Chief Operating Officer, Rising Medical Solutions
“Change” conflicts with the image that our field of workers’ compensation moves incrementally, at best. But if you look at what the better performing claims teams are doing, with changes over the past five years, you see a more dynamic reality. This is good news.
Over the course of two articles, I’ll describe how claims practices have changed to impact six key drivers of claims costs. This includes showing how claims staff development and technology influence these drivers with greater force today, as well as highlighting several, illustrative Action Items drawn from top performing claims organizations.
Using findings from Rising Medical Solutions’ annual Workers’ Compensation Benchmarking Study, as well as observations from our payer clients, gives us access to thousands of data points and a broad tapestry of claims experience.
This first article focuses on three cost drivers: psychosocial issues, litigation, and opioid prescribing. When claims staffs influence them effectively, total claims costs can decline by a quarter or more and outcomes are better.
1. Reducing psychosocial barriers to recovery
The single greatest roadblock to timely work injury recovery and controlling claim costs is the negative impact of an employee’s personal expectations, behaviors, and predicaments that can come with the injured worker or can grow out of work injury.
This suite of roadblocks is classified as “psychosocial” issues – issues which claims leaders rank as the number one barrier to successful claim outcomes according to the Workers’ Compensation Benchmarking Study – and they drive up claim costs far more than catastrophic injuries, mostly due to delayed recovery.
Employee conditions, behaviors, and predicaments include hard feelings about coworkers, troubled home life, financial fears, the lack of temporary modified work assignments, limited English proficiency, and – most commonly noted – poor coping skills.
Claims management is now better equipped to help employees focus on recovery and the “best outcome,” which Study participants define as an “employee’s return to the same or better pre-injury functional capabilities.” This definition reflects a shift away from more task-based, reactive claims handling and towards a more proactive, service-oriented approach.
When peeling back the psychosocial onion, one can see how adversarial, compliance, and task-driven claim styles are 1) ill-suited for addressing fears, beliefs, perceptions, and poor coping skills and 2) less likely to effectively address these roadblocks due to the disruption they pose
to workflows and task timelines.
Action Item: Adopt an advocacy-based claims model. In the past five years, a new, employee-centric model of claims adjuster relations with the employee has emerged – one that prepares adjusters to act as informed “coaches” and to anticipate the employee’s confusion and frustrations. This model is used by top performing claims organizations at four times the rate of lower performers, as measured by claims closure ratios in the Workers’ Compensation Benchmarking Study.
2. Reducing litigation rates
The adjuster and her case manager partner today are more equipped to identify and respond to patterns leading to litigation.
Attorneys are involved in about 30% of lost time claims, with rates varying among states. There’s been a consensus for some time that many employees retain an attorney due to complexity of workers’ compensation benefits and medical care.
Again, a “claims advocacy” approach comes into play here. To be sure, many adjusters have individually embraced this model for decades. What is new about the approach, now explicitly embraced by a growing number of claims organizations, is introducing the model to claims staff through training and development.
Action Item: Invest in communications skills and critical thinking. The adjuster must listen, describe, assign, explain, and negotiate. Currently, 42% and 32% of claims organizations conduct communication skills and critical thinking training for adjuster staff respectively. Top performers are four times more likely to do so for both aptitudes.
Along with the emergence of this model, claims information systems are now more capable of measuring litigation rates. And they are far more able to pinpoint gaps and divergences in normally expected patterns. They are more able today not only to predict but to prescribe a solution.
One solution to high litigation risk, for instance, is paying more attention to the employee’s medical care experience, perhaps with the involvement of a very focused case manager or injury coordinator. Strategically applying medical resources through the use of both predictive and prescriptive analytics is something higher performers use eight and three times more. We’ve seen such targeted and early interventions, even for cases that are seemingly benign and medical treatment that is straightforward, decrease overall managed care costs by 20% or more (e.g. less bills per claim, less utilization review, less field case management).
Action Item: Use alerts from your bill review and pharmacy systems to prescribe targeted interventions. This shift from prediction to prescription has been waiting to happen for over a decade. Far better visual presentation of claims information, far more subtle discovery of adverse events throughout the claim lifecycle, have arisen from software advances.
3. Reducing opioid prescribing
Since the early 2010s, we as an industry have built an impressive capacity to predict opioid-related problems and intervene at the decisive moments.
The use of prescribed opioids in treating injured employees rose alarmingly from the mid-1990s until, about five years ago, when the use of opioids began to decline. Societal and regulatory forces were in part accountable for this most welcomed correction. But claims staffs and their managed care partners can take some credit.
Let’s first look at advances in claims systems and managed care systems today. Look at the various dashboards which pull in every prescription used by an employee, including physician dispensed drugs. The data can be automatically matched with an outside database which analyzes the dosage and combinations of drugs for appropriateness.
Many claims teams used to completely outsource drug analysis to a pharmacy benefit manager (PBM). In the past few years, claims teams have been breaking down the silos of drug spend, medical spend, and other claims data. Today, PBMs, bill review firms, and claims teams jointly perform the analysis, lessening blind spots and improving clinical interventions for opioid prescribing.
Action Item: Measure provider performance by average narcotic use. Only 27% of claims organizations utilize this measurement, yet top performers send a strong message that gauging provider performance directly influences outcomes. Specific examples include measuring providers by average narcotic use, average medical spend, and average number of temporary total disability (TTD) days, which higher performers do six, five, and three times more than lower performers.
We see how recent changes in claims management are taking hold, especially among higher performing claims teams. I believe that every claims team today is capable of adopting at least some of these changes. In my follow-up article, I will identify three other drivers of claims costs, show how changes in claims management are impacting them, and describe what they mean for you.
About David Huth
A 30-year industry veteran, David serves as Chief Operating Officer at Rising Medical Solutions where he leads full lifecycle product development through customer delivery for the company’s medical cost containment and medical care management offerings. Specializing in strategic planning, operational improvement, and financial and data analysis, David has held executive positions with workers’ compensation, auto, and group health entities nationwide.
Prior to joining Rising, David served as Vice President of Strategy for Optum’s managed care and settlement solutions division. Before Optum, he was a partner at consultancy Maddy Bowling & Associates, where he advised national carriers, third party administrators, Fortune 100 employers, state/federal regulators, and managed care organizations for over 15 years. David holds a Master of Business Administration from Northeastern University and a Bachelor of Arts in History from Dartmouth College.
About Rising Medical Solutions
Rising Medical Solutions is a national managed care firm that provides medical cost containment and medical care management services to the workers’ compensation, auto, liability and group health markets. Rising also directs and publishes the annual Workers’ Compensation Benchmarking Study, a national research program examining the complex forces impacting claims management in workers’ compensation today.