By Joe Paduda, Principal, Health Strategy Associates
After last week’s column on electronic payments, I heard from several colleagues in the work comp claims business, all chiding me for my lack of enthusiasm about implementing e-payments for everyone. Their argument came down to “if we’re going to do this, we should go all in…because…efficiency!”
Two problems with their argument, both all too common in the work comp claims space.
First, the vast majority of medical dollars can be paid electronically. That’s not to say all medical providers want or can accept e-payments, but those that don’t are usually small practices representing a sliver of your total medical payments. Hospitals, health systems, occ health clinics, PT clinic companies, multi-specialty practices have long been accepting electronic payments – most forced to by CMS requirements. Today, several major health insurers are requiring their network providers to accept payments and related documents electronically. The infrastructure is there, ANSI standards/EDI formats are thoroughly tested and proven, security is extremely tight, banking is integrated, and issues are rare indeed.
It has taken decades, billions in investment, and untold hours of work to get here – and a huge push from the 800-pound healthcare gorilla – the Federal government. And therein lies the rub.
- No Federal or insurer mandate requiring attorneys, claimants, body shops, document scanning services, field case management companies, and the many other payees to accept electronic payments;
- No universal ANSI/EDI standards for those vendors; and
- Not enough staff, expertise, time or resources at many of these vendors to handle the processes needed to implement and manage secure, verifiable electronic payments.
That’s not to say this won’t happen – it will, eventually.
Which brings up the second problem – which isn’t limited to this issue alone – not by a long shot.
Simply put, the problem is you – the customer – should NOT be telling the solutions provider how they need to solve your problem. Rather, you should be describing the problem(s) you have, and they should tell you how they can solve those problems.
Think about it this way – when your car is making a funny noise under the hood and can’t go over 40, do you tell your mechanic to replace the high-speed over drafter input shaft and synchronize the Fullstrom conductor with the thruster valve? Of course not. You say, “hey my car’s engine is making a funny noise and it won’t go over 40,” and leave it to the expert to solve your problem.
I’d suggest payers’ problem is two-fold: administrative cost reduction and adjuster job satisfaction.
And that problem is also solvable – by outsourcing the payment function in its entirety. getting all your other payees to accept e-payments is going to be far more difficult and time-consuming than signing up medical providers…the Feds aren’t going to mandate that every claimant, attorney, body shop, transport service and investigator get with the program. But that’s not your problem, it is the e-payment solutions provider’s. It’s up to the vendor to sign up payees, get systems up and running, answer the calls and work things out with banks.
No e-payment solutions provider can deliver payments electronically to most – or even many – work comp payees. But that isn’t your problem, it is theirs. By delegating all payments to a solutions provider, you achieve administrative efficiency – along with expense reduction – while making adjusters’ lives better.
Your policyholders and clients hire you to manage their workers’ comp because you are a lot better at it than they are. Use the same thinking to fix your administrative cost reduction/adjuster happiness problems. Otherwise, you may find yourself paying for a new input shaft thruster bearing when all you need is a little tweak.
About Joe Paduda
A nationally recognized expert in medical management and pharmacy, Joe Paduda is the principal of Health Strategy Associates, a consulting firm that works with workers’ compensation insurers, employers, medical and pharmacy management companies, healthcare providers, government entities, and investors. He also conducts industry research and writes the thought-provoking www.ManagedCareMatters.com.
In addition, Paduda is president of CompPharma, LLC, a consulting firm dedicated to analyzing and improving pharmacy programs in workers’ compensation. He has conducted an annual survey of pharmacy benefit management for 16 years.
Before starting his consulting business in 1997, Paduda held executive positions with major insurers, including Traveler’s, United Healthcare and Liberty Mutual. He has a Master of Science degree in Health Management from the American University and earned his bachelor’s from Syracuse University.
Paduda is the recipient of the IAIABC’s President’s Award for his work in identifying solutions to opioid misuse in workers’ comp. He is an advisor on a research project comparing the effectiveness of two state payer strategies to prevent unsafe opioid prescribing, which is funded by the U.S. Department of Health and Human Services’ Patient Centered Outcomes Research Institute. Paduda also serves on the Board of Directors of the Commonwealth Care Alliance, a Massachusetts-based not-for-profit healthcare organization serving individuals who are dually eligible for Medicaid and Medicare.
About Health Strategy Associates
Based in Plainfield, New Hampshire, Health Strategy Associates consults with insurers, employers, medical management companies, health care providers, and investors. Its highly customized services encompass research and competitive analysis along with operational, marketing and sales improvements. For more information, please see www.healthstrategyassoc.com.