Presented at the National Workers’ Compensation and Disability Conference® & Expo

November 11, 2011 in Las Vegas, Nevada

By:

• William Zachry, VP Risk Management, Safeway Inc.
• Anita Weir, Director, Medical and Disability Management, Corporate Risk, Safeway Inc.
• Eunhee Kim, CEO and co-founder DataCare Corporation and CEO, EK Health

THE LOSSES ARE MOUNTING

Workers’ compensation payers have known for years that they are losing a lot of money in wasted medical payments. Studies by the states of California and Texas document medical overpayments by workers’ compensation insurers from 14% to 21.9%.

The 2007 California study, conducted by Navigant Consulting, found the highest rates of overpayment with 21.9% of payments made in error. This represents a loss to the entire California workers’ compensation system of between $494 and $1.372 billion.

In Texas, the Comptroller of Public Accounts for workers’ compensation for Texas state employees does periodic reviews. The results from the studies published in 2003 and 2005 showed an overpayment error rate of 19.9% in 2003 and 13.7% in the 2005 study.

Our speakers conducted an internal study of their own workers’ compensation program. After auditing 300 medical bills over a period of six months, they found that 25% should not have been paid. The underlying cause of most of this leakage comes from the same source. Because the bill-review system was not directly connected to the utilization-review process, many bills were paid even though the procedure had been denied or no authorization had been requested by to the treating physician.

According to respected industry commentator Joe Paduda “the link between utilization review and bill review has been a major issue in workers’ compensation for many years.”

Because different vendors or organizational units provide bill review and UR, the systems and processes often do not work together to provide effective medical and payment management. Information needed to provide a full and comprehensive view of the injured worker is scattered in different systems. Data is collected in inconsistent formats, and it is not effectively shared between different vendors for the benefit of the injured worker. The result is a longer time to return workers to work, and higher medical costs.

HOW OVERPAYMENT OCCURS

In a typical workflow, a bill reviewer looks up the bill, the UR determination, and the claims notes. Depending on how these documents are created and stored, access to these documents may be more or less difficult.

The reviewer visually compares the treatment codes and manually applies authorizations. Errors occur as the reviewer struggles to match narrative UR reports and claims notes with complex bills.

The solution is automated matching. It not only eliminates many manual errors, but also gives greater visibility into the process for a higher level of quality control. These improvements can not only lower costs, but also can improve treatment, and return injured employees to work more quickly.

PLUGGING THE LEAKS

To implement a technology solution that connects UR with bill review, payers must first adopt an advanced UR platform. Most UR systems document treatment determinations in hard-to-access narrative reports. To systematically match them with bills and to analyze medical trends, your utilization review system should capture key medical information including treatment codes in a database format.

In addition to upgrading the formal UR process, another key step is to improve the documentation of authorizations made by claims examiners. As with many UR platforms, most claims systems capture these authorizations in a narrative format in the claims notes. Modern systems provide examiners with a decision support system which enables them to quickly preauthorize those treatment requests which do not need to go to UR and which automatically document treatment codes and other key information such as type of injury and body part in a database.

Once your UR and claims systems capture treatment codes in a database, you can now automate matching of UR determinations with bill line items from the bill review system. Questionable bills can then be flagged for a higher level of scrutiny. Some of the key categories of medical over-payment include bills that were recommended for payment by bill review which:

• Had never received an authorization request or approved
• Were for treatment denied during utilization review (UR)
• Were to an unauthorized provider
• Treated non-covered body parts
• Were for treatment provided on closed claims

After over 24 months of implementation, savings levels from automated matching are ranging between 8% and 20% over and above the savings delivered by traditional bill review methods.

ANOTHER BENEFIT – ACTIONABLE MEDICAL DATA

By capturing key information for determinations made both by claims examiners and utilization reviewers together with billing data, all information about an injured worker is available in one database. This actionable medical data helps payers manage providers with reporting systems that pinpoint opportunities to improve treatment and save money.

Medical professionals can quickly pull reports that let payers analyze cases by diagnosis, treatment, drug usage, provider, geography, job type, and other key demographics. Reports can help determine if evidence-based guidelines and best practices are consistently applied, and track performance against return-to-work guidelines. In addition, it is important to make sure you that have real-time visibility into the information posted to verify vendor data integrity.

An unrelated, but important benefit is that storing data in a database, organized by claim number, lets payers quickly reconfigure workflows, and track all activities in real time. When critical information is accessible from within systems and integrated with workflows, managers can view real-time workflow to track the status of cases, reviews, or bills; and take prompt corrective action.

These steps give payers the tools they need to plug medical cost leakage.

DATACARE OFFERS TECHNOLOGY SOLUTION

DataCare offers a sophisticated suite of software applications to streamline workers’ compensation operations.

UR Enforcer augments traditional bill review services by verifying that treatment decisions made in utilization review and during pre-authorizations are enforced when bills are paid. Utilization Review software facilitates faster turnaround times and captures treatment codes in a database format that facilitates computerized identification of medical overpayments. Medical Case Management software saves 20% to 25% of case managers’ time and facilitates better medical treatment and faster return to work. Express Adjudication treatment approval software enables trained triage personnel or claims adjusters to quickly approve 80% to 90% of treatment requests while documenting treatment authorizations in a database. The Claims Assistant works with claims system to implement an electronic, paperless office.

DATACARE OFFERS TECHNOLOGY SOLUTION

DataCare offers a sophisticated suite of software applications to streamline workers’ compensation operations.

• UR Enforcer augments traditional bill review services by verifying that treatment decisions made in utilization review and during pre-authorizations are enforced when bills are paid.
• Utilization Review software facilitates faster turnaround times and captures treatment codes in a database format that facilitates computerized identification of medical overpayments.
• Medical Case Management software saves 20% to 25% of case managers’ time and facilitates better medical treatment and faster return to work.
• Express Adjudication treatment approval software enables trained triage personnel or claims adjusters to quickly approve 80% to 90% of treatment requests while documenting treatment authorizations in a database.
• The Claims Assistant works with claims system to implement an electronic, paperless office.

EK HEALTH SERVICES TOP MANAGED CARE PROVIDER

EK Health offers URAC accredited national workers’ compensation managed care services specializing in case management, utilization, peer and bill review services for insurance companies, employers, for-profits and public entities.

• Our Case Management services bring cost containment and case resolution to complex and challenging Workers’ Compensation cases.
• Utilization and peer review saves your time, money and manpower by producing a fast turnaround that consistently meets mandated timetables and guidelines.
• Medical Bill Review has saved in excess of 15% over and above usual Bill Review performance.
• Our Medical Provider Network allows employers to select qualified medical professionals representing an array of specialties required to treat injured workers.

We work together with all parties to reduce administrative complexities while promoting faster recovery for injured workers. We believe cost containment and quality of care can coexist. www.ekhealth.com