August 21, 2013
California SB 863, A Guide For Building And Monitoring Networks With Intelligence, Part 1
by Karen Wolfe
Most organizations do not have the appropriate resources and should outsource to companies that focus on intelligent network design, provider selection through analytics, review, and management.
This is Part 1 of a multi-part series on building and monitoring networks with intelligence. Subsequent parts in the series will be published soon.
Building a medical provider community for Workers’ Compensation can be challenging, regardless of the jurisdiction. Nevertheless, carving out a legislatively-compliant, outcome-based, quality network is doable, and the return on investment is certain.
Injured workers deserve good medical treatment while employers and payers deserve transparent and fair costs. Moreover, industry research clearly shows that poorly performing providers are costly and lead to abysmal outcomes for injured employees, their families, and employers. This article features California SB 863 regarding MPNs (medical provider networks), but the concepts apply to creating intelligent medical provider networks anywhere.
Traditional Medical Networks
Medical networks in Workers’ Comp are not new, in fact, PPOs (Preferred Provider Organizations) have been around in Workers’ Comp since the early 1990s. Traditionally, the network administrator contracts with all physicians and other treating providers available. The trade-off is that providers exchange their discounted fees for increased patient volume. However, quality of medical care measured by outcomes and acknowledgment of Workers’ Comp nuances such as return to work are not considered. Some jurisdictions have made attempts to modify this practice.
Old SB 899 — LC 4616 Medical Provider Network (MPN)
In April of 2004 the governor of California signed SB 899 into law. It addressed MPNs under section LC 4616 (d) stating “In developing a medical provider network, an employer shall have the exclusive right to determine the members of their network.”
Encouragement to analyze provider performance is clear under section LC 4616.1: “Economic Profiling means the evaluation of a particular physician, provider, medical group, or individual practice associations based in whole or in part of the economic costs or utilization of services associated with medical care provided or authorized by the physician, provider, medical group, or individual practice association.” In other words, quality and costs matter and should be analyzed and monitored.
Direction Of Care
An important opportunity in California and many other states is that employers and payers are allowed to direct care for injured employees to doctors and other medical providers in their medical provider networks. After selecting the best doctors for a network, injured workers can be directed to them, a win-win scenario.
Even in states where direction of care is not permitted, payers or employers who have intelligent networks can give injured employees information regarding who are the best-in-class doctors based on objective analysis. Doing so is a service to employees who will often make use of them in selecting a doctor.
Ramping Up — SB 863
The logic of creating an intelligent network with measureable outcomes was recently fortified with California SB 863, effective January 1, 2013. The old bill is strengthened under SB 863, LC 4616 (b) (2) and LC 4616 (b)(3) “Every MPN must establish and follow procedures continuously to review the quality of care, performance of medical personnel, utilization of services, facilities, and costs.”
In other words, all MPN plans must have procedures in place to continuously review the quality of care and costs for medical providers in the network. The mandate is now even stronger to evaluate and monitor medical provider performance. No longer is it adequate to contract with medical providers, print the list of providers in the network, and forget it.
However, many employers and payers are at a loss about how to analytically select and continuously review provider performance.
Legislative mandates and industry wisdom remove the question about whether to upgrade network quality through outcome analytics and monitoring. Yet, selecting the right doctors and other providers, then monitoring, and managing an intelligent MPN is a business in itself.
Most organizations do not have the appropriate resources and should outsource to companies that focus on intelligent network design, provider selection through analytics, review, and management. The following are some details for building and managing intelligent networks, whether they are legislated or not.
Gather The Data
The way to develop an intelligent network is to select the best in class medical providers determined by analysis of actual performance demonstrated in the data. Historic data must be combined with current and continually updated data to evaluate performance now and going forward. Reviews of updated data should be frequent and regular.
Additionally, the data must be derived from a broad spectrum of sources. Workers’ Compensation organizations typically segment data into bill review data, claims, pharmacy (PBM) and other silos such as UR and Medical Case Management. All are necessary for provider performance assessment. Do not be misled by those who say bill review data is adequate to the task.
Integrate The Data
Integrate the data with claims as the focal point for a complete picture of the claim. Execute algorithms that analyze the data and score provider performance based on multiple performance indicators. Individual medical providers, groups, and facilities should all be analyzed in this regard.
Continuous data update and electronic monitoring insures network and individual provider quality going forward as prescribed in SB 863 legislation. Maximize medical network quality and cost control using analytics, thereby complying with legislation and maximizing positive benefits.
More About Building Networks With Intelligence
Part 2 of this series will add more details of California SB 863 regarding medical provider networks and how to create networks with intelligence using analytics and common sense, an imperative for all medical networks in all states.
Karen Wolfe collaborated with Margaret Wagner to write this article. Ms. Wagner is President and CEO of Signature Networks Plus. She is considered an expert in network selection, monitoring and management, thereby creating Networks with Intelligence™ for clients.