I was once hired by a major insurance company to review the operation of their workers’ compensation managed care program administered by their third-party administrator (TPA). My analysis was over in less than three minutes. Their version of managed care was date stamps and rubber bands.
Medical bills from providers came to their mailroom and were date-stamped, wrapped in rubber bands and mailed to an outside vendor to reduce the medical fees to be paid. There was no management of anything. There was no intake of injuries, no direction to network providers, no contact with injured workers, no follow-up with medical providers, no contact with supervisors and no return-to-work program in place, to name a few problems.
I noted that reducing a bill to a state fee schedule is simply an administrative function of a claim administrator. The administrator kept a third of the “savings,” making millions of dollars while their clients’ workers’ compensation costs were out of control.
While conducting claim audits on behalf of large, self-insured entities in both the private and public sector, I typically found claims examiners with 200 case files to manage,with little or no nurse case management involved. On the other hand, I also found just the opposite. I was a consultant to a large city in Texas whose TPA had nurse case managers billing excessive time on every claim, resulting in costs skyrocketing.
During a site visit at a manufacturing facility, I once asked the plant manager, “Do you explain to your employees how to report a work-related accident?” He stated, “We don’t want our employees to know about workers’ comp.” I replied, “It has been around for a hundred years, and word is starting to leak out.”
True cost-effective workers’ compensation managed care must begin from the moment of injury. It is estimated that 50% of the future costs of a new injury will be determined in the first 24 hours. True cost containment can be achieved, but it must involve a well-thought-out program administered from day one by industry experts, including pre-planned intake and four-point contact (the injured worker, medical provider, supervisor, and the claims adjuster) within 24 to 48 hours of injury.
Today, 25% of a workers’ compensation claims adjuster’s day is spent on hold, trying to coordinate medical appointments. Unfortunately, many workers’ compensation managed care programs result in financially rewarding overtreatment.
Early intervention is essential to control claim costs while ensuring injured employees receive the right care at the right time. The injured worker should be contacted immediately by a nurse case manager to direct them to the appropriate medical provider based on the nature of the injury. Many employers I worked with initially directed all care to the local emergency room. Unless the injury is a true emergency, this is typically a total waste of time and money. Now, with the growth of urgent care centers, they may be a better option than the ER. However, the best option would be to direct care to the nearest appropriate medical specialists already trained and certified in a pre-planned network, with contracted fees already in place.
The employer/supervisor then needs to be contacted to review the accident, identify any witnesses, obtain a written job description and specific job duties such as lifting X amount, standing for X hours a day, etc.
Next, the nurse case manager should be following up with the designated medical provider to obtain objective medical findings and the need for any additional diagnostic testing or services such as physical therapy, etc.
The nurse case manager then needs to be in constant contact with the claims adjuster about the treatment plan and return-to-work status and any pre-authorization requirements.
It is imperative that all these pre-planned steps are in place before an accident or injury takes place and that injured workers, if they are going to require time off work, are informed regarding state waiting periods for potential benefits retroactive to the day of injury. When injured employees receive prompt, high-quality care, clear communication about their treatment and benefits, and reassurance that appropriate return-to-work accommodation is available, they are significantly less likely to seek legal representation. Attorney involvement can dramatically increase claim costs, making early intervention and effective communications critical.
It is well documented that by having a pre-planned program in place, employers can save enormous amounts of indirect costs involved with work-related injuries and accidents such as overtime, replacement workers, and lost productivity.
Real direct and indirect savings can be documented in well-run programs, but be aware of smoke and mirrors and date stamps and rubber bands.
