Tag Archives: critical decision support

8% Reduction In Claims Costs Spells Success for Workers' Compensation Pilot Program

Physician-Guided Managed Care Achieves Better Results

Ever wondered why managed care costs more every year but the results seem about the same? For decades, the most expensive portion of a claim was the indemnity payments. Today, with medical advances, it’s the medical expenses, which in workers’ compensation alone, have increased nationwide by an annual average of 8 percent, nearly double the medical consumer price index of 4.3 percent over the same six-year period.

Although managed care services vary somewhat from company to company, they are more or less delivered as commodities, with each service providing similar capabilities regardless of vendor. Upfront fees are the selling point, and price is the primary differentiator. Some service providers may be more efficient than others, but only because their technology underpinnings are better (or better managed). Either way, technology-based processes often define the service, with poor accommodation for human intervention.

In this typical managed care model, medical bill reviews sail through software systems as fast as possible, grabbing savings along the way based on automated business rules and built-in triggers. Experienced nurses conduct utilization reviews (URs), but generally in a rubber-stamp role, and escalation of questionable utilization reviews to physicians can slow the review process by days, or even weeks. Similarly, case management is a nurse-based service in which physicians come into play only on an exception basis. And finally, there are the networks of doctors and hospitals that discount fees. Because the managed care vendors that build these networks absorb part of the discounts as payment for network access, they have little incentive to choose these providers selectively.

In this standard managed care model, one service provider might boast the lowest price for medical bill review, another for utilization review, and both will attract buyers on price alone. But insurance entities that choose providers based on upfront fees are sacrificing a higher level of savings — one that can only come with a more holistic view of managed care services.

Current Managed Care Model
Many insurance companies use managed care services to find the obvious savings (or “low hanging fruit”) through case management, bill review, utilization review of patient treatment plans, and provider networks at discount prices.

Yet most managed care service providers seem powerless to arrest medical costs and have been unable to utilize or develop a different approach. They continue to use nurses and clerical review staff to oversee the medical component of a claim, when their valuable input often doesn't reach the treating physician in any meaningful way. And when a physician finally does become involved, the case is often already derailed by out-of-control treatment plans and costs.

Instead of charging fees to catch problems after the fact, industry innovators want a new, more effective model to lower costs and influence the quality of care from the beginning of a claim.

A New Model: Physician-Guided Managed Care Services
What is needed is a managed care infrastructure that leverages the credibility and expertise of doctors at key points in every service.

Physician-Guided Care (PGC), a ground-breaking approach to managed care, combines knowledgeable individuals with predictive analytics and systems to measure and influence medical care. It's a model where treatment is lead by doctors — not clerical review staff or nurses.

Widespread as it is “holistic” in nature, the Physician-Guided Care model informs the overall delivery of all managed care services. Put another way, Physician-Guided Care can be defined as supporting the right treatment at the right time by the right professional — and all at the right cost to workers' compensation programs. And this model has been proven to deliver better results, including:

  • 11% faster return to work for injured persons; and,
  • 8% reduction in overall claims costs.

The Right Treatment At The Right Time — By The Right Professional
To understand the value of “right” in this context, consider the prevailing practice of nurse-conducted utilization reviews (UR). Customers pay for the nurse's review, and again for a second review at a higher incremental price; each time a utilization review case is escalated to a doctor for specialized medical advice.

Alternatively, if the nurse chooses to call the treating physician to discuss the matter, there's no guarantee the call will be returned quickly, if at all, and nothing preventing the provider from proceeding with the planned treatment. Either way, relying on nurses at the initial stage of less-routine utilization review cases can increase costs, slow turnaround times, and prolong the life of the claim.

With the Physician-Guided Care model, only physicians conduct utilization reviews. The collaborative nature of physicians, trained to work together, delivers greater efficiencies and better outcomes to the process. In fact, the approach of using physicians at the appropriate level of every service has upended the commodity-based service model favored by the managed care industry. As trained clinicians, they pinpoint problems, negotiate with treating physicians, and arrive at fair resolutions more quickly and effectively. Physicians are used in the following ways:

  • Medical Bill Review: The Physician-Guided Care model combines the expertise of senior-level bill analysts with proprietary quality assurance technology that flags possible violations of medical procedure coding, PPO network discounts, and state fee schedules. Level of Physician Involvement: Questionable treatment, billing codes, and charges for medical services are escalated to physicians for clinical review.
  • Utilization Review: The Physician-Guided Care model uses staff physicians to review medical treatment plans and collaborate with treating physicians on patient care. Level of Physician Involvement: All utilization reviews are conducted by physicians.
  • Rx Utilization Management: The Physician-Guided Care model reviews prescriptions before they're filled, specifically Class II and III drugs, special requests, and prescriptions flagged by specifically configured triggers as potentially out of scope or harmful to the patient. Level of Physician Involvement: All requests are reviewed by physicians.
  • Case Management: The Physician-Guided Care model for case management combines physician and field nurse case managers who work with treating physicians and families to ensure the best possible patient care without incurring undue costs. Level of Physician Involvement: In the Physician-Guided Care model, physicians are assigned to any claim that meets at least one of dozens of critical factors and anticipates six weeks or more of lost work time, based on predictive modeling.
  • Physician on Call: The Physician-Guided Care model makes physicians available via an 800 number to help claims examiners resolve medical issues quickly, especially when they're under pressure. Level of Physician Involvement: All calls are handled by physicians.
  • 24/7 Nurse Triage: The Physician-Guided Care model uses phone-based triage-trained registered nurses to guide accident victims to the right treatment option the moment an accident occurs. Level of Physician Involvement: Nurse triage operations are overseen by a physician certified in internal and emergency medicine.
  • Claim Analysis: The Physician-Guided Care model helps claims examiners resolve persistent issues and move toward settlement of difficult or long-term claims. Level of Physician Involvement: All analyses are performed by physicians.
  • Medicare Set-Asides (MSAs): The Physician-Guided Care model helps claims staff forecast Medicare Set-Asides more accurately, expedite reporting, and comply with Medicare's Secondary Payer Act for case settlements. Level of Physician Involvement: Physicians oversee the work of analysts and forecasters.

Delivering Better Results For Claims Organizations
Over the last few years, Physician-Guided Care has confirmed its value for businesses by reducing medical costs, accelerating patient recovery, and minimizing appeals of managed care decisions.

Many workers' compensation carriers choose to first pilot the Physician-Guided Care model in order to evaluate results and confirm the benefits of the approach. One example of such a pilot was an insurance company specializing in workers' compensation claims. This organization chose to evaluate the Physician-Guided Care program in order to measure the success of using physician case managers, specifically on cases that involved severe injuries.

This pilot program ran between July 1, 2010 and May 31, 2011, during which time physicians were assigned as case managers to any claim that met the following criteria: involved an injury with certain critical factors and had at least six weeks of anticipated lost work time due to temporary total disability (TTD), based on predictive modeling.

By any measure, the results were impressive. During this pilot program, the use of physician case managers resulted in:

  • Medical expenses to drop by 8 percent.
  • Compare that to the 2 percent increase in the medical cost inflation rate for workers' compensation insurance in 2010, and the effect is a 10-point better result.

The Physician-Guided Care Model: Making an Impact
One thing is certain: the traditional model for managing medical costs and care is outdated and no longer generates sustainable improvements. The new Physician-Guided Care model has been tested with thousands of claims, and shown to deliver measurable improvements in claims outcomes and costs.

Physician-Guided Care is the groundbreaking approach successfully leveraging the credibility and expertise of doctors at critical points in every managed care service. The Physician-Guided Care model is successful due in large part to its foundation — the collegial and collaborative nature of physicians. In an environment where doctors have historically been trained to work together, the Physician-Guided Care model harnesses the peer-to-peer relationship to manage patient care from the start and throughout the entire claims process. The result: the treatment plan is set on the right course to get the injured person back to health quickly, and unnecessary medical procedures, costs, and prescriptions are avoided.

Hurricane Sandy – Do Not Underestimate Impact

Over the next few days, you’re going to read a number of comparisons between the current Hurricane Sandy and August 2011’s Hurricane Irene. Firestorm urges you to read and take these comparisons seriously, as Irene killed 56 people with US costs upwards of $15.6 billion in damages. The total damages are still being felt.

Sandy, sadly, has the potential to be “the Perfect Storm.” Some meteorologists say a rare combination of events — Hurricane Sandy combined with an outbreak of unseasonably cold air, and a strong land-based storm system — could deliver flooding rains, damaging winds of near-hurricane force, large waves, and even heavy snow inland.

This Public Discussion details meteorological observations as of 5PM Thursday evening, 10/25:

“…Later in the period … some re-intensification is shown as Sandy deepens again off the U.S. East Coast while it interacts with another shortwave trough. Regardless … Sandy is expected to be a large cyclone at or near hurricane intensity through most of the forecast period.

“… Sandy will be pulled northwestward and slow down on Friday while it interacts with the upper-level low. Then a north-northeastward acceleration is expected by Saturday as a long-wave trough move into the eastern United States. Most of the track models now show a turn back toward the northwest by the end of the period due to Sandy interacting with an amplifying shortwave trough over the Carolinas and mid Atlantic states. However … there remain some significant differences in the timing of this interaction … as the ECMWF has Sandy farther west and interacting with the shortwave sooner relative to most of the rest of the guidance … which shows a wider turn and a track farther north. The new NHC forecast is close to the previous one … and lies roughly between the ECMWF and the GFS ensemble mean. Regardless of the exact track of Sandy … it is likely that significant impacts will be felt over portions of the U.S. East Coast through the weekend and into early next week.”

Firestorm’s Jim Satterfield states:

“While Sandy’s pattern is similar to last year’s hurricane, the water temperature is lower and wind impact may be less. Even given lower winds, flooding is extremely likely and combined with down trees and the possibility of ice, loss of power is expected as the hurricane moves inland. For businesses, now is the time to reconfirm call in numbers and messaging. The European model shows that Sandy has the potential to become a massive storm. If this model is correct, outages could be in days and even weeks.”

Rainfall Potential

Hurricane Sandy Potential Rainfall

Hurricane Sandy Potential Rainfall

As reported by the Associated Press, Massachusetts Gov. Deval Patrick said he expected to receive by Friday from the state's major utility companies, emergency plans for how they will deal with the storm.

The utilities came under intense criticism last year following widespread and long-lasting power outages caused by the remnants of Hurricane Irene in August and a surprise October snowstorm.

Asked during his monthly “Ask the Governor” show on WTKK-FM if he expected utilities to be more prepared for this storm, Patrick responded: “They'd better be.”

Patrick signed a law earlier this year that requires utilities to dramatically improve communications with their customers during emergencies. Many residents and municipal officials in areas hard-hit by last year's storm complained that they were unable to get accurate information from companies about when power might be restored.

The law requires the utilities to establish call centers that would be staffed around the clock after major storms to handle inquiries from customers about power restoration. Failure of any investor-owned utility to carry out an order by the chairman (authorized under section 4B of the General Laws of the Commonwealth CHAPTER 25 DEPARTMENT OF PUBLIC UTILITIES) shall be subject to investigation and a penalty of up to $1,000,000 per violation.

In a statement from Governor Andrew M. Cuomo on the NY-Alert website, the Governor directed the New York State Division of Homeland Security and Emergency Services to closely monitor the progress of Hurricane Sandy and prepare for potential storm impacts. Although the storm track is still uncertain, Hurricane Sandy has the potential to affect many parts of New York State with a variety of threats, including heavy rain, high winds, flooding, tornadoes, coastal surges, and widespread power outages.

“I have directed state agencies and New York's emergency operations personnel to begin preparations now for the potential impact of Hurricane Sandy,” Governor Cuomo said. “I urge all New Yorkers to closely track the storm's path, using local radio and television or online reports. We will actively monitor the storm's progress and take any steps necessary to protect our state's residents.”

Connecticut Light & Power (CL&P) is hiring 2,000 contractors from the Midwest and United Illuminating is hiring hundreds of workers to help respond to Sandy if the storm hits the state. CL&P provides power to more than a million residences and businesses, and is warning its residential customers to prepare a home emergency kit and has begun reaching out to local officials to update them on how the company will respond if there are widespread power outages.

In Maryland, Baltimore County government is holding an emergency preparedness press conference at 1:30 p.m. Friday, in which county emergency personnel will update residents on response plans and Baltimore Gas and Electric Vice President for Corporate Communications Rob Gould will detail the utility company's preparedness plans.

Businesses Should Prepare Now
Firestorm Solutions, a nationally recognized leader in Continuity Planning, Critical Decision Support, Crisis Response, Crisis Management, Crisis Communications, Crisis Public Relations, and Consequence Management, urges businesses to review business continuity plans, and to communicate with employees and vendors to prepare for labor shortages, supply chain interruptions, power and technology systems back-ups, and other critical system and process interruptions:

  • Recovery prioritization structure for critical business functions
  • Response and recovery actions by functional department
  • Identification of critical suppliers
  • Identification of key employees and contacts

The crisis management team should include the CEO, senior officers, and key personnel representing operations, security, marketing, human resources and public information. The senior business continuity officer and his staff facilitate the crisis management discussion and decision making.

Depending on the severity of the crisis, a command center is set up including PC's, white boards, and phone lines. As status information flows into the command center, it is useful to record it on the white board for the crisis team to see at a glance.

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Roles and Responsibilities in a Crisis

  • Human Resources is charged with updating employee information phone recordings and web site with status and instructions.
  • The security officer should communicate with fire and law enforcement, if necessary.
  • Marketing should develop customer communications, and public information should craft carefully worded statements for the media/social media outlets.
  • It is imperative that media inquiries be referred to an experienced, designated spokesperson.
  • The secretary to the board or CEO should inform directors, when appropriate.
  • The command center is staffed around the clock, and team members are rotated until the crisis passes and full recovery is completed.

Time is of the essence in crisis management, and it deserves its own plan specifying participant responsibilities. A measure of success is that the dimensions of the crisis are known and recovery activities are begun within the first few hours. In the absence of a tested crisis management plan, the crisis management process can be a turbulent and reactive instead of a calm and productive experience.

Incident/Emergency Response Plan
Implementing an emergency response plan enables a timely response to a disruptive event, with the objective of protecting people and property, while enabling an efficient recovery effort that satisfies stakeholder expectations. Firestorm's Emergency Response Team, which can be reached at 800.321.2219, is available to assist with:

  • Establishing emergency response objectives and assumptions.
  • Developing emergency response team roles and responsibilities.
  • Identifying primary / alternate assignments.
  • Collecting emergency response team contact information and documenting call tree procedures.
  • Designing a triggering process, escalation criteria and declaration criteria; establishing and documenting authority levels.
  • Documenting actions by phases, disruption or crisis for incident response at the impacted site.
  • Documenting or attaching evacuation and shelter-in-place procedures.
  • Developing and documenting response procedures that align to the emergency response objectives and assumptions; developing processes to enable recovery procedures.
  • Establishing and documenting communications strategies to internal and external resources/ stakeholders; summarizing media handling procedures; documenting crisis communications holding statements.
  • Creating a damage assessment process and assigning personnel.

For Business Preparedness
The Firestorm Hurricane Sandy Business Crisis Management Response Team is available now at 800.321.2219.

For Individual Preparedness
Firestorm offers its eBook at no charge: Disaster Ready People for a Disaster Ready America.