Tag Archives: indemnity cost

Do You Know Who Your Best Doctors Are?

In workers’ compensation, the medical provider network philosophy has been in place for years. Most networks were developed using the logic that all doctors are essentially the same. Rather than evaluate performance, the focus was on obtaining discounts on bills, thereby saving money.

Physician selection by adjusters and others has frequently been based on subjective criteria. Those include familiarity, repetition, proximity and sometimes just assumption or habit. Often the criteria is something as flimsy as, “We always use this doctor,” or “The staff returns my calls.” The question is, which doctors really are best, and why?

The first assumption that must be debunked is that discounts save money. Doctors are smart—no argument there. So to make up the lost revenue for discounted bills, they increase the number of visits or services to the injured worker or extend the duration of claims by prolonging treatment. To uncover these behaviors, examine the data.

Amazingly, even doctors do not always make the best choices about other doctors. They may recommend doctors they know socially, professionally or by informal reputation, but they may not know how the doctors actually practice. They may not know a physician upcodes bills, dispenses medications or over-prescribes Schedule II drugs. The data will reveal that information.

Doctors may be unaware they are adding to claim complexity by referring to certain specialists. Again, familiarity and habit are often the drivers. On the other hand, duplicity among providers is fraudulent behavior, and it can be uncovered by examining the data.

Analysis of data can expose clustering of poorly performing, abusive or fraudulent providers referring to one another. The analysis may also divulge patterns of some providers associated with certain plaintiff attorneys.

Treating doctors influence claims and their outcomes in other ways. Management indicators unique to workers’ compensation such as return to work, indemnity costs and disability ratings can be analyzed in the data to spotlight both good and poor medical performance. These outcome indicators are either directed by or influenced by the physician, and they can be uncovered through data analysis.

Claims adjusters and other non-medical persons simply cannot evaluate the clinical capability of medical providers, especially doctors. Performance analysis must take place at a higher level. Evaluations for specific ICD-9 diagnoses and clinical procedures such as surgery must be made. Frequency, timing and outcome can be examined in the data in context with diagnoses and procedural codes, thereby disclosing the excellence or incompetency of physicians.

Negative clinical outcomes that can be analyzed include hospital readmissions, repeated surgery or infection. Physicians associated with negative medical outcomes should be avoided.

When analyzing clinical indicators for performance, care should be taken to compare only similar conditions and procedures. Without such discrimination, the results are dubious. Specificity is critical.

When using data analysis to find the best doctors and other medical providers, fairness is also important. Provider performance should be compared only with similar specialty providers for similar diagnoses and procedures. Results will not be accurate or reliable if performance analysis is not apples-to-apples.

Medical providers may question data analysis to evaluate performance, claiming they treat the more difficult cases. The data can be analyzed to determine diagnostic severity, as well. Diagnostic codes in claims can be measured and scored, thereby disclosing medical severity.

Now is the time to step up to a much more dignified and sophisticated approach to selecting medical providers. Decisions about treating physicians must be based on fact, not assumption or habit. Fortunately, the data can be analyzed to locate the best-in-class and expose the others.

How to Optimize Nurse Case Management in Workers' Comp

Traditionally, in workers’ comp, nurse case management (NCM) services have been widely espoused yet misunderstood and underutilized. The reasons for underutilization are many. Tension between NCM and claims adjusters is one. Even though overburdened, adjusters often overlook the opportunity to refer to NCM.

Also to blame is the NCM process itself. In spite of professional certification for NCM, the process is poorly defined for those outside the nursing profession. More importantly, NCM has difficulty measuring and reporting proof of value.

Underlying issues

Continuing to do business as usual is not acceptable. NCM needs to address several issues to qualify as legitimate contributors. First, NCM needs to articulate its value. To do that, NCM must computerize and standardize its process and measure and report outcomes, just like any other business in today’s world.

Too often, computerization for NCM is relegated to adding nurses’ notes to the claim system. However, such notes cannot be analyzed to measure outcomes based on specific nursing initiatives. 

In most situations, an individual NCM interprets an issue, decides on an action and delivers the response. The organization’s medical management is thereby a subjective interpretation rather than a definable, quantifiable product. 

Granted, the NCM is a trained professional. But when the product is unstructured, variables in delivery cannot be measured or appreciated. A process that is different every time can never be adequately defined.

It's crucial to establish organizational standards about what conditions in claims require referral to NCM—without exception. This will remove the myriad decisions made or not made by claims adjusters to involve the NCM. The referral can be automated through electronic claims monitoring and notification. NCM takes action on the issue according to organizational protocol, and the claims adjustor is notified.

Measure

When the conditions in claims that lead to intervention by NCM are computerized and standardized, the effects can be measured. Apples can legitimately be compared with apples, not to oranges and tennis balls. Similar conditions in claims are noted and approached the same way every time, so the results can be validly measured.

Results in claims such as indemnity costs, time from DOI to claim closure or overall claim cost can be compared before and after NCM standardization. Comparisons can be made across different date ranges for similar injuries going forward to measure continued effectiveness and hone the process.

Measuring outcomes is the most essential aspect of the process. Value is disregarded unless it is defined, measured and reported.

For non-NCMs, the dots in medical management must be connected to see the picture. Describe what was done, why it was done and how it was done the same way for similar situations and in context with the organization's standards. Then report the outcome value. Establish a continuing value communication process.

NCM constituencies should be informed in advance of the process and outcome measurements. Define in advance how problems and issues are identified and handled and how results will be measured. Then proceed consistently.

Recognized NCM value

Even as things now stand, NCM's value is being recognized. American Airlines recently reported it is adding NCM to their staff and will refer all lost time claims. The company cited a pilot project where nurse interventions were documented and measured, proving their value in getting injured workers back to work. 

Christopher Flatt, workers’ compensation Center of Excellence leader for Marsh Inc., wrote in WorkCompWire (http://www.workcompwire.com/), “One option that employers should consider as part of an integrated approach to controlling workers’ compensation costs is formalized nurse case management. Taking actions to drive down medical expenses is an essential component to controlling workers’ compensation costs.”1

Industry research and corporate or professional wisdom regarding risky situations can supply the standardized indicators for referral to NCM. American Airlines uses the standard that all lost time claims should be referred to NCM. But there are many, sometimes more subtle, indicators of risk and cost in claims that can be identified early through computerized monitoring and referred for NCM intervention.

Another example of developing standard indicators for referral is based on industry research that shows certain comorbidities, such as diabetes, can increase claim duration and cost. These claims should also be referred to NCM. Yet another example is steering away from inappropriate medical providers who can profoundly increase costs. 

As a long-ago nurse and a longer-time medical systems designer and developer, I believe the solution lies in appropriate computerized system design. The elements need to be simple to implement, easy to use and consistently applied. Only then can NCM offer proof of value.

1 Christopher Flatt: The Case for Formalized Nurse Case Management