Tag Archives: medical provider

settlement

A Better Reality for Injured Workers

When is the last time you haggled with your doctor over pricing?

It’s certainly not a negotiation most Americans are prepared for or even one they know how to approach. However, when it comes to workers’ compensation settlements, the system anticipates that, after settlement, injured workers can persuade their doctors to bill them fairly, according to the state’s fee schedule. In reality, the system is naïve, and injured workers are instead being unfairly stripped of their settlement funds because they are routinely overpaying for treatment.

Injured workers deserve better, and engaging a professional administration service like CareGuard provides them just that. CareGuard offers injured workers a sophisticated advocate and group-buying power to make sure they can navigate the healthcare system and get the lifetime of treatment they were promised in their settlement, with money to spare.

Each year, tens of thousands of injured workers decide to settle their cases. The vast majority (more than 95%) of these workers have no help when it comes to properly spending their funds on healthcare. After settlement, most injured workers pay out-of-pocket for treatments related to their injury, relying on their often limited knowledge of healthcare to figure out what treatments they should pay for with their funds. When they do decide to use their funds to pay, they must navigate a complex maze of fee schedule guidelines that have been provided by the state to find the correct prices. In reality, it’s nearly impossible to comply with the guidelines without a computer application deciphering the numerous pages of schedules, CPT codes, rates, modifiers and rules.

The result is that, in most instances, when injured workers are left on their own after settlement, they fail to manage their care appropriately. They overpay for treatments and drugs, depleting their funds more rapidly than expected. They lose track of bills and fail to comply with regulations, putting their Medicare and other benefits at risk. And even when they are aware they can negotiate, injured workers are left to haggle out pricing on their own, pitted against a complex and apathetic medical system. Keep in mind that most of these individuals have far more healthcare needs than the average person.

Professional administration services provide access to discounted drug, provider and medical equipment pricing, as well as access to technology that provides a hassle-free experience with medical care. Those services also provide support from a dedicated team of representatives and advocates to answer questions and help the injured worker navigate their medical care. With professional administration, there is no utilization review or any requirement to use a medical provider network (MPN). Instead, injured workers can see any provider they would like, giving them the freedom to get the care they need with the added support to help minimize administrative red tape.

The culmination of all these benefits is that professional administration helps alleviate injured workers’ concerns about settling their cases. It is a tool that can help everyone at the settlement table prepare the claimant for post-settlement success and minimize any backlash or misunderstandings after settlement.

Professional administration is often overlooked because of a common misconception that it is very expensive, costing tens of thousands of dollars. At CareGuard, our pricing is typically below $5,000, and it can be even less for smaller cases. As a result of the low pricing and high discounts we offer our members, we also find that, on average, we save the injured worker over five times the cost of our services each year.

The workers’ compensation system was built to protect injured workers. Significant work and resources are dedicated to ensuring the system runs well. However, the system was poorly designed to care for injured workers who have settled their case and have exited the system. Professional administrators pick up where the system left off and ensure the injured worker has a smooth transition to life post-settlement.

Important Alliance to Fight Health Costs

The Wall Street Journal reported that 20 large U.S. companies joined to fight high healthcare costs, launching the aptly named Health Transformation Alliance. Employers account for one in five dollars spent on healthcare in the U.S., yet they have relatively weak influence in the marketplace. But these influential companies are intent on aggressive action. With this kind of unified leadership, the alliance promises to shake the foundations of our health care economy.

There have been other efforts to harness the power of the business community to improve health care. My organization, the Leapfrog Group, is one such effort, founded by Business Roundtable in 2000 to address quality and patient safety in hospitals. Based on what we’ve learned over the past 16 years, here are three key principles for the alliance to start with:

  1. Lowering costs won’t automatically lower prices.

Whenever the subject of cost reduction comes up, some providers tout the enormous cost savings they have put in place through improved efficiencies, better technology or less invasive procedures. Recently, they have also pointed to the potential of large hospital system mergers to reduce costs through economies of scale. But employers are right to wonder why their own healthcare price tag continues to rise, despite these marvelous advances. Why don’t they see the cost savings?

Simply put, cost savings to the provider are not the same as cost savings to the purchaser. This sounds like such an obvious point. But the obfuscation over whose costs are saved persists and trips up progress year after year, with purchasers left scratching their heads. The alliance members will succeed in cutting their own prices only if they clearly demand that cost-reduction strategies have visible and substantial effects on their own bottom lines.

  1. Lowering prices won’t automatically lower costs.

Even if purchasers do succeed in lowering prices, the cost-reduction job is not done. That’s because the amount of waste in healthcare is profound. The Institute of Medicine estimates that as much as one-third of all costs are associated with unnecessary services, errors, infections and management inefficiencies. Not all providers are the same, and some incur much more waste than others. Whatever the price of a particular procedure, it’s no bargain when there are infections, complications and mismanagement—or if the procedure wasn’t medically necessary in the first place.

This is not chump change, this is game change. A 2013 study in the Journal of the American Medical Associaton (JAMA) reported that, on average, purchasers paid $39,000 extra when a patient contracted a surgical site infection. That excess doesn’t show up on the claim as a line item called “waste.” It is buried in a series of excess fees, tests, treatments and time spent in the hospital. Employers intent on cutting costs must factor wastefulness into the pricing equation.

  1.  Focus on the market incentives.

Our system of costs and pricing creates perverse incentives. The more a provider wastes, the more it can bill the employers. New financing models are slowly emerging, aimed at achieving value—the novel idea that payments align with patient outcomes. One of the most promising models is called “bundled pricing,” in which a health system is paid one total price for a particular procedure, including physician fees, radiology, hospital charges, etc. In this model, a provider is given incentives to actually reduce waste, so it maximizes profit under the bundle.

Some large employers have developed bundled pricing arrangements with a select group of health systems, for a select group of procedures. Walmart is a leader in this, as are employer members of the Pacific Business Group on Health. What have they found? A significant reduction in waste and better care for employees.

Another promising use of bundled pricing is coming from international medical tourism. Health services and pharmaceuticals are often much less expensive overseas than in the U.S. Most international providers offer bundled pricing and concierge hosting services. For example, Health City Cayman Islands offers bundled prices for certain heart and orthopedic surgeries, including all facility and physician fees, along with pre- and post-operative care at a lovely beachfront hotel. Its prices are one-fourth to one-fifth those for comparable services in the U.S.

The problem with medical tourism: determining the quality of international providers. Employer groups, like the Health Transformation Alliance, must address this in their work. Once again, waste and quality need to be factored into the cost equation.

Why Healthcare Costs Soar (Part 2)

This is the second of a two-part series, by David Toomey and me, on why healthcare cost growth has historically been much higher that general inflation. 

In the last blog post, we outlined the complexity of the network negotiation process and the challenging dynamics among the insurance companies, the providers and the employers. The majority of employers have not seen financial data or interacted with providers enough to understand the quality and cost variation within a network. The big question looming is what to do around contract negotiations tied to network access, patient disruption and costs.

David invited a half-dozen large, self-insured employers in a market to delve deeper into the clinical care and cost variation analysis. The intent was to share performance data with the employers, so they could understand the positive financial impact that could come from channeling members to higher-value providers.

Reports showed that, within physician groups, there was wide variation in physician performance. But this took time for the employers to grasp because their businesses were focused on a consistent consumer experience—each cup of coffee made the same way with the same ingredients.

After a basic grounding in the data, the next step was to have the employers meet with the largest systems and physician groups, so the companies could get a sense of these suppliers’ value propositions beyond just claims-based performance reports. The employers felt they were ready for the first meetings with a major health system that we will call “the provider,” which outlined its capabilities and introduced its mission statement as well as its commitment to patients.

After the overview, the first employer question was, “Who is your customer?” The provider’s response: “The patient, of course.” Second employer question: “Who pays the bill?” The pr

uncompensated

Time to Focus on Injured Workers

When WorkCompCentral released a report, The Uncompensated Worker, I wrote about how a work injury affects family finances. I applied several realistic work injury scenarios to each state. In 31 states, workers receive a reduction in take-home pay of 15% or more when they’re injured on the job. In half the states, households with two median wage earners—one on work disability and the other working full time—cannot afford to sustain their basic budget.

These findings confirmed what workers’ comp claims adjusters, attorneys and case managers already know: Many injured workers live on the edge of financial collapse.

But the findings are by no means conclusive.  The research done for “The Uncompensated Worker” was too limited. I know, because I did it. To really understand the financial experience of being on workers’ comp benefits, one should run not a handful but thousands of scenarios through a statistical analyzer and then compare the data results with actual cases researched through interviews.

The research agendas of the workers’ comp industry rarely involve looking at the worker her or himself.

Instead, the industry has funded research mainly to understand the drivers of claims costs, specifically medical care. This focus can be explained. Over the past 25 or so years, the workers’ comp industry has absorbed a huge rise in medical costs, more and more layers of regulation relating to medical treatment and even more specialties needed to deliver or oversee medical care.

To illustrate the extent of this industrial-medical complex: Nationwide spending on “loss adjustment expense,” a proxy for specialist oversight of claims, has grown annually on average by 9.4%  since 1990, while total claims costs have risen on average by 2.5%.

The quality of industry-funded research has improved, because of better data and strong talent pools in places like the Workers’ Compensation Research Institute (WCRI), the California Workers’ Compensation Institute and the National Council for Compensation Insurance. Their research focuses on cost containment and service delivery. These two themes often intertwine in studies about medications, surgeries or medical provider selection.

It’s time to pay more attention to the worker. Close to a million workers a year lost at least one day from work because of injury.  We hardly know them. Bob Wilson of Workerscompensation.com predicts that, in 2016, “The injured worker will be removed from the system entirely. … Culminating a move started some 20 years ago, this final step will bring true efficiency and cost savings to the workers’ comp industry.” Industry research, one might say, has left the worker out the system.

An example of how the worker is removed can be seen in how the WCRI did an analysis of weekly benefit indemnity caps. These caps set a maximum benefit typically related to the state’s average weekly wage. (The methodology has probably not been critiqued by states for generations, despite better wage data and analytical methods.) The WCRI modeled different caps to estimate the number of workers affected. But it did not report on what this meant to workers and their families; for example, by how much their take-home benefits would change.

As it happens, Indiana is one of the worst states for being injured at work; it has close to the stingiest benefits for a brief disability. You are not paid for the first seven calendar days of disability. Benefits for that waiting period are restored only if you remain on disability for 22 calendar days. Take-home pay for someone who is out for two weeks or less will likely be 83% less than what it would have been without injury. An Indianapolis couple, both at the state’s median wage, cannot afford a basic month’s budget for a family of three when one is on extended work disability. These poor results are partly because of Indiana’s benefit cap, which is one of the lowest in the country. The weekly benefit cap used in the report, a 2014 figure, was $650.

Les Boden, a professor at Boston University’s School of Public Health, read a draft of “The Uncompensated Worker.” For years, he has studied the income of injured workers and the adequacy of workers’ compensation benefits. He told me, “Studies have shown that many people with work-related injuries and illnesses don’t receive any workers’ comp benefits. I don’t think that the problem is too little research. It’s political. Unfortunately, workers are invisible in the political process, and businesses threatening to leave the state are not.”

I am not sure how the politics of this issue can change until the strongest research centers in the industry begin to pay attention to the worker.

This article first appeared at workcompcentral.com.

How to Find Best Work Comp Doctors?

As is the case in any professional group, individual medical provider’s performance runs the gamut of good, bad and iffy. The trick is to find good medical providers for treating injured workers, avoid the bad ones and scrutinize those who are questionable. To qualify as best for injured workers, medical providers need proficiency in case-handling as well as medical treatment.

High-value physician services

The first step is to clarify the characteristics of the best providers, especially in context with workers’ compensation. One resource is an article published by the American College of Occupational and Environmental Medicine in association with the IAIABC (International Association of Industrial Accident Boards & Commissions) titled, “A Guide to High-Value Physician Services in Workers’ Compensation How to find the best available care for your injured workers” It’s a place to begin.

The article notes, “Studies show that there is significant variability in quality of care, clinical outcomes and costs among physicians.” That may be obvious, but it also verifies the rationale for taking steps to identify and select treating doctors rather than pulling from a long list of providers to gain the discount. The question is, what process should be used to select providers?

Approach

Although considerable effort from scores of industry experts contributed to this article, the approach they recommend is complex, time-consuming and subjective. In other words, it is impractical. Few readers will have the expertise and resources to follow the guide. Moreover, one assertion made in the article is simply wrong.

Misstatement

The article states that it would be nice to have the data, but that the data is not available. “Participants in the workers’ compensation system who want to direct workers to high-quality medical care rarely have sufficient data to quantify and compare the level of performance of physicians in a given geographic area.”

Actually, the data is available from most payers whether they are insurers, self-insured, self-administered employers or third-party administrators (TPAs). However, collecting the data is the challenge.

Data silos

The primary reason data is difficult to collect is that it lives in discrete database silos. The industry has not seen fit to place value on integrating the data, but that is required for a broad view of claims from beginning and throughout their course.

At a minimum, claim data should be collected from medical billing or bill review, the claims system and pharmacy (PBM). The data must be collected from all the sources, then integrated at the claim level to get a broad view of each claim. It takes effort, but it is doable. Yet, there remains another data challenge.

Data quality

Payers have traditionally collected billing data from providers, through their bill review vendor. The payer’s task has been paying the bill and sending a 1099 statement to providers at the end of the year. All that is needed is a provider name, address and tax ID so the payment reaches its destination. It makes no difference to payers that providers are entered into their systems in multiple ways causing inaccurate and duplicate provider records. One payment is a payment. The provider might receive multiple 1099s, but that causes little concern.

What is of concern is that when the same provider is entered into the payers’ computer system in multiple ways, it can be difficult to ascertain how many payments were made to an individual provider. Moreover, when the address collected by the payer is a P.O. box rather than the rendering physician’s location, matters become more complicated. This needs to change.

The new request

Now payers are being asked to accurately and comprehensively document individual providers, groups and facilities so the data can be analyzed to measure medical provider performance. They need to collect the physical location where the service was provided and it should be accurately entered into the system in the same way every time. (Note: This is easily done using a drop-down list function rather than manual data entry.)

Most importantly, a unique identifier is needed for individual providers, such as their NPI (national provider identification). Many payers are now stepping up to improve their data so accurate provider performance assessments can be made.

High-value, quality medical providers can be identified by using the data. However, quality data produces better results. Selecting the best medical providers is not a do-it-yourself project. Others will do it for you.