How to rate medical providers in Workers Compensation—Part II

Part I of this series made the point that while rating providers in group health is a long-practiced endeavor, its elements and parameters have not migrated to Workers’ Compensation. Efforts to translate group health provider quality to Workers’ Compensation have fallen well short of the mark because they omit several factors crucial to Workers Comp. Quality medical performance indicators in Workers’ Comp encompass medical treatment, outcome and cost factors similar to those in general health, but they also include non-medical functions. In Workers’ Comp, those non-medical elements can be primary drivers of cost and outcome.

A major quality goal in Workers’ Comp is return to full work and achievement of that goal rests most significantly with the treating physician. Another major quality goal in Workers’ Comp is return to maximum or full work capacity at the least cost, also largely attributable to the treating doctors. This article, Part II of this series, explores the many non-medical functions of quality in medical treatment for Workers’ Compensation, factors that must be considered in rating doctors.

For instance, multiple and repeated studies have shown that early return to work is a major indicator of better outcomes in Workers’ Comp. (Google search: “Return to Work studies in Workers Compensation”) The generally accepted notion based on these studies is that the sooner employees return to work after a work-related injury, the sooner they are re-acclimated to the job and the lower the overall cost of the claim. Alternatively, the longer the employee is kept off work, the higher the cost of the claim, with reduced chance of ever returning to work. Studies show a 1:1 correlation between length of time off work and returning to work—ever. Treating providers are not the only factor, but they are certainly the major driver in returning the person to work. Therefore, early return to work and reduced overall work loss are key performance indicators for evaluating medical providers. What is a provider’s performance in terms of return to work and how does it compare to others?

Also important to rating provider performance in Workers’ Compensation is the issue of cost. Quantifiable generators of excessive costs are the frequency and duration of medical treatment. Because PPO, MCO and MPN networks discount each unit of service delivered, the tendency of some providers may be to exploit both frequency and duration of treatment services to boost discounted fees. The elements of frequency and duration of medical treatment for specific injury types should be measured and compared with the performance of peers treating similar injuries.

Also, billed costs are comparative quality indicator. Billed costs can be strengthened by combining that number with paid costs or percentage reduction of charges recommended by bill review. One can also evaluate a provider’s performance in terms of claim reopening after closure. Certainly ratings should include outcome data—how did things turn out? Is the employee back at work, permanently disabled or somewhere in between? If a provider is associated with a high rate of settled or litigated claims, that should be considered in the mix.

Providers can be rated specifically for Workers’ Comp by creating an algorithm or a set of algorithms evaluating these factors and executed using data. The algorithms should compare similar specialty providers who have treated like injuries in the same jurisdiction during the same time frame. Moreover, the algorithms should “handicap” individual providers to insure fairness. Consistency is achieved by the computerized algorithms applying the same standards to all medical providers.

Rating doctors and other treating providers can be tricky because multiple variables intrude. How severe is the injury? What are the complicating factors such as obesity or diabetes? How old are the claimants and what kind of work do they do? A fractured ankle for a healthy, middle age male construction worker implies higher risk than a similar injury for a same age male computer worker. The more factors considered, the more accurate the result. Other issues must be considered, as well.

The data used to evaluate provider performance must be derived from a broad spectrum. Raw billing data or bill review data should be integrated with select claim data in order to reach a valid conclusion. Stated again, billing and treatment data must be integrated with loss time and outcome information, usually found in a different system, in order to reach a legitimate result regarding provider performance. Evaluating treatment patterns is instructive and sometimes predictive, but in Workers’ Comp multiple other elements come into play.

Ratings must be transparent, fair, and objective. Fairness and accuracy in developing and measuring provider performance is critical and the indicators are found in the data. Frankly, the Workers’ Compensation industry has been slow to recognize the importance of integrating data from its disparate sources and leveraging it to identify medical best practices and the doctors who use them. The data must be integrated and evaluated using computerized algorithms that measure and monitor provider performance based on a combination of Workers’ Compensation-specific values.

A post was recently submitted by Joe Paduda, “Like it or not, physician ratings are coming”. The title suggests rating doctors is a bad thing. It is not, unless you are a poorly performing provider. Using legitimate Workers’ Comp-specific rating schemes to provide objective evidence for selection and for weeding out the less effective or even fraudulent providers is positive progress. Informed decisions about medical providers based on data will replace personal preferences with unknown outcomes. It will also provide the basis for informed improvement by individual doctors. Moreover, medical provider ratings that are transparent, fair, and objective are available now.

View additional articles by Karen Wolfe under Blogs at www.medmetrics.org

A Conspiracy of Silence--WC Provider Networks

A particularly bizarre process has been carried out in the Workers Compensation industry for a very long time. It's something everyone knows about, but few talk about, and still fewer make any attempt to change. It is a conspiracy of silence that continues to drive up medical costs.

Managed care networks (PPO's, HCO's MPN's) contract with physicians and other medical providers to discount their services in exchange for directing injured workers to them. Some states have gotten into the act by legislatively requiring provider networks to be similarly structured. The appeal to those who subscribe to networks is that discounts are applied to individual units of medical services delivered. When the discounts are tallied they are sent to network clients in the form of clean, easily understood reports of dollar savings. The number of services charged is very simply multiplied by the contracted discount. Obviously, more units of service charged result in more discounts and more reported dollars saved. But not really.

You don't need to be too clever to figure out that more discounts reported means more medical services were delivered, but not necessarily more savings. Increasing medical services inflates the number of reported discounts, not overall savings.

Moreover, medical providers are a part of the conspiracy, being quick to realize the way to overcome the revenue hit of discounts is to deliver and charge for more services. Most providers don't think of themselves as exploiting their charges and the system. Many just know that for Workers Comp patients under the network discounting arrangement, they maximize treatment.

Payers go along with the deception because reports of discounts make people feel good. Who doesn't want to receive the good news of cost savings? They can pass along the feel-good reports to their clients and accounts. Everyone wins--except the employer who eventually has to foot the bill. Employers are aware of these shenanigans; it's hardly breaking news. But in the conspiracy of silence, no one is willing to topple the apple cart by leading the charge of change.

Nevertheless, medical network practices could be made palatable, even defensible if this archaic method of discounting were redirected to evaluating medical practice patterns and outcomes. Think quality. Under present procedures, once providers are contracted by a network, they remain on the panel indefinitely, without performance evaluations or monitoring. Quality is not measured and outcomes are not reported. We have no proof of value. We have no quality measures for the treatment practices of the individual providers in the network. Yet, this higher level of information and process management is available now.

The technology and methodology to measure and monitor treating provider performance is a process of evaluating the data to measure quality in context with desired outcomes in Workers Comp. That is different than in group health or general health where quality criteria are determined by return to health whereas in Workers Comp we are more concerned with return to work. Evaluating data is not so difficult except for the fact that in Workers' Comp, the data related to a claim are often found in different locations, even in different companies. Regardless of where the data resides, it is rarely integrated for the purposes of understanding medical treatment in context with outcome. Provider networks hold vast amounts of medical billing data, but not claim outcomes data.

Medical billing data is rich in medical treatment detail along with billed charges for services delivered. But it has to travel through bill review where the charges are evaluated and recommendations made for adjusted payments based on appropriateness and fee schedules. The bills also go the networks where the unit discounts are applied. Bill review companies and networks have truckloads of data, but still not enough data.

The essential value-add to fair provider performance evaluation is claims level data. Treatment practices of providers found in billing and/or bill review must be considered in context of the entire claim. Billing, whether discounted or not must be viewed from the broader perspective of return to work, indemnity payments and outcomes. Continuously monitoring providers and their treatment practices in this way will reveal best practice providers, inept providers, and fraudulent providers. So what's the hold-up?

The concept of contracted provider networks is not the problem. The problem is the revenue and payment structure currently used by them. Not monitoring and measuring provider performance is unacceptable. But most networks do not want to consider alternative structures, structures that do not rely on unit discounts. It would mean changing their business model where revenue and payments are derived from different logic. But networks should consider the fact that employers might prefer to pay for networks (via their payers) that evaluate providers and provider performance. Employers might choose to pay for networks with providers who have better outcomes rather than misleading discounts and reported savings. But for now, the conspiracy of silence continues.

View additional articles by Karen Wolfe under Blogs at www.medmetrics.org