Results Won’t Change With the Same Thinking Used to Create Them

By Karen Wolfe

The medical portion of Workers’ Compensation claim costs continues to increase, according to a recent report by the NCCI. At the same time, managed care methods and programs in the industry that were originally designed to control medical costs have not changed their processes in twenty-five years.

Old thinking

Programs such as medical provider networks (PPO’s, HCO’s, MPN’s) have not changed their approach over time. Most network companies continue to contract with every medical provider everywhere. In exchange for sending providers new patients, the providers offer discounts on units of service. Discounts are reported as savings by the networks.

As a result of this practice, both parties benefit from increases in frequency and duration of service. Providers increase their revenue by increasing units of service and networks boast the savings from discounts. It seems absurd, but the industry continues business as usual while costs continue to escalate.

“We cannot solve problems with the same thinking we used to create them.”  Albert Einstein

In the beginning, discounting units of medical services seemed like a good idea. It created a revenue stream for networks as they signed on new providers and providers were happy with the Workers’ Compensation business gained. Moreover, monthly reports of discounted medical fees made employers and payers feel good.

New thinking 

Now, however, payers are recognizing the problems in this model. They understand quality, effective medical care within the context of Workers’ Comp is more important and usually less costly overall. Payers want to select providers who have proven they can do the job and are willing to pay fair medical fees to get it done.

If networks want to join in, they must figure out how to monetize their products without the discount charade. That is difficult. Nevertheless, while they work to solve their problem, payers can move forward without them. The focus should be on carving out providers from networks, providers who will serve the claimant with quality medical practices while supporting employer needs in the context of Workers’ Comp.

Forward thinking
Forward thinking employers and payers are no longer accepting any and every doctor. Now they are turning to analytics to identify best-in-class doctors, those who are extracts of excellence drawn from larger networks. Yet, that is not easy either. In order to measure medical performance through analytics, several crucial steps must be taken first, none of which are used by traditional networks.

Prerequisites of analytics

Before analyzing the data for objective provider performance, the data itself must be collected, integrated, and improved. Most provider records in Bill Review and claim systems are lacking the level of data quality and essential elements needed for analysis.

Duplicate records and errors

Most computer systems contain duplicate provider records resulting from faulty data entry methods. Obviously, a fair assessment of provider performance cannot be made when an individual provider is spread across several records in the data. This means some claim experience is tied to one instance of the provider and other claims are tied to still other records for the same provider. The records must be corrected and merged.

Unique identifiers

Besides cleansing and merging the data, crucial identifier elements must be added to provider records. Most systems contain provider Tax ID numbers, but those are not unique to individuals. Any number of doctors can use one Tax ID since it is for payment purposes only. The only way to differentiate individuals within practicing groups is to include NPI (National Provider Identifier) and state medical license numbers in provider demographics in the system. Each individual doctor can then be correctly identified and tied to their correct activities. Even so, there are more factors to consider before analyzing medical performance using analytics.

Medical specialty

Medical specialty is important to assessing medical provider performance. In fairness, orthopedic surgeons should be compared against other orthopedic surgeons, not psychiatrists. Many systems do not contain the provider’s specialty but it is important enough to take the trouble to add that information to the system. One way is to interpolate specialties from the CPT (Current Procedural Terminology) codes used by providers in their bills.

Get expert help

Data omissions and inaccuracies prevent good and reasonable assessment of medical performance. Unfortunately, medical provider data in the Workers’ Comp industry is abysmal across the board. Correcting, merging, and optimizing provider records in data systems requires unique skills not usually possessed by claims management system professionals. Get help.

Claim cost results won’t improve when the same old network thinking is used that created them. The way to achieve quality and cost control is to first optimize the data, then evaluate provider performance. Create a subset of excellent providers for a “designer” medical network that will impact claim costs and outcomes.

To learn more about where to get help for correcting and optimizing provider records and analyzing provider performance, contact karenwolfe@medmetrics.org or 541-390-1680. You are also invited to visit MedMetrics.