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The MedMetrics blog provides comments and insights regarding the world of Workers’ Compensation, principally, issues that are medically-related. The blog offers viewpoints regarding issues affecting the industry written by persons who have long experience in the industry. Our intent is to offer additional fabric, perspective, and hopefully, inspiration to our readers.

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Wednesday, January 16, 2013

Diagnostic Scoring: a Powerful Predictive Indicator Uncovered

by Karen Wolfe
 
Wouldn’t it be great to know how medically serious an injury is at the outset of the claim without calling the doctor? Knowing the diagnostic severity for a claim is an invaluable decision support tool for many reasons. For one, knowing how serious the injury is helps in setting reserves.  It is also useful in applying resources appropriately for medical case management oversight. Moreover, scoring diagnostic severity on an ongoing basis is a means of capturing claims that are quietly migrating into greater complexity and cost.

Such knowledge has traditionally been elusive because the only available source was the doctor. It meant talking with the doctor to get a “feel” for how serious the injury is, not always a realistic approach. However, scoring  and monitoring claims for their diagnostic seriousness is a powerfully proactive medical management methodology.

ICD-9 documentation
Medical diagnoses are the way doctors describe medical conditions. ICD-9’s are required on standardized billing forms such as the HFCA 1500. The treating doctor uses ICD-9 codes, a standardized coding system, to describe injuries and illnesses.[1] While many factors can contribute to claim complexity, risk, and cost, a highly significant indicator of claim risk is the seriousness of the injury. It is almost too obvious.

Injury severity drives cost
The medical seriousness of the injury drives not only the medical costs of a claim, but also indemnity costs, return to work, claim duration, and even legal involvement. Sometimes more serious injuries spawn greater feelings of entitlement on the part of the claimant. Obviously, the more serious the injury, the more medical services will be required. Regardless of other factors, injury severity is the most basic driver of claim cost. Key decisions rest on how serious the injury is, but measuring severity by scoring ICD-9’s has not been done in the Workers’ Comp industry— until now.

Finding ways to measure and predict claim costs can be elusive, yet a necessary business requirement. The process relies on solid information gained early and throughout the course of the claim. Unfortunately, diagnostic severity has been overlooked as a source of information.

Predictive modeling
Predictive modeling using advanced mathematical devices is a valuable tool to estimate the end question of expected claim cost. It provides insight into future costs based on historic data found in similar cases. Analyzing historic data can often foretell the future when similar circumstances occur in a claim. Nevertheless, another easier and less expensive way to gain future cost insight is through diagnostic severity scoring.

Scoring Injury Diagnoses
A severity (seriousness) score is assigned to individual diagnoses found in medical bills. The bills found in bill review data can be monitored electronically throughout the course of the claim, beginning at the onset. Keeping a running score of diagnostic severity of a claim is revealing.

Elements of injury severity
Research has demonstrated what many professionals have long known: comorbidity adds to claim complexity and cost. Comorbidity means the claimant has other health conditions in addition to the workplace injury. For instance, the claimant might also be diabetic or have a cardiac condition or be grossly overweight.. These additional medical conditions can have an exponentially negative effect on recovery and therefore, claim outcome.


Research has also shown that age impacts claim complexity and cost, as well. Therefore, age should be factored into the scoring methodology.


Migrating claims accrue diagnoses
Claims adjusters and medical managers are well aware of another fact regarding diagnoses in claims. Claims accrue ICD-9’s as they migrate and become more complex. Consequently, it is important to score injury severity at claim outset and then continuously throughout the course of a claim. Claims that begin with a Medical Only status often insidiously creep into much more menacing levels without notice. Awareness of accumulating claim diagnostic severity scores prevents unseen slippage.

Timely knowledge saves money
The medical portion of Workers’ Compensation claims now accounts for 60% of claim costs, therefore, medical analytics is an even more critical component of claim management. Diagnostic severity scoring is a powerful addition to an organization’s portfolio of knowledge tools. Calling the doctor to determine how serious the injury is can be an unreliable and frustrating approach. A much better method is available.

Learn more about diagnostic scoring services at MedMetrics. It’s easy, reliable, and affordable.


[1] ICD is the abbreviation for the International Statistical Classification of Diseases and Related Health Problems. ICD-9 refers to the ICD version currently in use. The ICD-10 version will be in required use in October, 2014.
 

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