How to Make Workers' Compensation Analytics Actionable

by Karen Wolfe

Analytics demystified

Much is said about the savings value of analytics, yet few in Workers’ Compensation have actually implemented them. Analytics are often misunderstood, making the idea itself daunting. Even those who have implemented analytics lament they really do not know what to do with them.

Simply stated, analytics means analyzing the data for the purpose of gaining new understanding of the business process, identifying or maximizing revenue streams, and uncovering cost drivers in the system. That other industries use analytics is well known. The food industry, for instance, has made their use of analytics quite obvious. A brief examination describes how analytics can be simple.

Monitoring transactions

Supermarkets and grocery stores have long monitored purchase transactions with customers. Customer purchases are automatically documented at the register. That is the raw data. When those transactions are analyzed in context with other data, such as inventory turns and factors such as season and weather, conclusions can be drawn about how buying behavior changes when outside conditions occur. It can even be assumed (predicted) the buying patterns that have occurred in the past will be similar in the future when similar conditions occur.

Analytics made actionable

The food industry views data analyses as a work-in-process operational tool. While monitoring purchases, weather conditions are consulted electronically for all locations. Based on combined conditions occurring in a region that are known to effect buying patterns, the computerized distribution system is alerted and redirected. Periodic high demand inventory is immediately diverted to the affected region.

Data analysis is translated to operational intervention. The outcome is increased sales revenue and satisfied customers resulting directly from data analysis and monitoring with appropriate and timely action.

Translated to WC Managed Care

Similar to the supermarket industry, the Workers’ Compensation industry collects data continually. Also similar is the fact that different systems are used for different purposes, but all are related to the operation. In Workers’ Compensation the central operation is the claim.

Bill review systems document medical bills received and recommend payment based on data analysis (analytics). Claims systems document medical bills paid, indemnity paid, work loss, legal actions and other factors, all related to the claim. Still more data is collected related to pharmacy, utilization review and others. Amazingly, the rich data is rarely converted to operational tools.

Opportunity cost in Workers' Compensation
Unfortunately, most in Workers’ Compensation neglect to integrate and monitor their verdant data to identify cost drivers and opportunities to mobilize action early to thwart or limit potentially high risk and costly situations affecting claims. Integrating and concurrently monitoring the data from the disparate sources, can identify conditions and events that portend risk and cost—not dissimilar to monitoring storms and inventory in the food industry.

Link analytics to operations

In the supermarket example, analytics are linked to operations by mobilizing changes in distribution. Current information received on the ground programmatically alters the operational process. Similarly in Workers’ Compensation, informational alerts sent to appropriate persons gives them the jump on potentially adverse conditions in claims. Adjusters and nurse case managers receive specific information regarding new conditions in a claim and mobilize action. The critical information is derived from analysis of the integrated data and automatically delivered to the right locations for action.

Early intervention saves

In the food industry the distribution system is notified when adverse conditions occur in a specific location. The analogy in Workers’ Compensation is the right person is notified when adverse conditions occur in a claim. For instance, when known high risk conditions occur in a claim, that information is automatically transmitted to an appropriate person. A simple example is when multiple prescriptions of Opioids are found in the currently monitored data, a nurse case manager is electronically notified to take action.

Analysis of current, integrated data can be programmed to automatically create alerts to appropriate persons who take action, thereby making analytics actionable.

Infrastructure and efficiency

Besides gaining dollar savings and claim outcome value from analytics and technology making analytics actionable, other positive results are gained. A formal infrastructure is created for medical management, thereby optimizing efficiency. The Workers’ Compensation industry can dramatically benefit from making analytics actionable.

Karen Wolfe is founder and President/CEO of MedMetrics®, LLC, an Internet-based Workers’ Compensation analytics company. MedMetrics provides the apps to make analytics actionable.

How to Tap the Secret Power of ICD-9's

by Karen Wolfe

The medical portion of Workers’ Compensation claims now meets or exceeds 60% of claim costs. That fact alone should easily convince payers to focus on the rich medical information in their data. Very powerful information residing in claims data is virtually untouched—diagnostic codes in the form of ICD-9’s. The problem is few in the industry really understand ICD-9’s or in what ways they could inform powerful medical management.

ICD defined

ICD-9 codes are not unique to Workers’ Compensation. ICD-9’s are the World Health Organization's International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). They are a standardized method of describing injuries, illnesses, and related issues worldwide.

ICD is the classification that codes and classifies mortality data worldwide. The ICD-CM is used to code and classify morbidity data from inpatient and outpatient records and doctor’s offices.

The purpose of the ICD and of WHO (World Health Organization) sponsorship is to promote international comparability in the collection, classification, processing, and presentation of mortality statistics. New revisions of the ICD are implemented periodically so that the classification also reflects advances in medical science.

ICD’s in standard billing forms

Those who bill for medical services in the U.S. are required to use one of two CMS (Center for Medicare and Medicaid) standard forms, the HCFA-1500 (Health Insurance Claim Form) for outpatient and UB-04 Unified Billing) for hospitals and other facilities. Both standardized forms require the medical provider to list ICD-9’s appropriate to the medical procedures for which they are billing. The verdant data derived from these forms should be analyzed and incorporated into managed care processes.

Unwieldy and ignored

Bill review organizations and payers capture data from the standardized billing forms in their systems. Nevertheless, while the ICD information is documented in systems, it’s use usually stops there. ICD-9’s are difficult to interpret.

ICD-9’s on bills are displayed in the form of codes, not descriptions of injuries and illnesses and they number in the thousands. Individuals cannot remember the codes, nor do they have the time to look up codes for interpretation. Instead, they simply ignore them.

Secret power of ICD

Incremental essential knowledge resides in ICD-9 codes that can be translated to powerful medical management. When they are monitored electronically and concurrently, they reveal and inform.

ICD-9’s reveal migrating claims

For instance, migrating claims accrue ICD’s. Migrating claims are those that are not going well, are becoming more complex and costly, often an insidious process that is missed by claims adjusters and medical case managers until considerable damage is done. What happens in migrating claims is the injured worker is not recovering for some reason and is referred to multiple specialists. Each specialist adds new ICD-9’s to the claim.

As a claims migrates, and the number of ICD-9’s associated with it mounts.

Computer monitoring

Using a computerized system especially designed to monitor ICD-9’s is a powerful knowledge solution. Alerts are sent to appropriate persons when the number of ICD-9’s in a claim increases beyond a designated point. Migrating claims cannot be missed and intervention is early, therefore far more effective.

ICD-9’s are predictors

Another way to tap the secret power of ICD-9’s is to score them individually for medical severity, the seriousness of the injury or illness. Each claim then contains a total ICD-9 score in the system for medical severity. As ICD-9’s are added during the course of the claim, the claim ICD score increases. As a claim migrates and accumulates ICD-9’s, an appropriate person is automatically notified by the system. Migrating claims cannot go unnoticed.

Claims with high ICD-9 scores are predictors of risk and cost. Claim ICD-9 scores can be monitored from the outset and throughout the course of the claim.

ICD-9’s scores level the playing field

The claim ICD-9 score reveals the seriousness and complexity of a claim. Medical doctors managing difficult claims can be differentiated from those handling less arduous claims, thereby creating fairness in measuring provider performance.

Many indicators are used for claim monitoring and provider performance including medical cost, frequency and duration of treatment, indemnity costs, return to work and multiple other factors. The claim ICD medical severity score automatically predicts trouble and alerts the appropriate medical managers.

Moving on—ICD-10

The ICD-9 contains thousands of codes. Moreover, the ICD-10 revision will more than double the number of codes, making its information value exponential. ICD-10 is slated to be activated in October of 2014.

Karen Wolfe is President and CEO of MedMetrics®, LLC, an online Workers’ Compensation analytics company. MedMetrics analyzes data and provides “apps” online to link analytics to operations, thereby making them actionable. MedMetrics also monitors concurrent integrated data to detect potentially high risk or high cost events in claims and automatically alert the appropriate persons.