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.

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[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.

 

You Might Be in the Medical Business Now

By Karen Wolfe

It is well-known in Workers’ Compensation direct medical costs now amount to 60% of claim costs. For most businesses in most industries, when the bulk of expense dollars shifts significantly, the business process immediately adjusts to target the problem. Not in Workers’ Comp.

Managed care programs have remained essentially unchanged since their inception, now nearly thirty years past. Originally designed to control medical costs, many managed care programs have fallen short. Some of the original designs were good while others were faulty from the start. That none has evolved, taking advantage of advances in technology, is disheartening.

Retro networks

For example, most medical provider networks not only have not changed, but have somehow sustained the illusion that they offer value. They report discounts on units of medical services. Shady providers respond by ramping up the number of treatment services and the duration of treatment to make up for revenue lost to discounts. Ironically, the result is more discounts reported! No one screams “Foul!” and the elephant in the room smugly sits there.

The bad guys

Industry research tells us less than 4% of the doctors generate over 70% of the costs.[1] It’s easy to figure out who those people are by analyzing the data, so what keeps organizations from steering away from them? Individuals in the 4% bracket should be identified and claimants directed away from them. Better yet, stop referring to them just because they are in the network (and generating those bogus discounts).

Medical management is complicated

Many payers feel powerless in managing medical costs. Claims adjusters and Workers’ Comp managers may know a lot about work injuries, but they cannot be expected to affect system change. Rather than trying to manage doctors, they should simply avoid the bad ones. Even in states where directing care is not allowed, intelligence about provider performance and claim outcomes is useful to inform decisions by claims adjusters and injured workers.

Monitor the data

A crescendo of concern about Opioid use and abuse has emerged recently. It’s not the drugs themselves that escalate costs, but the collateral damage they inflict on injured workers. Dependence, addiction, and pain confusion prevent, delay, and complicate recovery. Monitoring the data in real time to discover abuse in the form of repetitive prescriptions can be very effective. Most complex claims develop over time and would be more easily resolved and costs avoided when discovered in early stages.

Predictive modeling

Predicting the claims that are likely to become complex is an excellent initiative. Still, monitoring all claims electronically, concurrently, and continuously may be a more practical approach. For instance, an alert is sent when a second or third Opioid bill appears in a claim. Now is the time to  intervene, whether the claim was predicted to be costly or not.

Even when a claim is tagged using predictive modeling, the only logical procedure is to monitor that claim from the beginning and intervene as conditions warrant. By the same token, concurrent data monitoring sends an alert when something suspicious arises in a claim. All claims can be monitored electronically rather than the few singled out through predictive modeling. It is a powerful medical management tool and nothing slips between the cracks.

Technology-intensified medical management
Tackling the medical part of the business can be complex and difficult, especially for people not specifically trained in it. However, applying analytics and delivering information appropriately through technology tools is powerful. Deliver the right information to the right person at the right time so that early intervention will impact medical costs more effectively. Well-designed technology will find problems early and inform the appropriate persons, thereby linking analytics to operations and significantly impacting results.

Workers’ Comp payers should recognize they can’t avoid addressing the medical portion of claims. They are, or should be in the medical business. It’s time to get serious and implement the expert methodologies available to actualize intended managed care initiatives. Continuing business as usual guarantees continuing substandard results.

Many organizations do not have the resources to develop the kind of tools briefly described here. Instead, they can purchase them from a third party Workers’ Comp managed care technology company. It is doable, affordable, and effective. Even small organizations can partake in the benefits.

You are invited to visit MedMetrics to learn more about its analytics and technology tools that manage medical costs.

 

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[1] Bernacki, et.al. “Impact of Cost Intensive Physicians on Workers’ Compensation” JOEM. Vol. 52. No. 1. January, 2010.

 

Your Data can Spot Creeping Catastrophic Claims

by Karen Wolfe

 “One of the biggest cost drivers in Workers’ Compensation is seemingly “average” claims that take a turn for the worst and result in several years of medical treatment and disability.”[i]

Too often seemingly innocuous claims lay under the radar, unnoticed until the damage is done. Mark Walls in this article does an excellent job of pointing to several conditions that should serve as indicators of impending trouble. He discusses issues such as return to work, comorbidities, and psycho-social factors that can contribute to claim deterioration. His ideas are good and there are many more indicators that can be added to the list to recognize creeping calamity.

More indicators

In fact, there are many subtle tip-offs in claims that could lead to effective prevention if noticed earlier. Delayed injury reporting and treatment is one. We know from industry research that a delay between the date of injury and first medical treatment is a predictor of claim complexity, regardless of the reason. Speculation regarding motivators of delay in filing a claim or to seeking medical treatment may not be as important as actually identifying the situation early and intensifying scrutiny of the claim. The opportunity is to discover claims with migrating intensity early, thereby avoiding unnecessary cost.

Knowing is not enough

Unfortunately, knowing what conditions in claims might lead to trouble is not quite enough. Trying to apply the knowledge without a defined process has variable results. Manually identifying claims with perilous conditions is an inconsistent and inefficient endeavor because mere humans simply cannot do it well. Professionals, busy with a myriad of tasks, cannot monitor claims consistently enough to detect insidious conditions. Better process tools are needed and, happily, they are available.

Computer-aided medical management
Technology can be made a powerful work tool in Worker’s Compensation. A specially designed computer software program will monitor current claim data combined with historic data continuously, something mere humans cannot do. A custom computer program will detect trouble every time and notify the appropriate person in the organization so that focused intervention is mobilized.

A software program designed to spot combinations of data elements that portend risk and cost is a powerful cost control tool. It continually searches the data without human involvement. When an adverse situation is discovered, it automatically notifies the right persons.

Work-in-progress tool

Computer-aided medical management programs are designed to be work-in-progress tools that inform the claims management process in real time. They are driven by combinations of data elements that when they appear together in a claim, portend developing risk. Importantly, the computer-aided management tool must continually monitor current and historic data to uncover risk from the broad spectrum. For instance, ICD-9’s in a clam are data elements that can reveal impending trouble in near real time when monitored by a specialized program.

ICD-9 ‘s as windows into risk
ICD-9’s (The International Classification of Diseases, 9th Revision), the medical description of the injury or illness in a claim, can disclose much more than previously thought. ICD-9’s are documented in each bill submitted by treating medical doctors and other providers. They are windows into claim complexity at the start, but they are also powerful real time predictors of impending trouble.

Migrating claim severity
One true thing about claims is as they migrate from medical only status to increasing complexity they accrue ICD-9’s. As the situation deteriorates, more medical providers enter the picture, more medical services are provided, and more ICD-9’s are added to the data. Stated simply, monitoring current and accumulated ICD-9’s will reveal those claims that are unstable and migrating downward. A system designed to monitor ICD-9’s for severity (seriousness) will spot migrating claims.

Smart systems
A system designed to monitor ICD-9’s is a smart system containing information about how serious individual ICD-9’s are. Like pharmacy programs that alert for unsafe drug combinations, an ICD-9 scoring system will alert for dangerous combinations of comorbidities, age, and accumulated diagnoses. A claim is dynamically and continuously scored for severity and the right persons are notified automatically.

Smart systems that monitor current and historic data for combinations that portend complexity and cost can significantly recharge managed care initiatives. They are the next generation business solutions that are available now for those who are serious about controlling costs.

To learn more about MedMetrics smart systems, contact karenwolfe@medmetrics.org.
 

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[i] Walls, Mark. Creeping Catastrophic Claims—How to Spot Them and Stop Them. Business Insurance. June, 12, 2012. http://www.businessinsurance.com/article/99999999/NEWS080105/120609913