How to Manage Medical Provider Networks in WC

by Karen Wolfe

David DePaolo posted a response to the CWCI’s[1] recent study of the use of networks in California and their related savings entitled “MPN Means Managed”.[2] The CWCI study compares three network formats in California since the year 2000: PPO’s 2000-2002, the transitions years from PPO’s to MPN’s, 2003-2008, and MPN”s 2009-2011.  “While the use of the networks to medically manage treatment of work-related injuries has fulfilled the legislative intent to encourage network use, over time the MPN’s have not lowered the cost of medical care.”[3]

DePaolo says medical cost savings is only part of the picture. MPN’s need to be managed because the medical impact on other aspects of claims such as disability, indemnity, return to work, and other factors is significant.


So true. But if networks mean managed—the question is how?


Networks can be managed only by evaluating and monitoring individual performance.


Network—a sum of its parts
A network is the sum of its parts, the parts being the physicians and other medical providers in the network. A network cannot be managed as a whole. Each individual medical provider acts independently and with differing results. Moreover, each provider, even within groups or facilities, acts independently. Consequently, they must be evaluated and managed individually.


Since networks began in Workers’ Comp back in the 1980’s, their rationale has been discounting services to create savings. Units of service are discounted and portrayed to payers as savings. The assumption is that all medical providers are equal and all offer equal, quality medical care. But no one checked.


Evaluating provider performance
No one checked because it was easier to claim savings through discounts than to evaluate the performance of individual medical providers in the network. Evaluating medical performance is especially tricky in Workers’ Compensation because in addition to cost and medical treatment factors there are elements unique to the industry that must be considered. Indicators of quality performance are many and varied and they can be found in the data.


Quality indicators 
Quality indicators include medical treatment indicators such as direct medical costs, prescriptions, surgery, hospitalization, and medical procedures analyzed by injury type. Non-medical performance indicators that are influenced by medical providers include return to work, indemnity costs, and legal involvement, along with ultimate outcome indicators such as claim closure and disability ratings at the close of the claim.


The way to manage networks is to Identify the best providers and monitor their performance.


Objective evaluation 
The data necessary to evaluate medical provider performance, particularly physician performance, can be found in bill review data, claims system data, pharmacy data, and the utilization review system. Unfortunately, the data resides in different silos, but by combining the data from these sources at the claim level, individual provider performance can be measured. 

Because the data reflects actual treatment and events, it is objective and quantifiable. Select quality indicators in the data, adjust for case mix, and keep them constant over time.

Swapping discounts for quality
Medical costs have increased to 60% of claim costs, calling into question the benefit of network discounts. The truth is medical providers long ago learned how to overcome the cost of discounts by increasing treatment frequency and claim duration, as well as prescribing expensive procedures, among other tactics. Discounts on more looks like more savings.


Going forward, the major hurdle in managing networks effectively is to de-emphasize discounts, while underscoring and rewarding quality performance. In order to make that financially feasible for the networks, a different approach to discounting should be entertained. For instance, those providers who rate highest in quality performance would be excused from discounts. Likewise, those performing the worst would be discounted the most.



Managing the network
To manage a network, the performance of individuals within it must be evaluated and monitored continually. No longer does it suffice to sign up providers for the network and walk away. When individual provider ratings slip, action should be taken. Moreover, let providers know they are being monitored. It has been proven that observed performance leads to behavior change.

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics and technology services company. MedMetrics analyzes the data and offers online apps that super-charge medical management by linking analytics to operations, thereby making them actionable. MedMetrics also analyzes and scores medical provider performance. karenwolfe@medmetrics.org

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[1] California Workers’ Compensation Institute. http://www.cwci.org/research.html

[2] D. DePaolo. MPN Means Managed. DePaolo’s Work Comp World. June 10, 2015. https://www.workcompcentral.com/depaolo/index/post/1670487372170531417

[3] Ibid.

Do You Know Who Your Best Doctors Are?

by Karen Wolfe

In Workers’ Compensation, the medical provider network philosophy has been in place for years. Most networks were developed using the logic that all doctors are essentially the same. Rather than evaluate performance, the focus was on obtaining discounts on bills, thereby saving money.

Physician selection by adjusters and others has frequently been based on non-objective criteria. Those include familiarity, repetition, proximity, and sometimes just assumption or habit. Often the criteria is something as flimsy as, ‘We always use this doctor” or “The staff returns my calls”. The question is which doctors really are best and why?

Assumptions

The first assumption that must be debunked is that discounts save money. Doctors are smart—no argument there. So to make up the lost revenue for discounted bills, they increase the number of visits or services to the injured worker or extend the duration of claims by prolonging treatment. To uncover these behaviors, examine the data.

Recommendations

Amazingly, even doctors do not always make the best choices about other doctors. They may recommend doctors whom they know socially, professionally, or by informal reputation, but they may not know how they actually practice. They may not know a physician upcodes bills, dispenses medications, or over-prescribes Schedule II drugs. The data will reveal that information.

Referrals

Doctors may be unaware they are adding to claim complexity by referring to certain specialists. Again, familiarity and habit are often the drivers. On the other hand, duplicity among providers is fraudulent behavior and it can be uncovered by examining the data.

Clustering

Analysis of data can expose clustering of poorly performing, abusive, or fraudulent providers referring to one another. The analysis may also divulge patterns of some providers associated with certain plaintiff attorneys.

Management practices

Treating doctors influence claims and their outcomes in other ways. Management indicators unique to Workers’ Compensation such as return to work, indemnity costs, and disability ratings can be analyzed in the data to spotlight both good and poor medical performance. These outcome indicators are either directed by, or influenced by the physician and they can be uncovered through data analysis.

Clinical quality

Claims adjusters and other non-medical persons simply cannot evaluate the clinical capability of medical providers, especially doctors. Performance analysis must take place at a higher level. Evaluations for specific ICD-9 diagnoses and clinical procedures such as surgery must be made. Frequency, timing, and outcome can be examined in the data in context with diagnoses and procedural codes, thereby disclosing the excellence or incompetency of physicians.

Negative clinical outcomes that can be analyzed include, but are not limited to hospital readmissions, repeated surgery, or infection. Physicians associated with negative medical outcomes should be avoided.

Fairness

When analyzing clinical indicators for performance, care should be taken to compare only similar conditions and procedures. Without such discrimination, the results are dubious. Specificity is critical.

When using data analysis to find the best doctors and other medical providers, fairness is also important. Provider performance should be compared only with similar specialty providers for similar diagnoses and procedures. Results will not be accurate or reliable if performance analysis is not apples-to-apples.

Pushback

Medical providers may question data analysis to evaluate performance claiming they treat the more difficult cases. The data can be analyzed to determine diagnostic severity as well. Diagnostic codes in claims can be measured and scored, thereby disclosing medical severity.

Find the best practice doctors

Now is the time to step up to a much more dignified and sophisticated approach to selecting medical providers. Decisions about treating physicians must be based on fact, not assumption or habit.  Fortunately, the data can be analyzed to locate the best-in-class and expose the others.

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics and technology services company. MedMetrics analyzes the data to score medical provider performance and offers online apps that super-charge medical management by linking analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

 

California SB 863, a Guide for Building and Monitoring Networks with Intelligence

Part I
by Margaret Wagner and Karen Wolfe

Background

Building a medical provider community for Workers’ Compensation can be challenging, regardless of the jurisdiction. Nevertheless, carving out a legislatively-compliant, outcome-based, quality network is doable and the return on investment is certain.

Injured workers deserve good medical treatment while employers and payers deserve transparent and fair costs. Moreover, industry research clearly shows that poorly performing providers are costly and lead to abysmal outcomes for injured employees, their families, and employers. This article features California SB 863 regarding MPN’s (medical provider networks), but the concepts apply to creating intelligent medical provider networks anywhere.

Traditional medical networks

Medical networks in Workers’ Comp are not new, in fact, PPO’s (Preferred Provider Organizations) have been around in Workers’ Comp since the early 1990’s. Traditionally, the network administrator contracts with all physicians and other treating providers available. The trade is, providers exchange their discounted fees for increased patient volume. However, quality of medical care measured by outcomes and acknowledgment of Workers’ Comp nuances such as return to work are not considered. However, some jurisdictions have made attempts to modify this practice.

Old SB 899—LC 4616 Medical Provider Network (MPN)

In April of 2004 the governor of California signed SB 899 into law. It addressed MPN’s under section LC 4616 (d) stating “In developing a medical provider network, an employer shall have the exclusive right to determine the members of their network.”

Encouragement to analyze provider performance is clear under section LC 4616.1, “Economic Profiling means the evaluation of a particular physician, provider, medical group,  or individual practice associations based in whole or in part of the economic costs or utilization of services associated with medical care provided or authorized by the physician, provider, medical group, or individual practice association.”  In other words, quality and costs matter and should be analyzed and monitored.

Direction of care

An important opportunity in California and many other states is employers and payers are allowed to direct care for injured employees to doctors and other medical providers in their medical provider networks. After selecting the best doctors for a network, injured workers can be directed to them, a win-win scenario.

Even in states where direction of care is not permitted, payers or employers who have intelligent networks can give injured employees information regarding who are the best in class doctors based on objective analysis. Doing so is a service to employees who will often make use of them in selecting a doctor.

Ramping up—SB 863

The logic of creating an intelligent network with measureable outcomes was recently fortified with California SB 863, effective January 1, 2013. The old bill is strengthened under SB 863, LC 4616 (b) (2)  and LC 4616 (b)(3) “ Every MPN must establish and follow procedures continuously to review the quality of care, performance of medical personnel, utilization of services, facilities, and costs.”

Quality control

In other words, all MPN plans must have procedures in place to continuously review the quality of care and costs for medical providers in the network. The mandate is now even stronger to evaluate and monitor medical provider performance. No longer is it adequate to contract with medical providers, print the list of providers in the network, and forget it.

However, many employers and payers are at a loss about how to analytically select and continuously review provider performance.

Intelligent networks

Legislative mandates and industry wisdom remove the question about whether to upgrade network quality through outcome analytics and monitoring. Yet, selecting the right doctors and other providers, then monitoring, and managing an intelligent MPN is a business in itself.

Most organizations do not have the appropriate resources and should outsource to companies that focus on intelligent network design, provider selection through analytics, review, and management. The following are some details for building and managing intelligent networks, whether they are legislated or not.

Gather the data

The way to develop an intelligent network is to select the best in class medical providers determined by analysis of actual performance demonstrated in the data. Historic data must be combined with current and continually updated data to evaluate performance now and going forward. Reviews of updated data should be frequent and regular.

Additionally, the data must be derived from a broad spectrum of sources. Workers’ Compensation organizations typically segment data into bill review data, claims, pharmacy (PBM) and other silos such as UR and Medical Case Management. All are necessary for provider performance assessment. Do not be misled by those who say bill review data is adequate to the task.

Integrate the data

Integrate the data with claims as the focal point for a complete picture of the claim. Execute algorithms that analyze the data and score provider performance based on multiple performance indicators. Individual medical providers, groups, and facilities should all be analyzed in this regard.

Continuous data update and electronic monitoring insures network and individual provider quality going forward as prescribed in SB 863 legislation. Maximize medical network quality and cost control using analytics, thereby complying with legislation  and maximizing positive benefits.

More about building networks with intelligence

Next week Part II of this series will add more details of California SB 863 regarding MPN’s and how to create networks with intelligence using analytics and common sense, an imperative for all medical networks in all states.

Margaret Wagner is President and CEO of Signature Networks Plus, Networks with Intelligence™. She is considered an expert in network selection, monitoring and management, thereby creating Networks with Intelligence for clients. MWagner@signaturenetworksplus.com

Karen Wolfe is President and CEO of MedMetrics®, LLC, a Workers’ Compensation analytics company. MedMetrics scrubs and enhances provider data in systems, integrates the data from organizations’ disperse systems, then analyzes, scores, and monitors medical provider performance. MedMetrics also offers online “apps” that link medical analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

 

EVEN MORE Tips for Building a WC Medical Provider A Team

by Karen Wolfe

Fact

Significant dollars can be saved by getting injured workers to the best doctor. Evidence supporting this fact is the mounting Workers’ Comp industry research clearly stating treatment by well-informed and well-intentioned medical doctors results in lower costs and better outcomes.

Belaboring a point

As repeatedly stated in this series, many doctors in networks are not well-informed or well-intentioned regarding management of Workers’ Comp claimants. As a consequence of their involvement, claim results are lacking, costs are high, and outcomes are precarious. This series of articles, “Tips for Building a WC Medical Provider A Team”, is intended to describe how to identify doctors who know the ropes in Workers’ Comp using indicators in the data.[1]

Beyond the indicators discussed in the previous articles in this series, additional salient data elements are available in the data to broaden the scope of medical management evaluation. What makes this approach so feasible is that solid knowledge of who demonstrates best practices is revealed in the data. However, to find that knowledge, some operational processes and the data itself need refinement. Access to the data and its quality must be addressed.

Getting to the knowledge in the data

Regrettably, access to the data by the right persons is often a problem. Those who know best what to look for, the business and clinical professionals, cannot use current data in a practical, work-in-progress manner. The reasons are many.

First, relevant data resides in separate databases that must be integrated to understand all activity in a claim. Moreover, in most organizations, provider records are simply inaccurate and incomplete. Until now, the need for them was for reimbursement purposes only, not performance evaluation. Yet another problem is that provider records are frequently duplicated in the data, making it difficult to accurately evaluate individual medical providers’ treatment process and results.

Data silos

Critical data for analyzing medical provider performance is still fragmented in most payer organizations. While people have long complained about data silos in Workers’ Comp, little has been done to correct the problem. If anything, data sources have increased. Pharmacy databases have been added, for instance. Yet the databases are not integrated on the claim level, thereby portraying the claim as a whole. Data silos too often lead those who are attempting to evaluate provider performance to rely on a single data source.

Single source analysis

Relying on one source of provider performance data is foolhardy. Nevertheless, bill review data is often used, but by itself is inadequate to tell the whole story. Claims level data is also critical to weigh return to work data, indemnity payments, and legal involvement associated with claims and ultimately, to individual doctors. None of these data items are found in bill review data, yet these are essential to complete analysis of provider performance. Because in Workers’ Comp, doctors drive the non-medical claim costs as well as the direct medical costs, these data items are essential to evaluating the quality of their performance.

Data quality

The problem of data quality can be even stickier. Traditionally, medical provider records are kept in the claims database, along with records of other vendors for payment purposes. All that is needed for bill payment is a name, address, and tax ID. Unfortunately, the same provider is frequently added to the database when a new bill is received. This outdated database management practice leads to slightly different records added for the same provider.

Data optimization

To evaluate medical provider performance, more information about individual providers is needed such as accurate physical addresses. PO Boxes will suffice for mailing checks, but injured workers cannot be sent there for treatment.

Merge duplicate records
Tax ID’s are still important for reimbursement and 1099 purposes, but often multiple doctors are represented by one Tax ID. To evaluate provider performance, individuals must be differentiated in the data. State medical license numbers and NPI (National Provider Identification) numbers are needed. Frankly, some doctors deliberately obfuscate the data by operating under multiple Tax ID’s and multiple NPI numbers. Consequently, provider records must be merged, scrubbed, and optimized before any analysis can begin.

What to do

For most organizations, choosing best practice providers by analyzing the data is challenged by the shortage of accurate and complete data. Therefore, those wanting to control costs by choosing the best providers should obtain provider performance analysis and scoring from a specialty third party, one that is expert in data integration from multiple sources, as well as provider data scrubbing and optimization.

When behaviors of doctors are analyzed using clean, integrated data, the well-informed and well-intentioned in Workers’ Comp will rise to the surface.

Karen  Wolfe is the founder and president of MedMetrics®, LLC. MedMetrics specializes in medical provider data integration, optimization, and analysis of performance for Workers' Comp. Additionally, MedMetrics leverages analytics and technology to provide powerful “apps” online that strengthen medical management for effective medical cost control. Visit MedMetrics to learn more or contact karenwolfe@medmetrics.org

[1]  http://medmetrics.blogspot.com/2013/03/tips-for-building-medical-provider-team.html

 http://medmetrics.blogspot.com/2013/04/more-tips-for-building-wc-medical.html

 

Tips for Building a Medical Provider “A” Team

by Karen Wolfe

The “noise” in the Workers’ Comp industry about increasing medical costs is not subsiding. If anything, the chatter is swelling into a crescendo and much of it is relevant and important. Recent conferences such as the Workers’ Compensation Research Institute (WCRI) underscored the continuing problem of Opioids. Also of concern at the conference was physician-dispensed drugs.

Studies show when Opioids are prescribed inappropriately and when physicians sell patients medications directly from their offices, claim costs increase and outcomes deteriorate. However, while discussion of the topic increases, new initiatives in the industry designed to target the problem are scarce.

Source of the problem

The source of these two major cost problems is certain treating doctors. Doctors are the ones licensed to prescribe drugs and some are abusive. Probably only a few of the doctors are perpetrators, but the trick is to know in advance which doctors they are. Particularly for organizations that have employees geographically spread, this is a continuing challenge.

Networks are not a safe haven

Payer organizations have been lead to believe their networks are their safe haven. If an injured worker is sent to a network provider, a discount on medical services can be assured. Unfortunately, networks are known to contract with every physician and ancillary provider alive, without consideration of the provider’s Workers’ Comp knowledge, interest, or medical integrity. Nor are quality, overall cost, and outcomes considered.

Networks do not vet physician performance. They allege savings based on discounts off medical bills, but the number of bills is not measured. Most networks have not stepped up to apply analytics to provider performance so payers must look elsewhere.

Networks lack necessary data

The only practical way to evaluate provider performance in order to select the best is to analyze the data. The problem for networks is they do not have the scope of data necessary to fairly evaluate performance. They receive medical bills, discount them, take a cut, and pass them back to the payer. But medical bills alone are not adequate for evaluating provider performance.

Data from multiple sources is needed

To understand a provider’s performance, claims level data is also essential. It is needed to evaluate the uniquely Workers’ Comp nuances of return to work, indemnity costs, legal involvement, claim duration, timing, and other key factors.

Opioid data, another source

In the case of Opioids, the best source of data for evaluation is from the Pharmacy Benefit Management program (PBM). The PBM data set contains the detail of what drug was prescribed and when, who prescribed the drug, and where it was filled. However, Indicators of physician dispensing will not be found in PBM data.

Physician dispensing data

Physician dispensing will appear as an item on a normal bill from the treating doctor. The degree to which it is camouflaged will vary and it may or may not be noted by the bill review system. Many bills are summarized by the time they reach the claims adjuster, so adjusters cannot discern which bills are physician-dispensed drugs. Analysis of the data is the best approach, not with the goal of avoiding payment, but to avoid the physician altogether.

Networks are a platform for analysis

Payer organizations should use their network providers as a platform for selecting their A Team. By analyzing the data, the best practice providers will surface and injured workers can be directed to them. Unfortunately, most organizations do not have the necessary resources to accomplish that task.

The solution

The best solution is to invite a third party that specializes in analyzing Workers’ Comp data and identifying the best practice medical providers in your data. Avoiding doctors that prescribe Opioids and those that dispense medications from their offices will save thousands of dollars on any given claim—more than enough for ROI on the third party service. Savings can be measured in reduced claim costs and far better outcomes compared to claims where the perpetrators of these abuses were involved. Identifying the best medical providers and directing injured workers to them are powerfully effective cost containment initiatives.

Karen Wolfe is president of MedMetrics which specializes in medical provider performance analytics with easy user search tools. We analyze your data for you to score providers based on multiple indicators. Visit MedMetrics to learn about MedMetrics Provider Performance Suite of information services, including detailed Provider Performance Analysis and Master Provider Index, a quick search for best practice providers by specialty and geo-zip. For questions, contact karenwolfe@medmetrics.org.