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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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Thursday, September 22, 2011

Injury Severity—Scoring Injury Seriousness

Components of claim cost
Factors that drive claim costs in Workers’ Compensation are many. Among them are the type of injury, the claimant’s job, age and other health factors, as well as psycho-social factors. Psycho-social factors may be the most elusive in terms of predicting claim cost because they tend to be subjective, intangible and not well documented in the data. However, another potentially powerful predictive cost factor is injury severity.

What is severity?
The concept of severity in Workers’ Compensation begs definition because it refers to claim cost. The term severity is defined in the dictionary as seriousness, gravity, significance, magnitude, acuteness, badness, or awfulness.

When the term severity is used, most people assume the discussion is the dollar cost of the claim. However, this discussion of injury severity, while it leads to total dollar cost of the claim, is about one very significant component of claim cost—injury severity. How serious is the physical injury?

Injury severity
Until now the best way to determine the severity of an injury was to ask the doctor. One of the three-point contacts initiated at the outset of an injury is the treating doctor. The interviewer wants to get a sense of how serious the injury is during that exchange. However, any response from physicians will be a subjective comment, making it useless for predictive purposes. Obtaining a standard measure of injury seriousness from responses of treating physicians is impossible.

Medical diagnoses
Physicians describe injuries and illnesses in terms of ICD-9 (International Classification of Diseases, 9th Revision [1]). In fact, ICD-9’s are the only acceptable norm for describing medical conditions in medical records and billing procedures. The problem is most adjusters in Workers’ Comp cannot interpret them. Even medical case managers cannot decode ICD-9’s without looking them up individually. Consequently these very powerful information nuggets have typically been ignored in medical management and for predicting cost. To complicate matters, physicians ascribe multiple IDC-9’s to a claim.

By way of describing the injury, physicians assign ICD-9’s initially and add to them throughout the course of the claim. ICD-9’s are required on the bill to describe the injury or illness and justify billing for medical procedures and services delivered. Nevertheless, the ICD-9’s in a claim often multiply and migrate over the course of the claim. New providers who become involved in treating the claimant add new ICD-9’s. Sometimes ICD-9’s are added because comorbidity is documented. Also, ICD-9’s may also be added to insure the bill will successfully navigate bill review. The reasons for adding ICD-9’s to the claim are many, which is reason enough to pay better attention to them.

The primary diagnosis?
People often ask, “How do I determine which ICD-9 is the primary ICD-9?” One answer is to note the date the ICD-9 is added. Those entered toward the beginning of the claim might be most revealing—but not necessarily. The diagnostic category might be more revealing. Do all the diagnoses relate to musculoskeletal conditions of the low back? In practice, doctors may select from eighty to one hundred different diagnoses to define low back injuries.

One diagnosis does not a story tell
In point of fact, identifying a primary diagnoses may not be important at all. Any one diagnosis must be taken in context with the others assigned to the claim. Several ICD-9’s might be used to describe strain of multiple related body regions. This still begs the question, how serious is the injury, but it also raises the question of what other information is living in the medical diagnoses?

Of course, one extremely severe diagnoses, such as a severed cervical spinal cord, should automatically kick the claim into the high risk class. On the other hand, while a low back strain by itself may seem benign, when it is combined with the fact that the claimant is over 65 years old or diabetic, or both, it also portends high risk. That same mild low back strain should be followed closely when the physician has also identified the claimant as obese. In other words, all diagnoses in the claim must be assessed in context with the other diagnoses present. Together they tell the whole story and can have an exponential effect on cost and outcome.

The MedMetrics solution
MedMetrics has solved this problem by assigning a severity (seriousness) score to individual diagnoses—the Injury Severity Score. Each diagnosis found in a bill is scored individually for severity. When a diagnosis is scored extremely severe, the organization is notified immediately. For multiple diagnoses, the accumulated diagnostic scores are totaled. If the composite score reaches a certain level, the organization is notified. Comorbidity and age are factored into the combined scores.

MedMetrics electronically monitors an organization’s bills, scores the diagnoses, and alerts its client of those diagnoses that are extremely serious. Additionally, the organization is notified when the accumulated diagnostic scores exceed a certain level. Claims adjusters and medical case managers can step ahead to manage the claim proactively.

Injury Severity Scores are a powerful, concurrent medical intelligence and management tool for claims adjusters and medical case managers. Moreover, Injury Severity Scores can be added to the available intelligence for setting and adjusting reserves. Finally, MedMetrics Injury Severity Score is a measure of bodily injury, an applicable intelligence tool for all personal injury claims!

Learn about other medical analytics tools that recharge managed care in Workers’ Compensation.

1 ICD-10 will be implemented in October, 2012.

Wednesday, September 14, 2011

How to Build an Outcome-based Network

Medical networks under scrutiny
Medical networks in Workers’ Compensation have come under scrutiny of late. Their effectiveness as a centerpiece of Workers’ Comp managed care is being questioned. For most networks, the most obvious problem is that their business model has not changed in twenty-five years while medical costs have continued to rise.

Medical networks in Workers’ Comp, whether they are PPO (Preferred Provider Organization), MCO (Managed Care Organization), HCO (Health Care Organization), MPN (Medical Provider Network) or the latest, EPO (Employer Provider Organization), are under the microscope. Employers and payers now realize that contracting with every provider and applying arbitrary discounts on units of medical services tend to inflate the frequency, duration, and cost of medical care. Rather than saving money for medical services, this practice may actually add to the cost.

Do discount networks work?
In reality, whether discounting units of medical service adds to, or curbs medical costs under the network discount method is unknown because networks have not provided information in that regard. Proof of actual performance does not exist. “Savings” reports supplied by the networks simply tally the discounts with no attention paid to total claim cost or outcome.

Instead, the strategy of discount networks is to contract with as many providers as possible, then measure success based on network utilization, penetration, and total discounts. More network utilization produces more discounts and reported “savings”. Moreover, the discount network strategy relies on the presumption of medical excellence and perfect moral integrity among providers, along with knowledge of the unique characteristics of Workers’ Comp.

Everyone knows the huge networks contain bad apples, usually more than a few. So employers and payers now want to open the curtain to see the moving parts being engineered by the wizard. They want proof of performance.

What employers and payers want
Most employers want the best physicians treating their injured employees at the best possible price. They want quick, convenient access to excellent medical treatment and the earliest possible safe return to work for injured employees. What’s more, they want the most efficient and cost-effective Workers’ Comp claim process. Importantly, they also want evidence of quality care.

Proof of performance through analytics
The missing ingredient for most traditional, discount-based medical networks is documented performance in terms of outcome. The only way to gain such knowledge is through data analysis (analytics). How do the doctors perform in the context of Workers’ comp and what are their outcomes, both in cost and in human terms?

Measuring quality
A physician was once overheard saying, “You can’t really measure medical quality.” That is not true. Quality can be measured in terms of medical performance using multiple criteria, all analytically calculable. What is the mean frequency and duration of medical care for treating certain injuries by an individual physician compared to others of the same specialty treating the same injuries? Other quality factors are equally measureable, such as return to work or sustained return to work. Actually, another way to define quality is best outcome of the claim and for the claimant.

Measuring outcome
In many ways, outcome and quality are the same things in Workers’ Comp. Frequency and duration of medical treatment are easily inflated by providers in networks where discounts are applied to units of service. If providers must discount services, the best way to recover those lost fees is to expand and extend services. Direct medical costs are key to measuring performance, but outcome (quality) is also definable in terms of lost time, return to work, and disability rating at claim closure, along with many other factors. All are influenced by the treating providers and all are measureable.

The new outcome-based networks
Medical provider networks are evolving to the new outcome-based model where providers are contracted based on actual performance derived from the analyzed data. Outcome-based networks offer transparency rather discounts. Some have also created new revenue structures that reward positive outcomes. These new networks carve out the best in class providers evidenced by the data. They provide a new and different business model and an objective basis for selecting network doctors.

An evolving industry
The industry is evolving to new outcome-based networks guided by the analytics of provider performance. Frankly, the Workers’ Comp industry has lagged behind other industries in leveraging their data to enlighten decisions. The new outcome-based networks change that. When the best in class make up a network, logic says outcomes improve.

Read more regarding Workers’ Comp medical provider networks and the analytics of medical provider and network performance.