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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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Monday, January 28, 2013

How to Optimize the Nurse Case Management Advantage

A White Paper by Karen Wolfe

Traditionally in Workers’ Comp, nurse case management (NCM) services have been widely espoused, yet often misunderstood and underutilized. The reasons for underutilization are many, including claim ownership tension between NCM’s and claims adjusters. More significantly, is NCM difficulty in defining its work and measuring its value. The issue is not lost on the nurses themselves.

Last to computerize
Medical case management is last and least to computerize. NCM typically cannot attract adequate funding to create appropriate systems. When a process is poorly understood, designing a proper software system is impossible. Too often, computerization for NCM is confined to adding nurse notes to the claim system. Notes cannot be calculated or analyzed and outcomes cannot be measured based on nursing initiatives.

Recognized NCM value
Nevertheless, at long last, NCM value is now being recognized. American Airlines recently reported they are adding NCM’s to their medical management staff and will refer all lost time claims to them. They cite a pilot project where nurse interventions were documented and measured, proving their value in getting injured workers back to work. Additional NCM recognition has been published, as well.

Christopher Flatt, Workers’ Compensation Center of Excellence Leader for Marsh Inc., in an article written for WorkCompWire (http://www.workcompwire.com/) stated, “One option that employers should consider as part of an integrated approach to controlling workers’ compensation costs is formalized nurse case management.Taking actions to drive down medical expenses is an essential component to controlling workers’ compensation costs.”[1]

Formalized NCM process
While Mr. Flatt does not define “formalized” nurse case management, he goes on to say, “Nurse case management is considered a “best practice” in helping to direct treatment, manage medical costs, and reduce disability durations, by providing appropriate care and returning employees to work more quickly. Shorter claim durations and returning injured employees back to work have a direct correlation in reducing workers’ compensation costs”.[2] These are certainly the preferred outcomes, but how does the NCM program achieve them? What are the action steps? How is the process documented and measured for effectiveness? Importantly, how are the NCM initiatives standardized across the organization?

Part of the reason NCM is misunderstood is the lack of a formalized process. The services are delivered by individuals responding to a situation as presented to them or as they perceive it.

Referral criteria
Mr. Flatt continues with some concrete suggestions such as deciding what type of claims should automatically be assigned to the NCM and at what points for existing claims. He suggests predictive analytics can be used to make these decisions. However, a formalized and optimized NCM process can be made far simpler and less costly.

Industry research and individual wisdom
Industry research and wisdom gained through individual and organizational experience can supply the indicators for referral to NCM. For instance, one approach is leveraging the America Airlines experience and set the standard that all lost time claims are referred to NCM.

Another example is research shows comorbidities increase claim duration and cost. These cases should also be referred to NCM for oversight. Yet another example is inappropriate medical providers profoundly increase costs. NCM’s should have efficient electronic tools to direct care to the best in class providers.

The list of valid criteria for referral to NCM is potentially extensive.  Nevertheless, the question should be, how can these conditions be identified in claims as they occur and referred to NCM accurately and consistently?

Computer-aided medical management
As a long-ago nurse and a long time medical systems designer and developer, I believe the answer lies in appropriate computerized system design. To be effective, three components are necessary:

1.      Formalized Criteria for referral
Create electronic profiles containing combinations of data elements found in claims that represent the conditions for referral to NCM’s. For instance, when comorbidity ICD-9’s (diabetes, heart disease, obesity) are found in claims, an automatic referral is sent to NCM. This formalizes and enforces the processes consistently.

2.      Technology Powered
Continuously monitor historic and current integrated claim data. The integrated data should contain five years of history and be sourced from clams, bill review, and pharmacy (PBM).

3.      Referral Alert
The system automatically notifies the NCM when the conditions in a claim match that in a profile. This occurs at the beginning or any point during the claim because the data is continuously updated and monitored electronically in context with the criteria.

The process is simple, yet powerful. Moreover, using a computer-intensified medical management power tool offers even more to the process. All referrals to NCM, the reason for referral, and to whom they were sent is documented by the system, thereby creating a formalized audit trail. Organizational procedures or action steps can accompany the referrals, further formalizing and standardizing the process.

Measuring cost savings
When the system documents the process automatically, individual claim savings can be measured. For instance, directing care to a best practice provider, thereby avoiding a low scoring provider, is a cost savings guarantee. Industry research is used as a basis for estimating cost savings in each instance and since it is a computerized system, cumulative savings reports can be produced on demand to quantify the process.

Analytics inspired, technology powered Medical Management
The NCM advantage can be formalized and optimized with technology. Learn more about MedMetrics WC Medical Intelligence Profiles with Alerts and its other medical management power tools or contact KarenWolfe@medmetrics.org for further information.

[2] Ibid.

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.

Tuesday, January 8, 2013

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.

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