Predicting
and measuring claim risk is an important effort in managing Workers’
Compensation claim costs. Huge sums of money are allotted to sophisticated predictive
modeling initiatives hoping to tag the claims that will be the most costly. Scores of
analytic professionals are put to the task and when high risk claims are
identified, additional resources are applied to mitigate impending damage. Yet,
one very powerful measure of claim risk remains virtually untapped and ignored
by the legions of analysts.
Diagnostic codes
Every
medical bill submitted for payment contains diagnostic information in the form
of standard codes. The codes, assigned by the treating physician, describe the
injury or illness that triggered the claim.
The
codes, ICD-9 codes, are intended to justify treatment rendered and the fees
charged. ICD-9’s codes are the International Classification of Diseases published by
the World Health Organization (WHO). On Workers’ Compensation bills, they can
tell us what the medical problem is.
Codes ignored
ICD-9 codes are part of the collected information from
the bill, however, they are not well understood or used in claim management. That
ICD-9 codes are ignored by claims professionals is perfectly reasonable.
ICD-9 codes on the claim are just codes. They do not
contain the description of the injury and there are thousands of them. Adjusters
do not have the time or inclination to search for code descriptions. Instead,
they rely on the NCCI classifications of type of injury, body part, and cause. Nevertheless,
neither ICD-9 codes nor NCCI classifications by themselves can define the
seriousness of the medical condition.
Coding the codes
To define injury severity, individual ICD-9 codes must be
graded for medical severity using a simple scoring methodology. For instance, multiple
codes are used by physicians to describe back injuries and they have very different severity
scores. A low back strain will not be scored as high for seriousness as a spinal
cord injury. Likewise, a fracture of the tibia in a healthy young adult will
have a lower severity total score than a fracture of a tibia of a 60 year old
who also has diabetes.
Multiple codes on
a claim
Rarely is only one ICD-9 code assigned to a claim. In
fact, when a claim is complex or when recovery is slow or compromised, multiple
ICD-9 codes accrue to the claim. Older claims involving many treatments over
time can literally contain pages of ICD-9 codes. Each time an injured worker is referred
to a new specialist, new codes are added.
Comorbidities
Comorbidities such as diabetes, heart disease, or obesity that add
complexity, delayed recovery, and cost to a claim can also be tracked through
ICD-9 codes. When the treating physician notes such a condition, the code will
be on the bill along with the injury codes. Treating physicians should be
encouraged to include comorbidity diagnostic codes because they impact recovery.
Migrating claims
Claim diagnostic scores accumulate as the claim
progresses. Total diagnostic scores are tallied and monitored by the computer
system. As claim diagnostic scores accrue, automatic alerts are sent when the
total reaches a pre-determined set point. Importantly, migrating claims can never go unnoticed!
Moving indicators
Claim
diagnostic scores are dynamic moving indicators of risk and exposure in a
claim. Electronic monitoring claim ICD-9’s continuously offers critical information
about current claim risk status. The claim diagnostic risk tally remains in the system
background, interfering with nothing and no one. However, when the set-point is
reached, an alert is sent to the appropriate person so that action can be
mobilized.
As new medical bills arrive and new diagnoses are
accrued, the diagnostic risk score for a claim mounts. While not the only
indicator of claim risk, diagnostic severity scoring is powerful, current information.
A high diagnostic severity score absolutely predicts high claim risk and cost.
Karen
Wolfe is the founder and President of MedMetrics, LLC, a Workers’
Compensation analytics company. MedMetrics offers online apps that super-charge
medical management by linking analytics to operations. MedMetrics apps include
Diagnostic Severity Predictive Scoring with Alerts. karenwolfe@medmetrics.org
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