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

---

[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.

Data is Your Weapon of Choice

by Karen Wolfe

Managing the medical portion of Workers’ Compensation claims can be daunting. The variables are endless. Vendors of all types, extraneous and overlapping events, and even participant attitudes can impact the cost equation. Moreover, injured employee recovery lies in the balance, making the effort essential.

Longstanding methods

Current managed care initiatives have long been in play. They include bill review, utilization review, discounted medical provider networks, medical case management, fee schedules, guidelines, and peer review. That should do the job, but apparently not.

The medical portion of claims continues to rise while its portion of overall case cost is also increasing in most states. Medical costs are 60% of case costs, yet in some states, it is approaching 70%. 

The ‘tried and true” methodologies have been in place in Workers’ Compensation for about twenty-five years. Basically, the industry is continuing to follow the same pathways while hoping for different outcomes. Enough said.

Save the baby

This is not to say we should scuttle the strategies in place. Instead, the focus should be on updating and intensifying the existing processes to achieve their intended results.

Workers’ Compensation is an industry replete with transactions that are recorded digitally. First reports of injury, bill review, pharmacy benefit programs, and claims system paying bills and documenting events, all continually contributing to the data mass for each claim. Effectively analyzing that data on a concurrent basis and making the business knowledge available to claims adjusters and other decision makers is a powerful approach to strengthening current systems.

Data is your weapon

Analyzing data and converting it to useful information is the key to enhancing current medical management techniques. Writing reports and analyzing trends cannot impact outcomes. Such measures focus on the past that cannot be changed. Data must be utilized in new ways.

The first prerequisite is getting data-derived information to the front lines quickly. The business units should have access to analyzed information as concurrently as possible. Early information sets the scene for early intervention and resolving problematic situations in claims before they spin out of control.

Continuous data monitoring

Distributing information continuously requires that the data be electronically monitored and analyzed continually, not at the end of the month or quarter. When conditions that portend risk occur, the appropriate person is automatically notified. That might be the claims adjustor, medical case manager, medical director, supervisor, or manager. Importantly, the notified person will follow the organization’s approved procedures, thereby lending structure to the process.

Monitoring data and notifying the right people when indicators in claims point to risk mobilizes proactive medical management. Refer to the article, Early intervention drives better outcomes, but is not really pursued.

Other unique data initiatives can be even more compelling.

Select the best to improve networks

Research in the industry irrefutably shows poorly performing medical providers lead to high cost and poor results. Poorly performing doctors in the Workers’ Compensation context are those who have little understanding of the system or deliberately abuse the system through overutilization. Indicators of such poor performance are readily found in the data.

The data will reveal the poor performers, those who ignore basic Workers’ Compensation needs such as early return to work, as well as those who bleed the system with excessive treatment practices.

Treating doctors essentially cause, influence, or control the significant portion of medical costs. Once the injured worker is in the doctor’s care, opportunities to steer the course with medical management methods nearly disappear. Consequently choosing the right physician at the start is essential.

Directing care

Using data analysis to select the best practice doctors is the way to prevent problems and smoothly lead to the most optimal outcome. In many states this is possible and encouraged. In other states directing care is not allowed. Nevertheless, non-traditional applications of analytics can optimize results.

Behavior modification

When directing care to the best doctors is not possible, the next best option is to change the perpetrating doctors themselves. The fact is, people, and maybe especially doctors, do not like to look bad. Presenting them with analytic representations of their performance compared to others of the same specialty in the state is a powerful behavior change methodology. Those who are outliers will begin to move toward the mean.

Changing medical provider performance is not impossible! When they see themselves graphically compared to others based on the data, the information is indisputable. Of course, they will first attempt to push back. One way they argue is to say they treat only the more serious cases. That could be true.

Pièce de résistance

However, the pièce de résistance is to correct for medical severity in performance analytics, thereby leveling the playing field. Those who treat more serious injuries as evidenced in the data are compared only to others who treat similarly difficult cases.

Adjusting for case risk or severity by diagnosis is how to diminish resistance for poorly performing treating physicians. Graphic presentations of comparative performance cannot be disputed. The fairness is built in.

As the treating provider outliers move toward the performance mean, they may never achieve best-in-class, but their outcomes will gradually improve. They will also be aware of continued surveillance so the impact persists. Positioning data in this way is your weapon of choice for a powerful, yet bloodless medical management solution.

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. karenwolfe@medmetrics.org

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

How to Manage Medical Providers in Workers' Comp

By Karen Wolfe

Medical providers and payers Workers’ Comp have long been at odds. Looking for reasons leads to speculation about discrepancies in points of view regarding injuries and appropriate medical treatment, providers who are resistant or oblivious to Workers’ Comp issues such as return to work, and the reimbursement tug-of-war.

Solutions

Solutions aimed at controlling treatment and costs by limiting payment have been implemented. Fee schedules enforced by individual state laws and CMS (Centers for Medicare and Medicaid Services) are designed to manage the cost of treatment. Additionally, bill review services enforce the scheduled rates with recommend pay. Importantly, these solutions do not manage treatment practices and processes.

Employers attempt to control the situation by engaging providers in their production processes. A plant walk-through is encouraged. Some advise taking medical doctors to lunch. On the other side of the same coin, medical providers attempting to lure business often ply claims adjusters and employers with gifts or treats. It all begs for a more scientific approach.

The power of observation

Fact: Subjects, when they know they are being observed, change their behavior for the positive. Research has proven the point repeatedly.

Hawthorne effect

Recall the “Hawthorne Effect”. One definition is, “A term referring to the tendency to work harder and perform better when they are participants in an experiment. Individuals may change their behavior due to the attention they are receiving from researchers rather than because of any manipulation of independent variables.[1]

Sentinel effect

Another concept used to describe managing behavior through observation is known as the sentinel effect. Strictly speaking a sentinel is defined as "a soldier stationed as a guard, either to challenge persons drawing near and to allow to pass only those who give a watchword, and, in the absence of this, to resist them and give an alarm." Applied to managed care, it is observing and reporting behavior, particularly in medical service utilization.[2]

Quantum physics

Taking the idea a step further, even in the “nano” world of molecular cell biology, the effects of observation have been scientifically measured. When cells are observed they seem to “know” they are being observed and they change form. While citing quantum physics might be pushing the limits of this argument, the concept of changing behavior through observation is supported.

Observing medical providers

The point is if medical providers are observed objectively, consistently, and concurrently, and if they know they are being observed by means of information feedback, their treatment behavior will change. Medical providers can be observed objectively, consistently, and concurrently through data monitoring.

Applying the metrics

Observing behavior through data monitoring is the first step. Analytics must be applied to the data so that the performance of individual providers, clinics, and facilities are compared objectively and fairly. They must be compared “apples to apples” meaning providers should be compared to those with similar specialties, treating similar injuries in the same state. 

Sharing the results

The way providers know they are being observed is through information feedback. Show them how they compare to others like them with objective reports. No such guideline has been available to them previously and many have no knowledge or evidence they are outliers. When lunching with providers review their comparative analyses. It is a platform for education and change.

All medical providers are just people or groups of people. None of them wants to show poorly in a graphic presentation of comparative performance. Professional pride, personal ego, and simple business economics will drive the desired results.

Use technology to observe, analyze, and report provider performance. Select only the best practice providers whenever possible to avoid claim cost and complexity.

---

[1] http://psychology.about.com/od/hindex/g/def_hawthorn.htm or Google Hawthorne Effect.

 

[2] http://www.managedcaremag.com/archives/0601/0601.preauthorization.html  or Google Sentinel Effect.

 

---