Technology is a double-edged sword for the workers’ compensation claims handler. On the positive side, technology greatly aids the sharing and viewing of claims-related documents, removing mountains of paper and offering swift interactions with internal and external resources. On the negative side, technology makes it easier for providers to flood claims handlers with complex bills and related communications to support attempts to maximize revenue.
All of this is happening in a complicated and provincial environment filled with varied deadline requirements and penalties by jurisdiction. Claims handlers increasingly need technology to reduce unnecessary manual involvement and support decisions that must be made quickly.
Rise of Hospital Systems
Increasing regulation and infrastructure requirements are making the smaller or individual-care provider an endangered species in health care. As state and national legislation make delivering care increasingly complicated, providers are banding together or joining health systems to diffuse the costs, strengthen pricing power, and increase economies of scale.
The consolidation trend is strong and expected to continue, according to a study by Navigant Consulting. In the past two decades, the number of hospitals joining larger health systems increased from 38 percent to 62 percent. These hospital systems also have been making large investments in IT and realizing the advantages that these improved systems bring for delivering care, capturing costs, and getting paid.
A 2012 survey conducted by Premier health care alliance asked more than 600 hospital C-suite executives about their anticipated capital spending. Results showed a jump in those reporting that they expect to make their largest capital investments in health care information technology, even though overall capital spending growth would remain unchanged.
Consolidations and capital investments mean that claims handlers increasingly will be dealing with large billing groups and sophisticated electronic billing systems designed to maximize provider revenue. These systems, which understand the intricacies of medical billing, will put additional pressure on claims handlers to scrutinize submissions for relatedness and appropriateness and to fend off facility fees and the like. As provider billing technology becomes more sophisticated, claims handlers also need to turn to technology for the tools and time to manage the claim, preserve the reserves, and get the employee back to work.
Strategy 1: Use technology to make complicated decisions simple and then automate them. No one needs to be reminded that a claims handler’s task is a difficult one. The typical workers’ comp claims handler manages an average of 130 open claims at a time. Each claim averages 20 provider submissions and three times that amount in related documentation. That’s a lot of information to process regardless of how it is delivered.
Outbound communications add to the workload with correspondence going to different sets of attorneys by claim and entire claims notes having to be collected, edited, and forwarded. All of these activities need to be managed under the watchful eye, and sometimes heavy hand, of the different governing bodies in each jurisdiction.
The bright spot in all of this is how technology can help. Standardization of forms and efforts to adopt electronic billing can result in more than a simple electronic scan of the incoming mail. Now systems can assess what was sent, match it to claim details, take the desired action, and document it.
The next step is for systems to dive into the details of content and convert them from a form into actionable information. This detailed, line-level digestion of incoming claims documents can provide the data necessary to make automated decisions that replicate steps that would be taken by savvy claims handlers. Tens of millions of claims documents show that upwards of 75 percent of bills can be reviewed by technology for relatedness and appropriateness and acted upon without any human intervention, according to analysis by Acrometis. This automation also ensures that the desired actions are taken consistently every time with a clear audit trail to explain why.
This detailed, line-level review and adjudication of incoming documents not only frees a claims handler to follow up on injured employees, close claims, and release reserves, but also it saves on costs. Catching and automatically returning incomplete, duplicate, or erroneous bills to the providers with explanations and without any adjuster intervention can translate into massive productivity gains. There are hard-dollar savings, as well.
The analysis also found that 81 percent of returned bills were never resubmitted. This means bills that previously might have been paid or, at a minimum, added to the claims handler’s workload, left the system altogether, all without any involvement on the part of the claims handler.
Some payers try to minimize the workload through a form of auto-adjudication that automatically approves bills under a certain dollar amount on a valid claim. This “blunt instrument” approach leaves considerable money on the table and, more importantly, can commit the payer to additional higher-cost treatments. In some jurisdictions, agreeing to pay for even a prescription can result in the payer accepting all responsibility for the claim. Also, important information could be overlooked by not examining small billing documents. For example in New York, approving payment for an office visit also means accepting the doctor’s proposed treatment, such as an MRI.
Let technology consume the data and perform the same rigorous scrutiny that is expected from claims handlers. Technology doesn’t care if there are 13,000 ICD-9 codes or 68,000 ICD-10 codes. Once the rules are loaded, all incoming bills can be reviewed automatically and acted upon without burdening the claims handler.
Strategy 2: Use technology to inform the claims handler and aid decision making. While technology offers significant help with straightforward items associated with the claim, there are many other ways it can help claims handlers. It has taken a long time for the buzz phrase “predictive analytics” to live up to its billing, but now technology can analyze incoming claims documents against historical data for that claim or situation and present information that makes the claims handler’s job easier and less prone to error.
Shorten claims handler ramp-up time when a decision is required. When the claims system identifies an incoming document that requires the claims handler’s attention, it should do more than just send an alert that a problem exists. Technology can identify exactly where the issue is, automatically retrieve the related documentation, and offer suggested resolution options. This allows the handler to get familiar with the claim quickly, and the system prompts help the handler make needed decisions or to know when to bring in additional expertise to keep the claim moving.
If outside help is required, technology needs to continue to support the process. This means making it easy to share a claim electronically with a supervisor or other stakeholders and connecting all incoming “white mail” with the appropriate claim.
Understanding the claims cost curve. Most work-related injuries occurring in a particular industry or classification follow a similar pattern. These trends can be loaded to create a “claims cost curve” against which the current claims costs can be reviewed. This slope can compare incoming costs by category against an average or threshold.
For example, physical therapy costs extending for greater durations than the norm for a particular type of injury can highlight problems with the claim, employee, provider, or both. Technology can’t provide the solution, but it can present the relevant information to the claims handler who can investigate further and, thanks to business-rules automation on the front end, has the time to do so.
Strategy 3: Look at the forest. Claims handlers are handicapped by the fact that they see only their own claims. Claims systems can see the entire forest of claims and can be programmed to identify issues and bring them to the attention of claims handlers. Traditionally, this notification might be an email citing items to watch when handling claims. Technology can leverage trends across the landscape of claims and use the information to alert claims handlers about potential issues that can affect future decisions, whether with the current claim or provider or across the entire operation.
These issues can range from abuses in the system by providers to poor outcome data from managed-care networks. Once trends are identified, a rule needs to be created in the system against which future claims documents will be compared. Once implemented, this rule would be consistently applied to future claims, removing the delays and costs associated with claims handler training and the variability of adherence to the policies.
Consistent policy execution is critically important for claims operations and too important to trust to claims handler training. Accepting responsibility for a treatment on one claim can leave you liable for that treatment on all similar submissions by that provider. As providers become more sophisticated in their billing practices, leveraging these inconsistencies will become a revenue opportunity for them and a minefield for the individual claims handlers.
In the arms race between medical billing technology and workers’ compensation claims technology, workers’ compensation is woefully behind.
That means workers’ comp needs to pull itself out of the dark ages of simply scanning documents to deploying sophisticated claims management technology. To compete with billing software, workers’ comp claims technology must be able to use business rules-driven claims automation to clear out bills that do not require human touch. It also needs to be able to run reports on the fly so adjusters can make decisions quickly enough to reduce future claims costs. Additionally, sophisticated systems need to pinpoint trends across a book of business, identify potential actions, and prompt claims handlers with suggested tactics to take when red flags occur.