This article was reprinted from:

PMA Insurance Group
November 2006 Directions
PDF versions of Directions at:
http://www.pmagroup.com/directions.htm
 

Managing Your Workers' Compensation Medical Costs

One of the key determinants of success for a workers' compensation insurance program is its ability to monitor and manage costs effectively. With the Centers for Medicare and Medicaid Services projecting national health spending to reach $2.2 trillion by the end of 2006 and to continue increasing at a pace faster than inflation, proven medical cost containment strategies are essential to successful approaches to workers' compensation.

More specifically, over the past several years, workers' compensation medical costs per claim have grown an estimated nine to 12 percent, according to the National Council on Compensation Insurance (NCCI). Much like the increases in overall health care spending, these increases can be attributed to a number of factors, with hospital and physician services routinely accounting for the largest share. At the same time, recent studies by Price Waterhouse Coopers have shown increased utilization of health care services to be the top contributor to increases in health care premiums. These cost factors along with a host of others are always front-of-mind at The PMA Insurance Group, and as the health care environment changes, we respond.

Medical costs per claim at PMA have increased an average of 9.4 percent over the past several years - at the low end of the national average. "We're working to help you stay ahead of medical inflation and rising health care costs by constantly enhancing our medical cost containment programs and adding new strategies," says Monica O'Neill, R.N., Senior Vice President of PMA Managed Care Services. "From our growing Preferred Provider Networks to our strong Return-to-Work Program, keeping an eye on the big picture of medical costs is part and parcel of our total commitment to you."

Medical Case Management

Our cost containment philosophy is embodied in our approach to case management. From the moment a claim occurs, our medical professionals get involved in cases needing their expertise to advocate an effective and efficient resolution for everyone. Most cases are handled in-house by registered nurses employed by PMA for their clinical experience and intricate knowledge of workers' compensation.

Because our own analyses show substantial cost reductions are possible when a claim is immediately reported and acted on, our case managers employ a three-point contact within 24 hours of receiving a claim. This not only ensures a timely commencement of the claims process, but also that all involved parties (employer, injured worker and medical provider) are on the same page from the start. Once the process is underway, our case managers work with our claims professionals to handle every facet of every claim individually. Ultimately, our approach includes cost-saving measures and a return-to-work focus that aims to get injured employees healthy and back to work as soon as medically possible. Solid communication throughout the process is the hallmark of our success.

Preferred Provider Network (PPN)

During the first three months following many common workers' compensation injuries, more than half of every dollar paid for medical treatment on a workers' compensation claim typically goes to office visits and physical therapy, according to the NCCI. Depending on the severity of the injury, more frequent office visits and physical therapy treatments can increase utilization and thereby drive up costs. Recent NCCI studies show that office visits are the top cost driver for acute and trauma-related injuries, while physical therapy is the top cost driver for chronic and complex injuries. As such, it pays dividends to have a proven Preferred Provider Network (PPN) on your side.

PMA's national PPN provides clients access to quality medical care at preferred rates through an established network of approximately 4,400 hospitals and over 320,000 medical providers. This means more convenient access to preferred providers for employees and greater cost protection for employers. The Workers' Compensation Research Institute estimates that employers can generally save 16 to 46 percent when injured workers are treated exclusively by network providers.

Physical Therapy Expert Provider Organization (EPO)

In 2006, in response to physical therapy accounting for a growing percentage of workers' compensation costs, PMA partnered with a Physical Therapy Expert Provider Organization (EPO) to help clients realize additional workers' compensation savings. MedRisk, one of the nation's leading physical therapy provider networks, proactively addresses utilization, and thereby costs, by controlling the number of services and length of treatments.

On top of our PPN and Physical Therapy EPO, we also offer Pharmacy Benefits Manage-ment programs and Out of Network programs to ensure that injured employees get the best care - even if they receive it outside of our PPN - at the best possible price for employers.

Medical Bill Review Team

PMA's Medical Bill Review Team is on track to save clients more than $1 million on medical bills this year. How? Medical bills can be difficult to decipher and sometimes contain inappropriate charges - and that's where our team of trained professionals steps in.

Within the first three to five days of receiving a medical bill, we scan it with our specialized software to detect any inaccurate or incomplete billing. If the software detects anything, our Medical Bill Review Team of in- house nurses and coding specialists reviews the bill to make certain the coding and medical documentation are accurate for the services billed. If inaccuracies are uncovered, the team adjusts the bill accordingly, which may realize greater savings over and above state fee schedule or usual and customary savings.

Despite a thorough review process, PMA also achieves efficiency in its medical bill paying process. A recent internal medical bill audit showed that PMA not only processes nearly 75 percent of its medical bills in 15 days or less (from receipt to check issuance), but that it also has a very low rate of resubmitted bills, which eliminates redundant and unnecessary medical bill review fees for clients. Quick turnaround on medical bills also translates into fewer bills going to injured workers and a more seamless process requiring less involvement from clients.

Medical cost containment at PMA is more than just another program - it's a way of doing business and a philosophy that we're extremely passionate about. We feel a complete and effective approach to workers' compensation means making exceptional medical services accessible to employees at a fair and realistic price to employers. That's our commitment to you. For complete information, refer to our website at www.pmagroup.com or request our Medical Cost Savings brochure from your local PMA representative.

Top Four Ways to Control Medical Costs according to Monica O'Neill, R.N., Senior Vice President of PMA Managed Care Services:

1. File timely claims reports, ideally on day one (but at the latest within the first three days of injury)
2. Refer injured workers to network providers
3. Keep lines of communication open with employees
4. Maintain a strong Return-to-Work program and designate a Return-to-Work Coordinator