Do Your Homework
My years reviewing claims files drives me to the following conclusion: unless the employer is prepared, they’re wasting their time sitting through a workers’ comp file review.
While it seems like common sense, you’d be surprised how many employers don’t do their pre-work. Many times I’ve seen an employer sitting in the meeting nodding approvingly while the examiner provides a lackluster or imprecise update.
The employers – not being experts nor adequately prepared – don’t know the difference. And because they allowed themselves to be bamboozled, the file review is basically for naught.
I’m not saying file reviews are total rubbish. The mere fact that you requested the file review shows you are at least interested and will motivate the examiners to update their files.
But a file review will only scratch the surface. You might as well rename the file review, “Tell-me-what- you-want-me-to-know-in-3-minutes-or-less.”
I always advocate for an actual file audit on occasion to supplement your quarterly file reviews on all high value/high exposure cases. When it comes to a file audit, there’s no place to hide. Stone after stone will be unturned, so no doubt will remain as to whether the file was handled properly.
Often what the examiner tells you – and what the file ultimately reveals – are completely different. This isn’t a way to “catch” the examiner slacking, but rather to find out if your money is well-spent on that particular examiner, or more importantly, on that third-party administrator or insurance carrier.
I always advocate for an actual file audit on occasion to supplement your quarterly file reviews on all high value/high exposure cases.
So what constitutes “pre-work?”
It all boils down to how much you know about the injured worker. Do you know his diagnosis and the effectiveness of the treatment regime? The treating physician? What’s the return-to-work situation? Claimant attorney? Employee’s work history? Personnel history? Medical history?
Did the examiner establish a plan of action and stick to it? Did he share that plan with you prior to the review? Most importantly, did the examiner continually move forward in regards to file management and expedition to closure?
Some employers would say, “why would I need to know all that when the file review will tell me everything I need to know?” If that’s the case, I’d suggest you go back and read the first paragraph. An employer can’t be an active participant if they don’t know what they’re dealing with.
You must also remember you’re most likely sharing the examiner with several other employers, and the examiner only has so many hours in a day. His/her time will be focused on the employers who either squawk the most, or (and this is crucial) closely follow their files.
Disinterested employers will always fall to the wayside. And, yes, it will take time to keep up to speed on the claims. But it’ll pay dividends when it’s time for the file review because you’ll be a functioning part of the decision-making.
So be interested. Be involved. And do you pre-work. If you’re not prepared, it’s pretty easy for an examiner to gloss over prior missteps.
Beware of Emerging Medical Cost Drivers in Workers’ Comp
One consequence of the Affordable Care Act is the increased billing pressure applied to the workers’ comp industry. Searching to replace revenues lost in primary care, new treatment trends will reveal themselves in the comp world at an ever increasing pace. It is critical that payers have strategies in place to support claims professionals in their efforts to combat these emerging cost drivers.
An example is surgical implants. While still rare enough to befuddle a claims process, these procedures are expensive enough to have serious implications for medical losses. But medical devices are no different than the other cost drivers that came before (physician dispensing, compounding, etc.) nor the ones that will most certainly follow. These “hot-buttons” highlight the need for people and processes to be ready to respond quickly and consistently to whatever the next challenge brings.
New Treatments Mean New Jurisdictional Differences
One issue that surgical implants highlight is the vast difference in the way each jurisdiction allows payers to deal with reimbursement.
Up until recently, California allowed payers to be billed once for the procedure, at a 120 percent reimbursement rate, and billed again for the hardware or material used. In 2010, before the double-billing loophole was closed, total payments for implant device procedures totaled $67.5 million in California. A study from the Minnesota Department of Labor & Industry in 2013 found that hospitals marked up the cost of implants by 200 percent, in one case up to 500 percent. These variations arise as providers work to maximize revenue and regulators have yet to determine what is reasonable.
Jurisdictional variations create a “wild-west” approach that claims professionals have to deal with when determining what should be allowed and what should be investigated further. This creates incredible pressure for claims professionals and payers who have to determine next steps for this bill while under a jurisdictional time clock and then find ways to adjust the process for the rest of the claims professionals. More often than not, this process is too much for one claims adjuster to handle on top of their other responsibilities, and thousands of dollars can be lost as a result.
New Treatments Mean New Complexities
One complicating aspect of surgical implants is the use of “kits”. These kits contain all the components associated with a surgical implant, but not all of these components might be used in a specific surgery. Careful scrutiny of the notes is required to determine if it was appropriate to be charged for the entire kit. With components costing thousands of dollars each, there can be significant savings to be had.
These kits are simply another example of ways to potentially hide costs or increase billing opportunities.
As new treatments come to market, it is critical that payers arm their claims professionals with the training, tools and support needed to handle these new complex treatments when they arise.
A Dreaming Team
Chris Thorn is known as one of the most creative risk managers in the business. After all, his risk management program hit the cover of Risk & Insurance® in March, 2012.
Now the senior manager, payments and risk, for Southwest Airlines is working with Riskonnect, a technology partner that he thinks can take his program to new heights.
“For us, it’s a platform that gives you so many different tools that if you can dream it, you can build it,” said Thorn.
Thorn ditched his legacy risk management information system in 2012 and started working with Riskonnect, initially using the platform solely for liability claims management.
But the system’s “do-it-yourself” accessibility almost immediately caught the eye of Thorn’s colleagues managing safety risk and workers’ compensation.
“They were seeking a software solution at the time and said, ‘Hey, we want to join the party,” Thorn recalls of his friends in safety and workers’ compensation.
“For us, it’s a platform that gives you so many different tools that if you can dream it, you can build it.”
–Chris Thorn, senior manager, payments and risk, Southwest Airlines
What was making Thorn’s colleagues so jealous was the system’s “smart question” process which allows any supervisor in the company to enter a claim, while at the same time freeing those supervisors from being claims adjusters.
The Riskonnect platform asks questions that direct the claim to the appropriate category without the supervisor having to take on the burden of performing that triage.
“They love it because all of the redundant questions are gone,” Thorn said.
The added beauty of the system, Thorn said, is that allows carriers and TPAs to work right alongside the Southwest team in claims files while maintaining rock-solid cyber security.
“This has sped up the process,” Thorn said.
“Any time you can speed up the process, the more success you’re going to have when you make offers to settle claims,” he said.
Since that initial splash in claims management, the Riskonnect platform has gone on to become a rock star at Southwest in a number of other areas. And as Thorn suggests, the possibilities of the system are limited only by the user’s imagination.
With a little creativity and help from Riskonnect as needed, a risk manager can add on system capabilities without having to go on bended knee to his own information technology department.
In the area of insurance policy management, for example, the Riskonnect platform as built by Thorn now holds data on all property values and exposures that can in turn be downloaded for use by underwriters.
Every time Southwest buys a new airplane, the enterprise platform sends out a notice to the airlines insurance broker, who in turn notifies the 16 or 17 carriers that are on the hull program.
Again, in that “anything’s possible” vein, the system has the capability of notifying the carriers, directly, a tool Thorn said he’s flirting with.
“It is capable of doing that,” he said.
“We’re testing out this functionality before we turn on it loose directly to the insurance companies.”
In alignment with the platform’s muscle in documenting, storing and reporting liability and property exposures, the system monitors and reports on insurance carrier financial strength.
If a rating agency downgrades a Southwest program carrier’s financial strength, for example, the system “pings” Thorn and his colleagues.
“Not only will we know about it, but we will also know all programs, present and past that they participated on, what the open reserves are for those policy years and policies,” Thorn said.
“That gives us even more comfort that we have good, solid financial backing of the insurance policies that are protecting us,” Thorn said.
Like many of us, Chris Thorn didn’t set out to work in risk management and insurance. Thorn is a Certified Public Accountant, and it’s that background that allows him to take creative advantage of the Riskonnect platform’s malleability in yet another way.
With the help of the Riskonnect customer service team, Thorn added a function to the platform that allows him to calculate the cost of insurance policies on a monthly basis, enter them into a general ledger and send them over to his colleagues in accounting.
“It’s very robust on handling financial information, date information, or anything with that much granularity,” Thorn said.
The sky is the limit
Thorn and Southwest are only two years into their relationship with Riskonnect and there are a number of places Thorn thinks the platform can take him that have yet to be explored, but certainly will be.
“It’s basically a repository of anything that’s risk-related, it continues to grow,” Thorn said.
“This has sped up the process. Any time you can speed up the process, the more success you’re going to have when you make offers to settle claims.”
–Chris Thorn, senior manager, payments and risk, Southwest Airlines
Not only have Southwest’s safety and workers’ compensation managers joined Thorn in his work with Riskonnect, business continuity has come knocking as well.
Thorn met in July with members of Southwest Airline’s business continuity team, which has a whole host of concerns, ranging from pandemics to cyber-attacks that it needs help in documenting the exposures and resiliency options for.
That Enterprise Risk Management approach will in the future also involve the system’s capability to provide risk alerts, telling Thorn and his team for example, that a hurricane or fast moving wildfire is threatening one of the company’s facilities.
Supply chain resiliency and managing certificates of insurance for foreign vendors are other areas where Thorn and his team plan to put the Riskonnect platform to good use.
“That’s all stuff that’s being worked on by us,” Thorn said.
“They’ve given us the tools, but we’re trying to develop how we’re going to use it,” he said.