Workers' Comp

Managing Service Providers

Quality assurance audits help risk managers, insurers and TPAs counteract weaknesses in delivery of services.
By: | April 28, 2016 • 5 min read
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Uncovering inconsistencies in an insurer’s or third party administrator’s service performance can ultimately strengthen an employer’s partnerships with the organizations managing injured-worker claims.

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Advocates of independent reviews maintain that vendor management quality assurance audits conducted by independent reviewers can reveal weaknesses that impact an employer’s workers’ compensation program.

Yet other observers argue that independent quality assurance audits are becoming a thing of the past and their value diminishing.

Still, about 25 percent of self-insured employers and those with large deductibles seek the audits, said Dan Marshall, chief claims officer U.S. at Aon.

“It is only the most sophisticated buyers that want to look under the hood, so to speak, and get a gauge of the performance of claims service providers,” he said.

Insurers and third party administrators, meanwhile, employ their own teams to conduct highly structured quality assurance, or QA, reviews of their internal claims operations.

Jenny Killgore, VP, insurance services, Athenium Inc.

Jenny Killgore, VP, insurance services, Athenium Inc.

They test whether their employees adhere to internally mandated standards and whether their claims managers comply with negotiated service levels. They also evaluate the performance of external claims service providers.

“TPAs [and insurers] do a significant amount of internal quality assurance before a work product goes out,” said Jenny Killgore, VP of insurance services at Athenium Inc., which provides insurers with quality assurance systems for evaluating claims, underwriting processes and vendor-management practices.

Whether insurers and TPAs use internal resources or contract with outside companies for nurse case management, legal defense, MSA compliance, surveillance and other claims management services, QA reviews can reveal whether services are optimally deployed.

Reviews conducted by a TPA’s or insurer’s internal QA team also help those organizations strengthen their employee training programs and learn whether service inconsistencies exist among widely dispersed regional offices.

They also help retain customers as competitive market pressures and QA practices have pushed insurers and TPAs to improve their services over the years, several experts agreed.

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But an independent review can help reveal whether employers are indeed well served by the internal QA processes of the claims management organizations they contract with, said Jim Kremer, senior manager, insurance and actuarial advisory services at Ernst & Young LLP.

Independent reviews can help confirm that an employer’s claims-management instructions and service agreements are consistently met and whether the company’s dollars are wisely spent.

“Leading practice would be a focus on claims management quality overall, especially outcomes.” — Jim Kremer, senior manager, insurance and actuarial advisory services, Ernst & Young LLP

“You have standards that are in place at every carrier and third party administrator,” Kremer said. But, he asked, “Are those front-line adjusters, and frankly their supervisors, adhering to those standards?”

QA reviews can assess timely claim intervention, reserving, pharmacy management and medical data management, among others.  Audits should evaluate adherence to leading claims-management practices and impact on claims outcomes, Kremer said.

“Large employers have performance guarantees in place, hence requiring audits,” Kremer said. “Leading practice would be a focus on claims management quality overall, especially outcomes.”

An independent review might find, for example, that workloads unintentionally encourage a TPA’s adjusters to relinquish control of claim files to specialists more often than optimal. That can cause employers to pay for nurses or attorneys to complete tasks adjusters are capable of handling.

“There is a cost to that and you certainly don’t want to assign routine tasks that an adjuster should be doing to a nurse case manager or to an attorney,” Kremer said. “That is very expensive and produces what we call ‘expense leakage.’ We see it quite often when we are out auditing in the marketplace.”

Other common findings include inadequate supervision of adjusters and failures to optimally reserve for specific claims, brokers said.

Darrell Brown, chief claims officer, Sedgwick Claims Management Services

Darrell Brown, chief claims officer, Sedgwick Claims Management Services

One opportunity for improvement commonly found during Sedgwick Claims Management Services Inc.’s internal audits involves the inability of adjusters to connect with injured employees during attempted follow-up telephone calls, said Darrell Brown, Sedgwick’s chief claims officer.

Observers say that has become an industry-wide problem, especially with the increased use of cell phones.

That inability to connect slows claim management decisions and can result in the increased use of investigations when adjusters don’t receive responses to their queries or when claimants believe they are not being properly cared for, Brown said.

“You can’t have a good outcome if the injured employee is having a bad experience,” Brown said.

During the request for proposal process, when employers shop for new TPA partners, it’s common to ask to see results of the TPAs’ internal QA reviews, said Thomas Ryan, research leader for Marsh’s workers’ compensation center of excellence.

“Sometimes they will sanitize the results [of internal QA audits] and share those with us,” Ryan said. “Others are a little reluctant to do so. But they will at least give us some high-level findings.”

Once a TPA is selected, contract language provides employers with the ability to conduct audits.

Thing of the Past?

Not everyone agrees, however, on the value of QA audits.

Automated claims-handling systems with embedded quality assurance components make independent reviews less necessary today, said Jerry Poole, president and CEO of Acrometis, which provides automated adjuster desktops.

“The quality assurance audit will be a thing of the past,” Poole said.

He said that when making claims decisions, Acrometis’ adjuster systems conduct QA in real time, while audits provide a retrospective review.

Bill Zachry, group VP, risk management, Albertsons Safeway

Bill Zachry, group VP, risk management, Albertsons Safeway

Real-time QA provides beneficial data about certain adjuster tasks, such as whether specific claims actions are completed within certain timeframes, Kremer said.

But the systems still cannot sufficiently evaluate certain factors, like the intensity of a claim investigation, he said.

Internal risk management staff at Albertsons Safeway constantly monitor the performance of the TPAs servicing the grocery chain’s workers’ comp claims, and medical outcomes are continually measured, said Bill Zachry, group VP of risk management.

Yet Albertsons Safeway also obtains an independent audit every four or five years, Zachry added.

The Hartford, meanwhile, relies on an internal team, comprised mostly of nurses, to conduct evaluations of the business partners that provide workers’ comp services.

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Those services include utilization review, field nurse case management, vocational rehab, pharmacy benefit management, transportation, interpretation, physical therapy and medical provider networks.

QA evaluations are conducted before contracting with such partners, said Dr. Marcos Iglesias, VP and medical director for the insurer. Then each is trained on The Hartford’s QA expectations with follow-up audits. &

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.
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On-Demand Webinar

Insights Webinar – How Nurse Case Managers Add Value to Workers’ Compensation Claims

Learn the quantifiable benefits of adding a nurse to your WC claim and where they can have the biggest impact.
By: | March 17, 2016 • 2 min read

Presenters

Overview

Webinar Sponsor


Webinar Sponsor

Healthcare challenges continue to put pressure on claim costs and outcomes. Knowing when to apply the right resource to each claim can help your injured workers quickly return to work and lower your medical costs.

In this webinar, we’ll discuss the quantifiable benefits of adding a nurse to your claim and the science behind when they can have the biggest impact. By the end of this presentation, we’ll answer the following questions:

  • With medical costs constituting more than 60 percent of workers’ compensation claims expenses, does nurse case management actually help control costs or drive them higher?
  • What controls can be put in place to ensure the cost of nurse case managers doesn’t spike?
  • Which cases benefit the most from nurse case management?

Recording

Download a PDF slide deck of the presentation.




Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty, workers compensation and group benefits.
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Sponsored Content by CorVel

Advocacy: The Impact of Continuous Triage

Claims management is never stagnant. Utilizing a continuous triage model keeps injured employees on track to recovery.
By: | May 4, 2016 • 6 min read

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Introduction

In the world of workers’ compensation, timing is everything. Many studies have shown that the earlier a workplace incident or injury is acted upon, the more successful the results*. However, there is further evidence indicating there is even more of an impact seen when a claim is not only filed promptly, but also effective triage is conducted and management of the claim takes place consistently through closure.

Typically, every program incorporates a form of early intervention. But then what? While it is common knowledge that early claims reporting and medical treatment are the most critical parts of a claim, if left alone after management, an injured worker could – and often does – fall through the cracks.

All Claims Paths are Not Created Equal

Even with early intervention and the best intentions of the adjuster, things can still go wrong. What if we could follow one injury down two paths, resulting in two entirely different outcomes? This case study illustrates the difference between two claims management processes – one of proactive, continuous claims triage and one of inactivity after initial intervention – and the impact, or lack thereof, it can have on the outcome of a claim. By addressing all indicators, effective triage can drastically change the trajectory of a claim.

The Injury

While working at a factory, David, a 40-year-old employee, experienced sudden shoulder pain while lifting a heavy box. He reported the incident to his supervisor, who contacted their 24/7 triage call center to report the incident. After speaking with a triage nurse, the nurse recommended he go to an occupational medicine clinic for further evaluation, based on his self-reported symptoms of significant swelling, a lack of range of motion and a pain level described as greater than “8.”

The physician diagnosed David with a shoulder sprain and prescribed two weeks of rest, ice and prescription strength ibuprofen. He restricted David from any lifting over his head.

By all accounts, early intervention was working. Utilizing 24/7 nurse triage, there was no lag time between the incident and care. David received timely medical attention and had a treatment plan in place within one day.

But Wait…

A critical factor in any program is a return to work date, yet David was not given a return to work date from the physician at the occupational medicine clinic; therefore, no date was entered in the system.

One small, crucial detail needs just as much attention as when an incident is initially reported. What happens the third week of a claim is just as important as what happens on the day the injury occurs. Involvement with a claim must take place through claim closure and not just at initial triage.

The Same Old Story

After three weeks of physical therapy, no further medical interventions and a lack of communication from his adjuster, David returned to his physician complaining of continued pain. The physician encouraged him to continue physical therapy to improve his mobility and added an opioid prescription to help with his pain.

At home, with no return to work in sight, David became depressed and continued to experience pain in his shoulder. He scheduled an appointment with the physician months later, stating physical therapy was not helping. Since David’s pain had not subsided, the physician ordered an MRI, which came back negative, and wrote David a prescription for medication to manage his depression. The physician referred him to an orthopedic specialist and wrote him a new prescription for additional opioids to address his pain…

Costly medical interventions continued to accrue for the employer and the surmounting risk of the claim continued to go unmanaged. His claim was much more severe than anyone knew.

What if his injury had been managed?

A Model Example

Using a claims system that incorporated a predictive modeling rules engine, the adjuster was immediately prompted to retrieve a return to work date from the physician. Therefore, David’s file was flagged and submitted for a further level of nurse triage intervention and validation. A nurse contacted the physician and verified that there was no return to work date listed on the medical file because the physician’s initial assessment restricted David to no lifting.

As a result of these triage validations, further interventions were needed and a telephonic case manager was assigned to help coordinate care and pursue a proactive return to work plan. Working with the physical therapist and treating physician resulted in a change in David’s medication and a modified physical therapy regimen.

After a few weeks, David reported an improvement in his mobility and his pain level was a “3,” thus prompting the case manager’s request for a re-evaluation. After his assessment, the physician lifted the restriction, allowing David to lift 10 pounds overhead. With this revision, David was able to return to work at modified duty right away. Within six weeks he returned to full duty.

With access to all of the David’s data and a rules engine to keep adjusters on top of the claim, the medical interventions that were needed for his recovery were validated, therefore effectively managing his recovery by continuing to triage his claim. By coordinating care plans with the physician and the physical therapist, and involving a case manager early on, the active management of David’s claim enabled him to remain engaged in his recovery. There was no lapse in communication, treatment or activity.

CorVel’s Model

After 24/7 nurse triage is conducted and an injured worker receives initial care, CorVel’s claims system, CareMC, conducts continuous triage of all data points collected at claim inception and throughout the life of a claim utilizing its integrated rules engine. Predictive indicators send alerts to prompt the adjuster to take action when needed until the claim is closed ­– not just at the beginning of the claim.

This predictive modeling tool flags potentially complex claims with the risk for high exposure, marking claims that need intervention so that CorVel can assign appropriate resources to mitigate risk.

Claims triage is constant – that is the necessary model. Even on an adjuster’s best day, humans aren’t perfect. A rules engine helps flag things that people can miss. A combination of predictive systems and human intervention ensures claims management is never stagnant – that there is no lapse in communication, activity or treatment. With an advocacy team in the form of an adjuster empowered by a powerful rules engine and a case manager looking out for the best care, injured employees remain engaged in their recovery. By perpetuating patient advocacy, continuous triage reduces claim severity and improves claim outcomes, returning injured workers to the workforce and reducing payors’ risk.

*WCRI.

This article was produced by CorVel Corporation and not the Risk & Insurance® editorial team.



CorVel is a national provider of risk management solutions for employers, third party administrators, insurance companies and government agencies seeking to control costs and promote positive outcomes.
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