Legacy Closures: What to Expect From Outside Experts
Managers already using outside attorneys and consultants to help with workers’ comp legacy claim closures and those considering retaining such assistance should understand what these experts bring to the table and how to use them effectively.
Even if your internal team has deep knowledge of your current claims, the objective and non-emotional assessment of an outside expert often can help move even the most difficult cases toward closure. In addition, their base knowledge on how to structure the overall process can help avoid obstacles or delays and achieve optimal results.
Workers’ comp claims closure initiatives typically begin with a review of your claims inventory. Open claims should be sorted based on such factors as:
• age of claim;
• past and projected claim cost;
• complexity, including the existence of comorbidities, such as obesity and diabetes, as well as use of opioids in treatment; and
Work with your internal team or engage consultants to review your inventory (stratified by incurred), and evaluate past and current closure results. Based on experience, outside experts can provide insights to help you to establish clear objectives for reducing open claims and overall costs within defined time periods.
In working with outside consultants and attorneys, consider the following practices that have helped drive performance:
Share financial details
Claims consultants and attorneys can develop and implement strategies to meet your objectives. However, by sharing financial information – albeit discretely – you help them establish priorities that are better aligned with those of your team. For example, you may want to share such information with the lead attorney contact at each law firm you engage so they can assign specific cases to achieve optimal results.
Be strategic in your selection process
Organizations with claims in multiple jurisdictions may be drawn to use a network of attorneys and consultants who offer local expertise. While this approach may have advantages in certain difficult jurisdictions, it generally poses management challenges. Many organizations with claims in multiple jurisdictions have reduced costs, improved and accelerated results by consolidating external resources and selecting law firms and other providers whose geographic footprint best matches their overall needs.
In cases where the performance of consultants and law firms on closure projects was underwhelming, the shortcomings often are traceable to consistent failures in the hiring process to fully vet the firms. So, taking the time to get references is well worth the effort.
Start with a pilot
Some organizations have been able to identify best practices and establish protocols for working effectively with outside providers by beginning any closure initiative with a pilot involving a few jurisdictions or a select number of complex claims.
Many consultants bring technology and advanced claims-tracking capabilities that capture all relevant information and provide scheduled and actionable reporting. This gives you the ability to constantly monitor results against objectives and make critical decisions along the way to maintain momentum and drive performance.
Maintain communication flow
Top-performing organizations have regular conference calls and phone discussions with all their providers.
As you track performance, share results with all members of your team — including both internal and external resources. Stay on top of progress and obstacles on difficult claims and understand what strategies are being used to address them.Be specific in your instructions or inquiries and hold providers and attorneys accountable for responding promptly and keeping you fully informed of all significant developments.
Don’t overlook other advantages of outside help
While not always anticipated at the outset of an engagement, other benefits from outside resources can include identification of opportunities to improve claim-legal processes, as well as to provide better legal panel guidance and enhance existing partnerships, all of which can translate to effective cost management and improved outcomes.
Outside consultants and attorneys offer extensive experience and specialized expertise that can help managers achieve and exceed their claim closure objectives. By selecting providers that best meet their needs, communicating effectively, tracking progress and sharing results, managers can receive the optimum benefits from these valuable relationships.
Reform Effects Causing Docs to Refuse Injured Workers
“I no longer take workers’ comp cases due to the impossibility of getting paid in a timely or appropriate manner without huge amounts of extra work,” a physician reportedly wrote. Another said “expenditures appear to have shifted from patient care to a cumbersome administrative system, involving 2-4 steps in different locations across state lines, for authorization.”
Both are comments cited in a survey from the California Medical Association. The association released the responses from 231 physician practices to the changes included in workers’ comp reform legislation signed into law September 2012.
“Significant changes to the utilization review process, implementation of an independent medical review and independent bill review process along with migration to a resource-based relative value scale payment system are some of the substantial changes to the California workers’ compensation system since the passage of SB 863,” said the survey. “Feedback from the CMA physician members thus far indicates significant challenges with the workers’ compensation reforms implemented.”
The survey was conducted over a two-week period. Questions addressed utilization review, independent medical review, independent bill review, and the resource-based relative value scale fee schedule.
More than two-thirds of the respondents cited problems with the UR process in getting authorization for patient care, and more than half of those cited “inappropriate denials” of tests, procedures, or services they deemed necessary.
“The process was always difficult but has become hideous in recent months,” according to one physician’s comment. “It has become a series of denials for even the most elementary medications or tests,” said another.
“I no longer take workers’ comp cases due to the impossibility of getting paid in a timely or appropriate manner without huge amounts of extra work.” — a California physician surveyed about the impact or workers’ comp reform bill SB 863.
The IMR process was also cited as a challenge with two-thirds saying it “has been unsuccessful in ensuring approval” of care they said is medically necessary. Slow responses to IMR requests and “inappropriate denials” of medically necessary actions were cited as the biggest challenges. One-third of physicians said opioids/pain management was the type of service most frequently denied by payers. Commenters said “prescription drugs of many kinds, not just opioids” were the type of service most frequently denied.
The independent bill review process was utilized by 30 percent of respondents with 32 percent saying they “had no idea it existed.” Among those familiar with it, nearly half — 46 percent — said it was “not at all successful” in addressing issues involving payment discrepancies. The $250 submission cost per issue to use the independent bill review was cited as “cost prohibitive” by 39 percent of respondents.
The main challenge cited from the new RBRVS fee schedule was “down-coding of claims resulting in underpayment,” according to 55 percent of respondents. One said “lack of payment for non face-to-face time, telephone calls, supplemental reports. It is a nightmare.”
Meanwhile, the state Commission on Health and Safety and Workers’ Compensation is calling for a reexamination of the system in light of the passage of S.B. 863. The commission was created by legislation in 1993 to examine the health and safety and workers’ comp systems and recommend administrative or legislative changes.
In its annual report, the commission specifically cited “medical care quality, accessibility, timeliness and cost” and “timeliness and cost of dispute resolution” as two areas the legislature and administration should address.
While S.B. 863 “incorporated many of CHSWC’s previous recommendations for statutory improvements” in the workers’ comp system, the commission recommended a thorough reexamination.
“Significant changes in the medical care process for injured workers have resulted from the reforms enacted in 2012. One of the changes is that medical necessity disputes are now resolved through an IMR process,” the report said. “IMR is administered by the Division of Workers’ Compensation Administrative Director and requires that an injured worker’s objection to a UR decision be resolved through IMR.”
The CHSWC called for an evaluation of the impact of the changes on an individual provision-by-provision basis and in combination. It also suggested evaluating the impact of the new provisions “on cost, quality and access of injured workers to appropriate and timely medical care” and to “identify issues and make recommendations for addressing areas of potential concern.”
What Is Insurance Innovation?
Truly innovative insurance solutions are delivered in real time, as the needs of businesses change and the nature of risk evolves.
Lexington Insurance exemplifies this approach to innovation. Creative products driven by speed to market are at the core of the insurer’s culture, reputation and strategic direction, according to Matthew Power, executive vice president and head of strategic development at Lexington, an AIG Company and the leading U.S.-based surplus lines insurer.
“The excess and surplus lines sector is in a growth mode due, in no small part, to the speed at which our insureds’ underlying business models are changing,” Power said. “Tomorrow’s winning companies are those being built upon true breakthrough innovation, with a strong focus on agility and speed to market.”
To boost its innovation potential, for example, Lexington has launched a new crowdsourcing strategy. The company’s “Innovation Boot Camps” bring people together from the U.S., Canada, Bermuda and London in a series of engagements focused on identifying potential waves of change and market needs on the coverage horizon.
“Employees work in teams to determine how insurance can play a vital role in increasing the success odds of new markets and customers,” Power said. “That means anticipating needs and quickly delivering programs to meet them.”
An example: Working in tandem with the AIG Science team – another collaboration focused on innovation – Lexington is looking to offer an advanced high-tech seating system in the truck cabs of some of its long-haul trucking customers. The goal is to reduce driver injury and fatigue-based accidents.
“Our professionals serving the healthcare market average more than twenty years of industry experience. That includes attorneys and clinicians combining in a defense-oriented claims approach and collaborating with insureds in this fast-moving market segment. At Lexington, our relentless focus on innovation enables us to take on the risk so our clients can take on the opportunities.”
— Matthew Power, Executive Vice President and Head of Regional Development, Lexington Insurance Company
Power explained that exciting growth areas such as robotics, nanotechnology and driverless cars, among others, require highly customized commercial insurance solutions that often can be delivered only by excess and surplus lines underwriters.
“Being non-admitted, our freedom of rate and form allows us to be nimble, and that’s very important to our clients,” he said. “We have an established track record of reacting quickly to trends and market needs.”
Lexington is a leading provider of personal lines coverage for the excess and surplus lines industry and, as Power explains, the company’s suite of product offerings has continued to evolve in the wake of changing customer needs. “Our personal lines team has developed a robust product offering that considers issues like sustainable building, energy efficiency, and cyber liability.”
Most recently the company launched Evacuation Response, a specialty coverage designed to reimburse Lexington personal lines customers for costs associated with government mandated evacuations. “These evacuation scenarios have becoming increasingly commonplace in the wake of recent extreme weather events, and this coverage protects insured families against the associated costs of transportation and temporary housing.
The company also has followed the emerging cap and trade legislation in California, which has created an active carbon trading market throughout the state. “Our new Carbon ODS product provides real property protection for sequestered ozone depleting substances, while our CarbonCover Design Confirm product insures those engineering firms actively verifying and valuing active trades.” Lexington has also begun to insure new Carbon Registries as they are established in markets across the country.
Lexington has also developed a number of new product offerings within the Healthcare space. The Affordable Care Act has brought an increased focus on the continuum of care and clinical patient safety. In response, Lexington has created special programs for a wide range of entities, as the fast-changing healthcare industry includes a range of specialized services, including home healthcare, imaging centers (X-ray, MRI, PET–CT scans), EMT/ambulances, medical laboratories, outpatient primary care/urgent care centers, ambulatory surgery centers and Medical rehabilitation facilities.
“The excess and surplus lines sector is in growth mode due, in no small part, to the speed at which our insureds’ underlying business models are changing,” Power said.
Apart from its coverage flexibility, Lexington offers this segment monthly webcasts, bi-monthly conference calls and newsletters on key risk issues and educational topics. It also provides on-site risk consultation (for qualifying accounts), access to RiskTool, Lexington’s web-based healthcare risk management and patient safety resource, and a technical staff consisting of more than 60 members dedicated solely to healthcare-related claims.
“Our professionals serving the healthcare market average more than twenty years of industry experience,” Power said. “That includes attorneys and clinicians combining in a defense-oriented claims approach and collaborating with insureds in this fast-moving market segment.”
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Lexington Insurance. The editorial staff of Risk & Insurance had no role in its preparation.