By MICHAEL DEMATTEI, FCSA, MAAA, a principal and consulting actuary with the Los Angeles office of Milliman
The O'Brien form is named after its chief champion, David W. O'Brien, a retired administrative law judge for the California Workers' Compensation Appeals Board. O'Brien is still a strong advocate for reform of the system. Presently, he is of counsel in Southern California for the workers' compensation defense firm of Floyd, Skeren & Kelly.
Judge O'Brien's form is essentially the same as the monthly, nontechnical Explanation of Benefits form that Medicare and MediCal use.
"Why don't we learn from their experiences, and let the injured worker know when we pay a benefit of a medical nature to a medical provider?" O'Brien said.
He pointed out that when MediCal followed Medicare's example of informing the beneficiary of services billed and paid for, it saved many millions of dollars.
"(At present) the injured worker is informed about every benefit that the insurance company or self-insured employer provides in workers' compensation, except for the medical provider," he said.
TO FIGHT FRAUD
There are several kinds of common workers' compensation fraud, including claims mills (fraud rings), premium fraud, employer fraud and applicant fraud. O'Brien's proposal addresses primarily provider fraud: deceptive billing to maximize payments, regardless of the legitimacy of the original claim. (Provider fraud may also include rendering unnecessary treatment.)
Deputy District Attorney Albert H. MacKenzie, who developed the Los Angeles County District Attorneys Fraud Interdiction Program, has been working for years to uncover and prosecute healthcare insurance fraud. He fully backs adoption of the O'Brien form, and not only for California. He has reached out to district attorneys in other states; they, too, are frustrated.
MacKenzie labeled the current system "an invitation to steal."
O'Brien agreed. "I'm talking about everybody in the system," he said. "I'm talking about attorneys, not just medical advisors. I'm talking about claims adjusters. I'm talking about claims managers. If they are sophisticated, they've known for years that there's a loophole here."
REACTION TO THE FORM
In August 2007, the Employers' Fraud Task Force rolled out a draft of O'Brien's form to get the impressions of the industry. The EFTF is a private agency based in California that has been fighting workers' compensation fraud for 10 years. Its members consist of a group of large, self-insured companies including Disney, Safeway and Warner Brothers. Reactions from EFTF members on the O'Brien form were very positive.
Laura Clifford, the EFTF's founder and executive director, noted that modern technology makes identity theft frighteningly easy.
"Because the criminals know this, they can buy a list of injured workers from some unscrupulous clinic employee. Then they can use this list to bill millions of dollars under the radar because the injured worker never sees the bill. The National Insurance Crime Bureau has told us that workers' comp is the biggest target for fraud because there is no EOB. They say the O'Brien form is a brilliant idea that is long overdue," she said.
Clifford added: "It's just logical that the patient is the first line of defense in fighting fraud. So if they can see the bill, they can identify if there are any errors. They're not looking at it as necessarily a way to fight fraud. They're not looking at it as anything that's criminal in the bill. But they're certainly willing to look for errors and make those reports wherever necessary.
"We don't expect everybody to respond. But what if 10 percent respond? That would be tremendous," she said.
Still, the O'Brien form faces some resistance. Exactly how much is unclear.
For instance, the California Society of Industrial Medicine and Surgery, a group of doctors who specialize in handling industrial-injury cases, appears to not like the idea. O'Brien, who is a member of "Friends of CSIM"--a group of attorneys, nurses, physical therapists, clinic administrators, occupational therapists, adjusters and others interested in the society--is not sure how deep that opposition is.
Some insurance companies seem to be opposed to the judge's proposal as well.
"I don't think any insurer I've heard of has flatly said, 'No, we don't like the idea,' " said O'Brien. "They just hold back ... why, I don't know."
He suggested one potential reason for resistance: "They say, 'Another form? We've got enough forms!' But this is a very vital form, in my opinion."
As for employers, again, enthusiasm seems to be there. Laura Clifford said, "There are a number of companies that are willing to step up to the plate and say, 'We're ready to go.' This is something that just makes sense; it's easy to do."
Besides being a deterrent to crime, the O'Brien form has a second benefit. It could make workers aware (and possibly appreciative) of just how much money their employers are spending on their behalf to cure or relieve the effects of an on-the-job injury.
February 4, 2009
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