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"For all the money invested in so-called medical management, and all the medical dollars paid out, it is incomprehensible that many large- and mid-tier payers are still just talking about solving this problem."

Paduda, principle of Health Strategy Associates and author of the Managed Care Matters blog, included the comments in a report summarizing a survey of executives on workers' comp bill review. The disconnect and the desire among workers' comp payers to pay the appropriate amount for occupational injuries is mentioned throughout the survey.

The questions gauged their opinions on the state of bill review and their thoughts for its future. Their opinions were compiled and where applicable compared to those from the 2009 survey.

Bill review is defined in the survey as the "process of repricing medical bills according to jurisdictional requirements and standards" often including "application of rules specific to that jurisdiction as well as fee schedules." The drive toward more efficiency, consistency, and better integration of bill processing with medical management and the overall claims handling functions were themes seen throughout the survey. Among the findings were:

• Types of systems used. Virtually all respondents said they use commercially available systems. That represents a change from the 2009 survey when some respondents reported using "home grown" systems. The respondents were generally split on whether internal or outsourced systems were preferable. The smaller payers and medical management firms leaned toward outsourcing while larger payers used internal systems. As one commenter was quoted as saying, "there are 250 work comp insurers and dozens of TPAs; each company needs to find a solution that meets their own needs."
• Responsibility. Claims departments were the general overseers of bill review with 13 respondents providing that answer. Nine executives said their bill review was housed in managed care. "This represents something of a change from 2009, when less than a fifth of respondents said BR was housed in managed care/medical management."
• Importance. Bill review is seen as "significantly more important" than other managed care services, according to the survey, ranking 4.5 on a scale of 1 to 5, with 5 being the most important. "This was a significant increase over 2009, when the consensus was BR was 'somewhat more important' than other medical management services." However, the report notes that the respondents are "intimately familiar" with the bill review process and that senior managers might not hold the same view.
• Overall performance. No single bill review vendor was identified as the best. "There were no ratings higher than a 3.4, with the average a 3.07 on the 1-5 scale (among respondents who knew of the specific vendor)."
• Industry consolidation. One question pertained to the effects of the recent consolidation of system providers and vendors. "Respondents were split on whether the consolidation among vendors was good or bad, with roughly a quarter each stating it was good or bad, and the remainder believing it was neither," the report says.

What payers want. Increased efficiency/lower operation expense and reduced medical costs were among the primary desires of respondents. Overall, paying the right amount for medical care was a concern.

The goal of increased efficiency was cited as the main reason payers have made any significant changes to their bill review operations/processes in the last two years or are planning changes this year. Several said they have expanded their business rules and automated more processes while others have consolidated vendors, and others have added more specialty vendors and expanded network offerings such as physical therapy and imaging.

Better cost-containment opportunities, increased client savings, or further reductions in certain bill types were descriptions of how respondents want their bill review systems and vendors to deliver lower medical costs. "Clearly payers are seeking more efficient BR processes delivering lower medical expenses with greater accuracy and less opportunity for error," the report says.

Data quality and the challenge of maintaining fee schedules, rules, turnaround times, and provider reimbursement information were cited by several respondents as the biggest problems in bill review. "For some this was a payment problem (making sure the right provider got paid on time)," the report says. "For others it was a concern that bad data fed into reporting systems would result in inaccurate reports, audits and assessments of provider performance."

Bill review firms and outsource vendors must develop applications that are "efficient, intuitive, intelligent" and allow access to "multiple managed care entities with minimal effort," Paduda wrote. "Payers are going to become more, not less, demanding seeking lower costs and better outcomes."

Read more at the WorkersComp Forum homepage.

November 1, 2012

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