Look at the Total Loss Costs (TLC), Not Just the Line-by-Line Items.
The best technique to control medical costs in workers’ compensation is a Total Loss Cost (TLC) approach. To be truly effective in controlling the medical cost of workers’ compensation, employers and insurers should not limit their medical cost containment efforts to only one or two areas. Employers and insurer should utilize as many medical cost containment strategies as possible in a fully integrated approach. All of the following medical cost containment strategies have been shown to save money for the employer or the insurer when a “TLC approach” is used.
When services are used appropriately, the overall total loss costs will be reduced. Employers must take a long term view rather than a line-by-line cost comparison. For example, a peer-to-peer review of a claim by an MD may cost $500 but only a board-certified doctor can determine that important medical records may be missing from the file and need to be obtained before an Independent Medical Examination (IME) will be useful. Without this, an opportunity for an effective IME will be lost, especially in states where an employer is entitled to only one IME every six months.
Top 14 Medical Cost Containment Strategies
- Nurse Triage services are used when injured employees contact a specially trained “triage” nurse at the time they are injured to determine what type of treatment is needed. The nurse will ask the employee medical questions about the injury then direct them to the appropriate treatment whether it is emergency care, to a clinic nearby or to home for self-care. If they recommend emergency or clinic care, they will identify several providers within the employer’s network for the employee to choose from. They employee can follow-up with the triage nurse if any questions arise. A triage program can reduce lost days by 40%.
- A Medical Provider Network is a group of doctors, hospitals and other medical providers with whom an insurer or a self-insured employer has prearranged for medical treatment for employees injured on the job. All employees incurring an injury are sent to the medical providers in the medical provider network. In California, this is called an MPN (Medical Provider Network). The medical treatment panel is posted by the employer in a conspicuous place where all employees will have ready access to it in the case of an injury. Some third party administrators (TPAs) and carriers have “expert” panels of doctors who have superior outcomes including:
- Fewer lost days
- Lower medical costs
- Lower litigation rates
These special networks should be considered as the first line of defense in your cost containment strategy.
- Nurse Case Management is the practice of having an experienced nurse case manager coordinate and manage the medical care received by the employee. This includes a nurse reviewing the medical condition, treatment and medication, and discussing progress and care with the employee by telephone. A field case manager is a nurse who meets with the employee and often attends the medical appointments with the employee. Senior nurse reviewers are available to review all new claims for appropriateness of medical services and assist in resolution of problematic claims and medical situations. This is a proactive model to expedite recovery of injured employees. Senior nurse reviewers identify obstacles to return to work early in the process and help overcome them. Complex nurse case management is a type of case management that works on difficult claims. It gets long-standing cases (that are not neglected) moved toward resolution.
- On-site Occupational Clinics staffed by a physician, an occupational health nurse practitioner or a physician assistant can provide on-site treatment for most injuries when they occur. For emergencies or serious injuries, the on-site clinic can make immediate medical arrangements. The on-site occupational clinic can also provide continuing medical care for most injuries that need further medical attention after the initial treatment. In addition to treating workers’ compensation injuries, the on-site occupational clinic can provide pre-employment and post-employment physical examinations, drug screening, audiograms, flu vaccinations, and a wide variety of health and wellness programs. An on-site clinic will lower disability benefits through the coordination of transitional duty and return to work programs within the employee’s physical limitations during the time an employee is recovering from an injury.
- Physical Therapy is the most efficient way to treat musculoskeletal injuries (a third of all workers’ compensation claims). When an employee’s limb or joint functioning is impaired, physical therapy will be used to develop, maintain or restore the employee’s normal body movements. Physical therapy is routinely provided in an out-patient clinic and is provided in accordance with the treating physician’s instructions. Physical therapy can also be provided in the on-site occupational clinic for additional savings. Make sure to choose a reputable physical therapy network.
- Rehabilitation Networks provide specialized care for the treatment of a disability from either serious injury or severe occupational illness. The rehabilitation process is administered by a team of specialists who provide the proper mixture of medical specialty services for the employee. The goal of a rehabilitation clinic is to stabilize the injured employee’s medical condition and to assist the employee to recover.
- Utilization Review is the independent confirmation of the need for a medical service. Utilization review includes precertification reviews before the medical care is provided, concurrent reviews while the employee is in the hospital or during on-going medical care, and retrospective reviews to verify the needs for the medical services already provided.
- Medical Treatment Guidelines are created to provide uniformity of medical care for specific types of injuries. New York, Texas, California, Colorado and other states have instituted state-mandated medical treatment guidelines for all workers’ compensation medical providers to follow. The medical treatment guidelines often state the criteria that must be met before specific tests and medical procedures can be performed. Private Medical Provider Networks often establish their own internal medical treatment guidelines for the physician’s within their network. There are medical treatment guidelines and medical payment guidelines so don’t be confused by the two. Find a company that specializes in guidelines.
- Medical Bill Reviews are normally done by companies that specialize in reviewing the medical bill to verify the accuracy of the medical bill diagnostic codes and medical bill charges. The medical bill charges are either compared to the state fee bill schedule or with what is reasonable and customary charges for the medical services provided. Medical bill reviews include both the audits of doctor bill and hospital bill auditing.
- Pharmacy Benefit Managers (PBM) are companies that specialize in managing and controlling the cost of medications prescribed for the employee. This includes both obtaining discounts on medications plus providing drug utilization reviews to prevent the excessive use of narcotics and other medications.
- Independent Medical Examinations occur when the employee is sent to another medical provider for a second opinion. Independent medical examinations are most often used when the employee’s medical recovery progress is slower than normal. Have an M.D. enhance or write the IME cover request after reviewing the medical records. In addition to adding specific medical inquiries to the letter, an MD will make sure all relevant medical records are in the file; if they are not, request any missing records. Companies can sometimes use OSHA and ADA statutes to obtain IME’s. This is a little known technique which you can learn about from one of the attorneys in our Workers’ Compensation Attorneys directory.
- Peer Review, or Peer-to-Peer, is the practice of sending the medical reports and diagnostic reports to another medical provider for a review of the medical information for the purpose of confirming the appropriateness and quality of the medical care being provided. Sometimes peer-to-peer review also identifies prescription medication abuse.
- Durable Medical Equipment companies provide the medical equipment for the employee to use in their home. This includes everything from hospital beds, to canes, to artificial limbs, to oxygen tents. While the employee can obtain most of these items on their own, insurers and employers working with the durable medical equipment companies can obtain this type of equipment at a significant cost savings.
- Chronic Pain Management is a major expense and a devastating experience for injured employees who live with pain every day. Board certified physicians and nurses make virtual “rounds” to identify and evaluate biopsychosocial influences of the problem and create a comprehensive treatment plan for each individual. Data mining can help identify claimants with chronic pain problems.
Remember, when evaluating services and designing your program, evaluate the total loss costs, NOT just the bottom line of each service. A good TPA can provide most of these services under one umbrella, but if there are a few they lack, those can be purchased unbundled.