Note – The public version of the First Annual Survey of Workers Compensation Bill Review will be released Friday. If you would like a copy, do NOT comment here, but send an email to infoATHealthStrategyAssocDOTcom.
I’m finishing up the survey report, need a break from analysis and writing – and some of the results are just too interesting to keep to myself till Friday. (I know, I need to get a life)
One of the less-obvious but more-interesting findings is the way the market’s perceptions about bill review firms have shifted of late. The industry has seen a lot of change at a rapid pace, with Mitchell’s acquisition of SmartAdviser, Coventry’s acquisition and ownership of the code for their bill review system, new management at Medata, CS Stars’ announced departure from the business, the purchase of Stratacare, and Ingenix’ troubles with UCR.
All of these events/transactions have influenced respondents’ views of the industry, and certainly of individual vendors within the industry. Some have risen in stature, while others have declined, and the changes aren’t necessarily what one would think.
One of the last questions in the survey asks respondents to rate each firm on a scale of 1-5, with 5 being best/highest. While respondents’ views of the various BR firms tend to lump them in a fairly narrow band, their statements paint a more complex and more nuanced view.
Couple the individual BR firm ratings with the responses to another question “is the bill review industry meeting payers’ needs?” and the picture that emerges is of an industry that is viewed in general as mediocre, focused more on processing speed and throughput than effective medical management (yes, bill review does have a lot to do with med management), and more reactive than innovative.
Among the vendors reviewed there are a couple notable exceptions, and it is important to note these views are general: depending on the payer’s market, technical abilities, business model, and strategic orientation, one or more vendors may be a great fit. The ‘fit determination’ process is key to successful vendor selection, and according to several respondents that had recently gone through the RFP process, requires much more interaction, discussion, and sharing of information on the part of the payer than they had anticipated. Instead of the typical RFI-RFP-finalists selection-onsite presentations-reference checking/offsite visits-battle over pricing and terms-contracting process, to a person these respondents talked about the need to engage much more deeply with potential bill review vendors than they had anticipated. In some cases this was acceptable to management, but in others a more rigid process prevailed, resulting in (in a couple cases) a less than optimal outcome.

We’ve completed the First Annual Workers Comp Bill Review Survey and there are several highlights worthy of mention. (If you’ve requested a copy of the results you will receive it by the end of next week)
Bill review is considered significantly ‘more important’ than other managed care services by survey respondents (TPAs, carriers, managed care firms, and self-insured employers). While this isn’t consistent across all respondents, most are of the opinion that bill review is where the proverbial rubber/road meeting occurs, and if UR or PPO determinations don’t show up in bill review, they are irrelevant.
Which leads to the next finding – most of the more sophisticated respondents are very, very cognizant of – and frustrated by – the difficulties inherent in integrating BR and other medical management systems, platforms, and vendors. There is a sense that not all UR determinations (numbers of visits for PT, hospital stay duration, epidural steroid injections) appear in the final payments, with many unauthorized services actually performed, billed, and paid.
(note – this is consistent with the result of some, but not all, audits of client data performed by HSA)
Respondents decried the lack of understanding of the complexities of bill review, and the commoditization of the service, on the part of senior management and policyholders alike. Their sense is there is little to no appreciation of the difficulties inherent in staying on top of fee schedule and rule changes, increasingly sophisticated provider billing techniques, and impact of bill review on claims costs. Pressed to reduce costs and staff during this soft market, respondents are frustrated by their inability to convince C-level personnel of the relationship between effective (i.e. well-done and not cheap) bill review and ultimate claims costs and combined ratios.
The ratings of bill review vendors and application providers show respondents are quite current and aware of changes at the various suppliers. Vendors that would have been rated poorly as recently as a year ago are viewed more favorably today, with respondents very much open to considering bill review application vendors that would not have made their first cut twelve months ago.
There were notable differences among and between the various bill review vendors and application providers, differences that ‘didn’t appear until well into the implementation phase’. The perception among respondents was that these differences were due in part to a failure on the front end to be very clear and precise about semantics (what, exactly, is a ‘bill’, what is a ‘rule’, what is a ‘duplicate bill’, when does the clock start and end for turn around time, whose responsibility is it to ensure the DRG grouper complies with and is consistent with specific state regs, and on and on). As a result, costs, throughput, efficiency measures, ‘savings’ and other metrics had to be re-adjusted, causing more than a little agita for program managers.
Finally, some bill review applications and vendors were perceived to be better positioned to address likely changes in the overall health care system. Respondents viewed these vendors as more flexible, more adaptable, and more cognizant of the broader systemic issues and their potential impact on workers comp. One knowledgeable respondent noted “some of these vendors are so focused on comp that they aren’t paying attention to current and likely future changes in Medicare physician and hospital reimbursement…and their systems just won’t support some of the likely changes in Medicare-based fee schedules..”