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Workers comp bill review – key findings from the latest Survey

Many payers’ bill review systems are still not electronically connected to medical management applications; bill review prices are lower than they were three years ago, and payers are increasingly interested in bill review applications’ rules engines.
Those are three of the key findings from the latest Survey of Bill Review in Workers Compensation, and result from answers provided by 24 respondents from payers large and small.
We last conducted the survey back in 2009, and waited three years to see how quickly the industry would evolve. In some ways there’s been a good deal of change; in others, not so much.
The connectivity issue is perhaps the most visible. While there’s no doubt more payers have done a lot to tie bill review to medical management systems, many are still relying on “manual” processes to ensure bills for unauthorized or denied care are not paid or otherwise handled correctly. This greatly increases the chance for error, thereby increasing costs and wasting the time and money spent in the UR process.
Prices have declined, both for outsourced bill review and for payers leasing vendors’ systems, this despite the consolidation among application vendors that’s removed several once-significant players from the industry.
What has changed is the focus on auto-adjudication and interest in rules engines, driven – according to respondents – by a quest for greater efficiency and consistency.
With prices for bill review coming down, it’s not surprising interest in efficiency and automation is up; the soft market and pressure on admin expense is certainly a factor as well along with the desire to more consistently – and accurately – pay medical bills.
I expect the Survey report will be available by the end of next week. More to come.

2 thoughts on “Workers comp bill review – key findings from the latest Survey”

  1. Hi Joe. Great points and something that was discussed in Orlando last week as well. As market factors place increasingly greater pressure on our industry a need to implement automated solutions both in bill review and claims processing in the workers compensation industry is imperative. We’ve seen dramatic bottom line improvements within our clients when an automated solution is employed replacing manual, or semi-automated systems, especially when bill review and claim processing are delivered using the same platform. A rules engine driven solution that ensures each claim is reviewed and processed using the same standards not only increases productivity and efficiency but also delivers consistent performance that enables payers to remain compliant; eliminate erroneous or fraudulent billing; lower administrative processing and loss expense; increase productivity and enable better utilization of managed care networks for optimum performance. We look forward to the survey.

  2. One reason that bill review/medical management integration is proceeding slowly is that managed care disciplines compute “cost savings” in ways that let them each declare victory – while overall claims costs rise.
    First, the utilization reviewers compute a “gee whiz” dollar value for their denials – even if bill review has paid for these denied treatments. Next, bill reviewers compute and claim credit for massive reductions of 55% to 65% for bills processed – even when savings comes from bills should not have been paid because they were denied by UR. Finally, PPO savings are calculated – claiming credit for reducing payments on bills that should have been screened out by UR and bill review.
    These savings computations by the different disciplines may be good internal indicators. However, the only real bottom line is whether the insuring organization is managing claims costs to objective – whether this is based on loss ratio, industry averages, year-to-year change in claims costs or other client determined target.
    Aligning objectives and incentives for the different managed care disciplines with overall objectives will go a long way towards driving integration.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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