We all must take responsibility for our part in the most recent crisis in workers’ compensation.  Let’s examine what I like to affectionately think of as the “infamous top ten list” of reasons for rising medical costs in workers’ compensation. 

#10  Medical Providers offer “value-added” services to their patients such as dispensation of medications or medical equipment from their practice.  These services help the provider make up for revenue lost from fee schedule reductions.  However, savings are lost to the insurance company and ultimately the employer because designated preferred providers offering deep discounts are not used for these services.     

#9  Medical Provider Networks (MPN’s) are not customized.  The majority of MPN’s are typically large PPO’s (Preferred Provider Organizations) re-contracted and designated as MPN providers.  The MPN provider is not educated about ACOEM, ODG or MTUS guidelines or the return-to-work focus so necessary to controlling lost time in workers’ compensation.  The only value of the MPN is the ability of the claims administrator to control the medical direction of the file.  But, if the medical direction of the case is adversely affected by uneducated providers that do not adhere to the expectations of the MPN contract, then savings are not achieved and in fact utilization and costs tend to increase exponentially.   

#8  The claims industry varies what is reported as a medical expense.  Items being reported as medical expenses may not be categorized correctly and medical expenses may be artificially inflated due to current reporting practices. 

#7  Occupational Health Clinics treat patients too long.  Occupational Health Clinics offer effective acute care.  However, it seems when there is a soft tissue sprain/strain diagnoses, the injured worker is prescribed on-going conservative treatment much longer than necessary.  A multitude of physicians treat the injured worker in the occupational setting.  A lack of continuity of care contributes to maintaining treatment within the occupational health clinic versus making swift referral to an appropriate specialist.  Referral to a specialist is problematic as well.  The occupational health clinics refer to specialists contracted with their clinic.  The contracted specialist may evaluate and treat patients at the clinic once every two to three weeks.  If an injured worker cancels an appointment with a specialist, they will wait another two to three weeks to be evaluated.  Lost time is extended because of the lack of availability of a specialist on a daily basis.  Meanwhile, even if the injured worker is referred to a specialist, the occupational health physician will continue to see the injured worker on a weekly basis with no justification for a weekly visit.  Again, the cost of medical is increased through duplicate visits with no justification.  

#6  Rising utilization and introduction of new technologies.  Injured workers typically opt to continue to treat with the expectation they will be one hundred percent improved and cured.  Length of treatment is much longer in workers’ compensation than treatment for like diagnosis in group healthcare.  It seems there is a sense of entitlement to on-going treatment until the desired result is achieved even if all medical providers recommend against further procedures and treatment due to concern about outcomes.    Injured workers also like to access the most advanced technology to resolve their medical condition.  Any request for experimental treatment is always a challenge.  The process to approve or deny the request is lengthy and costly.  The cost of treatment is high because there is no precedent set and the outcome is always questionable.    

#5 – The epidemic of chronic pain and sometimes lifelong treatment.  - Physical Medicine and Pain Management are challenging.  Most medical recommendations did not previously fit into medical treatment guidelines.  Treatment was frequently denied by peer review but then taken to expedited hearing where it was frequently authorized through the legal system.  Medical cost savings were lost and legal fees were incurred increasing costs further.  There are new treatment guidelines addressing physical medicine and chronic pain.  The guidelines authorize much more treatment than was previously authorized for injured workers’ with chronic conditions.  There are fewer issues with authorization and legal intervention but treatment remains long term, high priced, and outcomes remain poor.  There is just no winner in the epidemic of chronic pain. 

#4 –Cost shifting from hospitals – Hospitals are inundated caring for uninsured and underinsured patients.  Anyone who does not believe there is a healthcare crisis should spend a day at the hospital.  The uninsured and underinsured line the emergency room halls.  A typical wait for care in an emergency room is up to twelve hours on a busy day.  Those that are uninsured or underinsured know they can not be turned away from the emergency room. But, who is paying for this care?  The cost is shifted to workers’ compensation, liability, group healthcare and any other form of commercial insurance, employer sponsored or government sponsored plan.  In essence, we are all paying for the care of those unable to obtain insurance coverage.  Some hospitals are quietly closing because of their inability to shift costs.  A significant number of other hospitals have simply closed the door to their emergency rooms so they can attempt to run a profitable hospital through the provision of other services.  The group healthcare crisis affects all of us and its impact hits the bottom line of workers’ compensation in-patient hospitalizations significantly.     

#3 – Utilization review has added costs to the system.  There is a mandate to work with the treating physician to agree upon a modified treatment plan when a denial is anticipated.  This does not frequently occur.  Due to legitimate time constraints, a concerted effort is not made by peer review to reach the treating physician to obtain agreement on a modified plan.  When the treating physician is not reached regarding a modified plan, costs immediately increase.  The Utilization Review process becomes adversarial.  Instead of resolving issues from a medical prospective, the medical dispute typically becomes primarily legal thus driving up costs.  There are also varying ways of charging for utilization review services that tend to drive the costs of utilization review up.  Professional charges for utilization review need to be scrutinized carefully.  Many reviews reach the more expensive peer review level unnecessarily and the customer is charged again when an appeal occurs due to lack of information or inability to reach the treating physician regarding requested authorization. 

#2 – Managed care program providers outside of the geographic area do not understand local issues.  It is understandable that providers offer services outside of our geographic area.  However, there is a distinct disadvantage in doing so.  You tend to work in a vacuum and lack understanding of the effective workers’ compensation providers and services within the geographic area.  This lack of understanding can be costly if the injured worker is referred to a less than effective provider. 
 
#1 – Waste is the number one reason costs are rising.  There is waste of DME equipment that is never picked up, sent back, or recycled.  There is waste of medications.  Injured workers frequently receive expensive compound creams that keep coming and coming despite cancellation by the injured worker or case manager.  Physicians change medications before the previous prescription is completed.  Physicians do not confer with other physicians on the case to insure adverse effects from medications are not experienced by the injured worker.  Adverse effects frequently require medical attention to reverse and this increases the cost of the claim.  Medical Provider Networks are not customized to offer efficient and effective service that complies with workers’ compensation regulations.  Utilization Review returns determinations due to a lack of information or inability to contact the treating physician.  The decision to render a denial, versus make the extra effort to obtain the information or contact the physician, increases the length of the process and extends temporary total disability payments as the disputed decision is resolved.  Bill Review does not always catch denials from utilization review.  Examiners pay for medical services that were denied by utilization review because they are not flagged by bill review.  Telephonic Case Management holds onto cases they are not moving toward resolution.  Telephonic Case Management does not create action on claims but simply reports medical status.  Field Case Managers obtain updates from physicians but do not facilitate care or insure the physician understands issues and goals related to the care of the injured worker.  Physicians do not understand ACOEM, ODG or MTUS and they do not understand the goal is to return the injured worker to work as soon as possible – modified or usual and customary.  The claims examiner is inundated by everything because there is too much to learn, too many fires to put out and too little time. 

It is time for all Managed Care, Medical and Claims Professionals to work together as a team.  It is our responsibility to reduce workers’ compensation costs through elimination of waste and modification of processes to improve efficiency and effectiveness.  Changes will help the injured worker and the employer but most importantly it will prove Managed Care, Medical and Claims Professionals really can control medical costs…..just like we say we do.    

Readers may write to Maureen Kohl Bennington, M.S., CCM, CDMS, CPUR, CRC at mbennington@buildingpeopleinc.com