Average claim life continues to increase due to the injury severity and increasing medical treatment costs. While employers continue their involvement in processing claims to reduce costs, insurance companies/TPAs also must do all they can to save on the costs of handling and controlling claims. Here are five ways to reduce WC costs.
1- Do not sign a contract for services with one national company/vendor
In an effort to control cost, insurance companies go to independent medical examinations (IME) or medial case management vendors for bids. The low bidder receives a non-compete contract from the insurance company/TPA for the life of the contract.
Good idea? Unfortunately low service costs are not the only criterion helping to resolve claims. These companies must proactively provide services in handling claims to resolution based on the TPA/insurance company’s criteria. If the vendor has no competition, how hard will they work in assisting you to resolve issues given they have a contract for a year – bought and paid for? (WCxKit)
2- Be aggressive with medical bill cost containment (per jurisdiction)
Bigger TPAs/insurance companies have internal cost containment departments, otherwise known as “medical bill review” or “medical fee reduction.” Smaller places use an outside vendor for these services. There are a number of good vendors who do utilization review/cost containment at a reasonable cost. Whatever the name, their role is to reduce the costs of medical bills — procedure code by procedure code, depending on the TPA/insurance company’s participating medical network(s).
Often what is missed is some providers/clinics are open to agreeing to a lower fee. If a popular physical therapy clinic in your area nets many of your claimants, it is worth a phone call to negotiate a 10 percent under fee-reduction price in exchange for “preferred provider” status. (Check jurisdiction and legal counsel.) Think long-term. Any reduction is worthwhile especially for the price of a phone call.
3- Stay on top of your claims by being proactive
Some claims remain open due to adjuster laziness. This is especially true when the case is in litigation. By proactively handling the file and using negotiation skills, claims may be resolved months earlier instead of lingering from litigation date to litigation date without any aggressive attempts at resolution. Become involved and stay involved until the case is resolved. Prioritize your files and stay on top of them and before you know it the claim is ready to be closed.
4- Use telephonic nurse case management
When a worker is off work, every day of lost wage is an expense. You want to do everything possible to bring the worker back to the job as quickly as possible. Telephonic nurse case management (TNCM), as opposed to on-site nurse case management (NCM), gets the same result, for a quarter of the price. Cases needing a nurse usually demand more follow-up, easily done by phone. The nurse calls the employer, the claimant, talks to the treating doctor’s nurse, gets hospital records, etc. A TNCM frees the adjuster to work on other tasks the file needs, such as background checks, ISO searches, vendor assignments, etc. (WCxKit)
NOTE: The Utilization Review Accreditation Commission (URAC) is an umbrella organization responsible for certifying Nurse Case Managers (NCM); Triage Nurses (TN); Telephonic Case Management (TCM); Field Case Management (FCM); Utilization Management/Utilization Review (UM/UR); and Peer-to-Peer Review. To maintain quality control all these entities need URAC certification. URAC has stringent protocols for education, credentials, and training for these services.
5- Watch your Leakage
Leakage is the biggest animal in the “reducing claim cost” jungle. Unnecessary costs, expenses, and errors in payments add up to astronomical amounts of money — often unrecoupable. Audit your files, do file reviews, and make sure to resolve leakage when found and stop it from happening.
Claims costs are up across the board. By implementing a few proactive steps at a time, an employer working with the TPA/insurance company can stop the bleeding and keep costs as low as possible.
Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com .
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