I look at all of my bills. Not just during work for business matters, but my personal bills as well. I do not catch many errors. In fact I think I have only caught maybe a handful of issues my entire life. These weren’t big issues, sometimes they were just duplicate charges, service fees that were supposed to be waived, or deposits on hotels that were supposed to be waived because I rescheduled within the allotted time frame without penalty.
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“How Do I Get My Adjusters To Follow My Account Handling Instructions?”
Of course I know of people that just pay their bills online automatically every month. They don’t review the itemized statements, nor do they even read the automated email notifications saying their bills were due and automatically paid per their own permission. For obvious reasons this drives me crazy. Humans sometimes fail. Systems sometimes fail. Mistakes happen. No matter how insignificant the duty may be, these risks of errors are always out there every day. Not just in billing matters, but in everything. My coffee order gets prepared incorrectly. My salad came with the dressing on the salad instead of on the side. Don’t even get me started about other issues involving flights being “on-time,” The point is to err is human, and last time I checked we were all human at least to some degree, especially in this industry.
Claims Industry Working To Become More Efficient
The latest craze is the argument over automated adjudication of minor claims and of lifetime claims that have steadied out as far as invasive treatment goes. Adjusters are busy, and insurers/TPAs are trying to do more with less. They want to become more efficient. They want to spend less and less time on what they deem to be “trivial” claims and spend more time on the more important claims that carry a higher exposure.
This makes sense. Adjusters should be spending more and more time focusing on the matters that are more important than Jim Worker who cut his finger and had to go to the doctor for a few stitches. Minor medical-only claims constitute a lot of the pending file counts on certain levels of adjusters, and those adjusters are also the ones that are just starting out in the claims world. This is where they should be learning the process, and how important it is to review every bill for relatedness.
But to introduce automatic claim handling by a computer worries me. I worry about leakage all the time, because wasting money is one of my many pet-peeves. The marketers of automated claim technology say that they protect against error, because of the data that has to be input into the system for a person. Date timeframes need to be in place. Body injury codes are input so the injury body part can be correctly identified. CPT codes and billing coding is also entered into the system to prevent certain treatments from being automatically paid. Maximum bill amount parameters can be placed so any big bill they may come in would be flagged and not paid so the adjuster can review and authorize the payment.
These are all well and good. In fact, it looks great! If this system works according to plan, then how could anything ever be paid in error? On paper, these automated systems appear to be the next greatest thing since the computer so adjusters can do more and become more proactive at their desks. So what could the problem possibly be with implementing an automated adjudication process?
I can tell you one problem right now—it would only be as good as the person inputting the information. Like I said above—to err is human.
Automated Adjudication on Lifetime Claims = Large Medical Leakage
Let’s say automated adjudication is used for lifetime claims. After all, you have accepted the left knee as being compensable for life. You owe it, and you owe treatment on it, depending on your jurisdiction. But for ease of an example, we will just say you owe it no matter what. So it makes sense to just automate the medical bill payment on it, right?
No it does not. And I will tell you why: What if the doctor this person treats with just has their left knee as the primary diagnosis? This injured worker treats with their primary care doc. In the doctor’s system, they have the injured worker down as the left knee being most important and primary diagnosis. But if he comes in for a non-work related back strain, I doubt the primary diagnosis will change. The CPT code would probably just be for an office visit, so the system has no idea that the person treated for their back because it just sees the diagnosis code, and the CPT code. Nobody is there to view the medical report, so this bill gets paid. Along with bills for the flu, arm pain, lab results, medication of various types for various elements, and so on. Now you have paid the medical bills for who knows what, for who knows how many years. That is a leakage emergency!!
When will this be corrected? Who is in charge of making sure the treatment is for the compensable knee? The answer is probably nobody. Plus this can happen on a number of claims. Add all of that up, and now you have a substantial number of medical leakage. One that should have never occurred in the first place if you had a real person reviewing medical notes that go with the bill before they paid it.
I saw a fantastic statistic from Acrometis in an article on their website entitled “How much is your auto-adjudication costing you?” (http://www.acrometis.com/strength/0123.htm) In this article, Acrometis states that “…auto-approving all submissions under $250 results in overpaying $8,000,000 if you only look at submissions that were returned but not resubmitted. Applying the same approach to all the submissions analyzed results in overpayment of more than $133,000,000.”
Now I could stand a bill here and there being paid in error. But you have to look at the total from a macroeconomic view. Look at the entire scope of a carrier/TPA, not just on the one claim itself.
Auto Accepting Bills May Accept Large and Unrelated Medical Services
Lastly and yet another great point in that article shows that auto-accepting some bills may loop you into also accepting much larger and potentially unrelated medical services. This could include costly prescriptions, DME bills, unwarranted exploratory surgical procedures, and so on. This would depend on your jurisdiction, but the end result is the nightmare that every adjuster has, which is being forced to accept treatment on an unrelated non-compensable body part due to adjuster error. This is going to land the adjuster in some hot water, and probable disciplinary action I would hope. This type of error is inexcusable!
All of these errors do not need to happen, and should not happen at all. They should not happen because adjusting claims should be done by a real person, not some automated service. Before we jump on the ship of automatic adjudicating, we had better take a step back and look at the consequences of error, both from a human standpoint and from a systems standpoint.
Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].
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