One of the main functions of any claims management team is to evaluate the exposure of a workers’ compensation case. If done early on in the process, these actions can reduce the overall “cost” of a claim and avoid unnecessary litigation expenses. Due to this success, teams are now using these techniques to control litigation expenses in liability cases.
Review of Records
The review of records has long been used as a best practice to mitigate exposure. Medical records hold a treasure trove of information about a claimant including their prior medical history, treatment tendencies, use of various treatment modalities such as chiropractic care and use of prescription medications. Claims management teams in industrial claims also use proven methods of reviewing medical billing records and peer review to reduce fraud, waste and abuse within the system. When used proactively, there has been a noticeable reduction in initial settlement demands, which leads to lower settlements.
In the context of liability cases, these same techniques have not been used. This is mainly the result of third-party administrators failing to transfer an expertise in claims management to non-workers’ compensation cases. However, some TPAs have received the message from the clients they support and are using these best practices to reduce exposures in liability claims. The results have provided immediate savings.
Role of Evidence Based Medicine
An important component of this process to reduce exposure in workers’ compensation claims also involves the use of Evidence Based Medicine or EBM. EBM is a process that utilizes the review of medical records, scientifically supported medical research and an evaluation of trends to make the best decision for a person seeking medical care and treatment. While EBM is not new, it is making resurgence for claims management professionals seeking to reduce outdated treatment modalities while at the same time providing the most effective care. It can also be used in liability cases with the same impact.
Implementing Effective Litigation Liability in Your Office
When selecting a TPA for your liability program, it is important to understand the level of experience this vendor has in the area of mitigation exposure through effective litigation analysis. Part of this process should include investigation into their procedures and background in the following areas:
- Experience level of the claim management team and understanding best practices in cost mitigation. Some of the necessary components to review include claim volume, specialization of claim handling services and ability to handle complex cases.
- Ability of the vendor to package medical record review, peer review and medical bill review. This should include the ability of the claim management team to review medical bills and identify trends of fraud, waste and abuse. They should also be able to document their ability to coordinate with other interested stakeholders and provide creative and cost-effective solutions.
- Team approach to handling claims. An effective team should include internal senior nurses to coordinate with the claims team on complex liability matters. They should also be able to quantify how their services can reduce the “cost” of claims.
Conclusions
Any proactive claim management team needs the ability to reduce costs and run an effective claims management team. One method of accomplishing this goal is to seek partners who are able to run and coordinate and effective litigation liability program. If done properly, this program will meet the goals and objectives of all stakeholders.
Author Michael B. Stack, Principal, COMPClub, Amaxx Work Comp Solutions. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool. He is co-author of the #1 selling book on cost containment, Your Ultimate Guide To Mastering Workers Comp Costs www.reduceyourworkerscomp.com, and Founder of the interactive Workers’ Comp Training platform COMPClub. Contact: mstack@reduceyourworkerscomp.com.
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