Guest Columns

Lessons from increasing medical claims

Cameron Keir
Cameron Keir

It's no surprise that medical claim costs are on the rise in healthcare. As more staff become active in reporting work-related injuries, some of these costs can have negative effects on a company's bottom line. Proper staff training and safety training programs can help us manage these costs more efficiently. We've looked into how Revera Health Systems can improve its financial results when it comes down to controlling medical claim costs. These tips are not just for Revera, but can be adapted to any institution struggling with medical claim costs.

The Healthcare Landscape

What we are experiencing and is occurring in our industry, not surprising is a shift where the increase in medical costs has surpassed the costs of indemnity (Loss Time/Wages). Traditionally, indemnity has been where the majority of claim dollars have been spent.  

What this implies is twofold: Organizations are more focused on effectiveness of return to work/light duty programs, which has greatly reduced the severity of cases with lost work days, and costs paid by workers compensation benefits have declined. Second, the cost of medical treatment continues to escalate at a much higher rate. The healthcare industry is expected to see medical inflation costs continue at a rate of 8%-12% over the next year. While this can be seen as alarming, there are a number of things Revera centers are doing to positively  impact results with aimed focus and execution.

Direction of care

Each center should have a designee for employees to go to when they sustain a work-related injury. This would be a case where employee requires evaluation for first-aid or direction for initial outside medical treatment.  Supervisors/managers are an option, if they are fully capable of knowing how the system works, and will take responsibility for assuring the process is maintained. In centers across the healthcare continuum, employees are still going to hospital emergency rooms, and between the lengths of time employees spend waiting to see a medical professional, and the exorbitant costs of the visit, medical cost claims are on the rise. This implies the employee may have had no idea what to do or where to go for a work injury. We are educating its employees on ‘best practices' when it comes to work-related injuries, so we can keep our medical costs in-line.

Pharmacy costs

The costs of medications can be astounding, and when you consider an employee may require medication for the rest of their life, it adds up to an expensive issue. The insurance industry has recognized that most of the increase in medication costs is due to CMS calculating lifetime pharmacy needs on claims.  

Revera centers understand the concern and need for more effective medical management in this area. Our third-party claim advisor is conducting studies in this area to determine possible options to suggest to the medical professional community that certain pain medications should be prescribed less frequently if they pre-dispose a patient to drug addiction. 

Accident Investigation

Accident investigation serves benefits for internal follow-up and also external follow-up, when there is risk of third party liability. Documentation, evidence, and the facts become critical. At Revera, we understand that we have to be diligent about investigating accidents, gathering the facts, documenting the investigation immediately, and reporting claims timely. Lag time is a key indicator of how the accident investigation process is working. It plays an important role when it comes down to determining from a claim adjuster's desk whether a claim should be an accepted claim or denied, and if accepted, what the course of medical treatment should be. (Each state has a specific timeline of how many days from the alleged injury date a claim can be denied. If this date is missed because claim was reported late we own it). 

Another factor is the breakdown in communication due to lack of employee direction and connection with the insurance adjuster. In many cases, this results in employees seeking medical treatment with their own doctor or going to the ER. This may then become more complicated when medical treatment is out of network and/or contested. The employee then retains an attorney. This begins the whole litigation process of which in most state jurisdictions, we are not in the driver's seat. As a result, we will then incur additional legal defense expenses and face higher settlement costs. 

So, how do we combat this from happening? The first step is to make sure ALL employees are aware of accident reporting requirements. Supervisors and managers must be held accountable for their role in the Supervisors Accident Investigation process and make sure the accident investigation report is delivered to the HR/WC contact timely so they can file a claim to the appropriate parties on a timely basis. 

Our expectation is that an accident must be reported by employee on same day, if not immediately.  Accident Investigation training continues to be provided annually for supervisors of centers in need by our risk control consultants. Revera's third-party claim advisor will continue to facilitate this training in 2015.

The Revera lag time goal for claims reported timely is for claims to be submitted to insurance within (1-3 days) to be considered on time. This doesn't happen by accident (no pun intended). It takes commitment and focus on achieving our goal. In 2014, Revera was running 80.6% for timely reported claims as of end of November, slightly ahead of the 80% goal for 2014.  For 2015, we are looking for all centers to achieve an 82%>. 

Embracing and promoting our organization's Zero Accident Culture through communications along with the motivation and drive to get us there, will help us to succeed in achieving this goal.

The second area is with our internal management of claims. Every claim should be tracked and an employee's medical status monitored weekly. There needs to be verbal communication with the employee on a weekly basis, whether the employee is at work or disabled from work to assure they are following their medical care plan. (Early Return to Work and control of medical costs) This will serve to obtain the latest medical updates and dates of follow-up visits to doctor. 

Conclusion

Medical claim costs are on the rise in healthcare. As more staff become active in reporting work-related injuries, some of these costs can have negative effects on a company's bottom line. Proper staff training and safety training programs can help us manage these costs more efficiently and a hard look at processes and details are key. Revera Health Systems has worked hard to combat rising medical claim costs and having achieved their goals in 2014, is eager to see what 2015 has to offer. 

Cameron Keir is Revera Health Systems' Director of Employee Safety.
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