Recently there has been much discussion regarding
the failings of the workers’ compensation system. What is the cost of the system on a worker’s
life and on the employers who pay the high cost of workers unable to perform
their jobs? Claims claim administrators are tasked with
saving money on each claim file. Many “cost
saving methods” add to the both time and expense cost to the claim. This post is devoted to bill review companies
that re-price medical bills with the goal of “discounting medical bills”-- a
retroactive review.
Bill review companies orate that they are specialty bill review
organizations and often tout their network affiliations. The goal of all of these “parts” is to
discount the workers’ compensation medical bills. Most workers’ compensation networks do not
demonstrate better medical care by their physicians. They don’t advertise better medical
outcomes.
The business of medical bill review is to “slash” the medical
bills retrospectively. Each medical bill
review vendor has its own business model and advertising strategy. Each may
take a slightly different approach to the common goal of medical bill reduction. Bill review does have a purpose in workers’
compensation, but one size does not fit all.
For many years bill review has been a commodity. (I anticipate every bill review company will
object to this terminology.) Each
company tries to differentiate them self from their competitors, but most of
their clients are looking only at the cost of the service. Thus, there is increased automation,
auto-adjudication, streamlining and off-shoring of at least a portion of the bill
review process. None of these processes
are “bad” and all will decrease the cost of the bill review, but do nothing for
the quality of medical care and often delay the payment of the medical bill due
to the lengthy grievance process and the slow turn-around of many vendors. This is the reason that “balance billing” of
the injured worker is often banned by workers’ compensation statutes as it
stays the injured worker from being referred for collection.
Many bill review companies will emphasize their goal of ensuring
their clients pay the appropriate amount and no more. This goal has been somewhat lost in the
shuffle. Automation, speed and strong
competition have not always ensured an equitable solution of fair payment of
appropriate medical bills. An
overzealous bill review company will deeply discount bills only to find that
the review does not stand up to appeal and/or scrutiny and their client will
often have to pay additional money to the provider of the medical care.
Most medical bill review companies have a per bill charge,
usually called a “header charge”. This
is a small amount charged per bill which covers the data entry required for
each bill. It is common in the industry then to charge a percentage of
savings. This type of savings is
realized by the bill review in several different ways and varies within the
industry.
Network “savings” is billed as a percentage of the discounted
amount. The network savings is incurred
most often by retroactive re-pricing of the billing without upfront steerage to
the “network” providers. As an onlooker
of this process, I find this an area of conflict between medical providers and
their payers--the providers are often not aware that they are a member of these
networks. For more information look at the
many articles on “Silent PPOs” written over the last decade.
Some states do have preferred networks for Workers’ compensation
and the injured worker is required to a certain degree to access these network
providers. In this case the networks often
do not discuss the quality of the care over the price of the care. Many excellent providers are not in these
networks and may prove critical to a good outcome for a particular injured
worker.
Savings is also
calculated by the amount of billed charges that are reduced down from the state
fee schedule. Bill review clients
beware: this may be over stated and the
full discounted price of the billed charges may be taken rather than the difference
of the reduction below the state fee schedule.
Another way that bill review companies realize savings on a
medical bill is to analyze the medical records and compare them to the billing
statement to determine if the billing is based on the actual services
rendered. This is often done by a nurse
who is not a certified coder, or a certified coder that has no billing
experience or auditing experience.
The conversation so far has pointed out many areas of concern
with regard to the success or failure of medical bill review companies on the evaluating
the medical care as it relates to appropriate billing. This is not entirely the bill review vendors'
fault. Their client’s bear much of the responsibility as they engage the
vendors in competitive bidding wars to find the lowest cost for the bill review
services.
Bill review as a commodity comes with a cost that neither saves money
nor ensures appropriate medical care. Some
of my thoughts and observations are listed below to delineate some of the
short-comings I have seen in the current bill review system.
·
For
some procedures, the amount reimbursed is dependent on modifier codes. The modifiers must be entered and are often
overlooked as the data entry quotas become unattainable.
·
A
nurse audit may be separately charged at a higher rate than other types of bill
savings typically charged to the client.
The payer would be well served to see that a nurse review was completed
and the impact on the bill documented.
·
More
often than not the payer pays the bill review vender for all bills big and
small. A 100 dollar bill and a 5000 bill
without “savings” found are both charged the same header fee. Is it necessary to review every bill? Would a Vendor review of the bills and a
selection of bills referred for bill review be prudent? This may especially be true in fee schedule
states when the bill is from a provider that has been paid many times in the
past.
·
It
is now becoming more prevalent that the bill review client must now approve the
vendors recommended payment to the provider. This author feels that process may be in place
to decrease the conflict between payer and provider. Is this cost necessary if the bill review
company is making sure the payers pay what they owe?
·
A
question every bill review client should consider asking is: does bill review vendor depend only upon
their system to reduce the bills or if they employ certified coders for data
entry so the data is being input correctly?
·
Off
shoring part or all of the process may be of interest to some bill review
clients. This practice is not always
advertised by bill review venders, but at least some of the venders employ this
at some point in the process.
· Payers
need and want national solutions bill analysis.
It is important for the file handlers and/or the employers take the time
to understand some of the state-specific as some of the state-specific billing
can dramatically influence costs. The bill review vendor’s automated system may
or may not be able to pick up on the state differences.
· Preferred
provider networks are important not only in cost control, but in appropriate
medical services. An example of this is
an MRI provider. Preferred provider
networks do not always save the payer money as they do not always provide high
resolution films that enable appropriate diagnoses. The image quality of an MRI
depends on signal and field strength.
Many networks include MRI vendors who have low signal and/or field
strength resulting in poor films. The
need for a second MRI due to poor film quality not only delays medical
treatment and increases the claim cost.
· Network
providers may extend a discounted rate by offering a different level of care. Do
the injured workers see physical therapy assistants rather than certified
physical therapists? Do the injured
workers see a physician or a nurse practitioner?
· Preferred
provider networks are not created equally.
The providers in the network are credentialed with regard to current unimpeded
licensure. The question is are the
network providers known for their expertise and positive medical outcomes?
In conclusion, insurance companies/TPAs have been able to cut
their medical bill costs, but the question is whether or not the price they are
paying is greater than or less than the reduction in their in-house administrative
expenses.
My thought on the current trend: Carriers, TPAs and self-insured employers rely on
accessing networks for cost reduction. Bill
review is a necessary way to get bills re-priced to network rates, and a source
of data for state reporting. This may
lead to the bill review venders charging a flat rate per line or per bill. This in turn moves the bill through an
automated system and removes the incentive for bill review venders to find
billing discrepancies and the original purpose of bill review is no longer realized.
