Complex Claims

Helping Injured Workers Live Their Best Lives

Providers are developing new strategies for keeping up with advances in prosthetics and finding the best options for injured workers.
By: | May 2, 2017 • 7 min read

Experts are finding ways to mitigate the challenges of workers’ compensation claims involving the use of prosthetics, given the rising costs of ever-more complex devices — and the potential for psychosocial impacts and comorbidities.

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One Call Care Management this month announced the launch of its prosthetics clinical review program, in which a prosthetist certified by the American Board for Certification will assist claims adjusters in understanding the complexities of prosthetics and in making the most informed decisions about them.

Referrals meeting one or more of the following criteria will typically trigger such reviews:

  • myoelectric upper extremity systems
  • system upgrades and/or excessive replacements
  • microprocessor-controlled knee and ankle prosthetics; and
  • excessive socket changes

Recent case studies have shown savings of up to 52 percent when clinical reviews are added to the claims approval process, according to One Call.

Jennifer McCarthy, a One Call clinical specialist based in Boston who will lead the new team, said that clinical reviews are needed because claims costs continue to rise as advances in prosthetics happen so rapidly that carriers can’t keep track of the changing technology.

“Historically in times of war or conflict that involves our military, the U.S. government awards grants to researchers to develop prosthetic technology, so we have seen a recent influx of advanced prosthetic devices,” McCarthy said.

“Because the devices often can involve robotics, they are expensive to manufacture at such a small quantity. The manufacturers then to transfer the costs of research, development and manufacturing onto the provider and payer.”

Jennifer McCarthy, clinical specialist, One Call Care Management

Moreover, since some of the devices are so new, there is no set fee schedule from Medicare, she said. The manufacturers can suggest a retail price for the providers to bill or the providers will charge an amount above their invoice costs.

“They attempt to make this pricing somewhat standardized, but there can often be a significant variance in the pricing between providers for the same device,” McCarthy said.

One Call’s prosthetics clinical review program is different than a utilization review, which verifies the medical necessity of the device being recommended from a nurse’s perspective.

“Our new program is more of a clinical oversight from a prosthetist’s perspective to make sure the recommendation is truly appropriate and there are no other types of prostheses that would allow for a better outcome,” she said.

“Our goal is to ensure that the device the prosthetist is recommending is appropriate for the patient’s functional level and will allow the individual to reach his vocational and avocational goals.”

Outreach to the prosthetist involved in the claim is often necessary to determine what other types of prostheses were considered and why they would not be appropriate, McCarthy said.

“If local expertise and resources are not available, it is sometimes more advantageous to send the patient to a center with expertise to minimize the risk and costs associated with ‘trial-and-error’ approach to prosthesis management.” — Julie Fawson, director of clinical services, Paradigm Outcomes

Sometimes the team will come to the conclusion that an alternate device may be more appropriate or there might be coding changes that more accurately represent the device recommendations, which can reduce costs.

In determining the most appropriate device, One Call’s team will also consider the health history of the injured worker, what their experiences have been with any previous prostheses and the environmental history — which includes the worker’s support system, home and social environments.

“This gives us a more holistic approach to determining whether this particular prosthesis would allow them to reach their highest functional level,” McCarthy said.

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Upon request from claims adjusters, One Call will create a prosthetics cost projection document covering the costs of maintenance, servicing and replacement for the particular device.

The company already has a clinical review program for physical therapy and dental, so prosthetics is “the next natural progression of providing clinical oversight to our customers,” she said.

Julie Fawson, RN, director of clinical services at Paradigm Outcomes in Walnut Creek, Calif., said that workers’ comp carriers face many challenges when planning for an injured worker’s prosthesis needs, especially in the current environment of rapidly advancing technology and cost of prosthetics.

“Our team defines broad achievements, such as returning to work, and detailed goals that focus on specific areas of function,” she said.

When reviewing claims involving prosthetics, Paradigm Outcomes considers the complexity of the amputation; impact of comorbidities and conditions; the expertise and resources of the treatment team; and the management of the patient’s needs and expectations.

“In general, the more proximal the amputation, the more complex and costly it can be,” she said.

“For example, an above-elbow amputation is more complex than a below-elbow amputation. While in both scenarios the amputee may be a candidate for body-powered and myoelectric prosthesis options, fabricating a prosthesis that incorporates elbow function is much more significant in terms of cost, therapy/training, maintenance and functional recovery expectations.”

It is also important to consider comorbidities or conditions that may add to the complexity of amputation and prosthesis management, Fawson said. For instance, a patient with extensive muscle or nerve tissue damage at the amputation site, or with a very short residual limb, will be more complex in terms of fabrication, fit and function of the prosthesis.

A patient could also require reconstructive surgeries of the residual limb over time, which will change the composition of the residual limb, thereby increasing the frequency of costly socket revisions in the first couple of years.

Complexity on Many Levels

In all prosthestics claims, expertise of the treatment team — the physician, therapist and prosthetist — and the resources they provide, are vital to the success of managing complex amputees, especially given the high technology, high cost prosthesis options available today, she said.

“If local expertise and resources are not available, it is sometimes more advantageous to send the patient to a center with expertise to minimize the risk and costs associated with ‘trial-and-error’ approach to prosthesis management,” Fawson said.

It is also important to understand the patient’s occupational goals, lifestyle and avocational interests, to guide the treatment team and patient to make the most appropriate prosthesis choice that will optimize the patient’s functional and psychological outcome, she said.

Julie Fawson, director of clinical services, Paradigm Outcomes

To alleviate the challenges of locating qualified providers of prosthetics, Memphis-based Sedgwick Claims Management Services Inc. developed a provider benchmarking tool to help identify providers who are known for consistently delivering high quality care and desired outcomes, said Kimberly Talton, a Sedgwick complex claims advisor based in Dallas.

“Another challenge is determining what to expect when it comes to amputees’ ongoing needs and care,” Talton said.

“Within the complex claims unit, we work with the team to provide education about critical care pathways to identify what to expect with these types of injuries, ongoing needs and costs of these types of claims.”

One of the challenges is determining the appropriate type of prosthetic for a particular person, as every individual and amputation is unique, said Riverside, Calif.-based Edward Canavan, vice president of Sedgwick’s workers’ compensation practice and compliance.

“Some individuals with amputation could end up being diabetic, and so they’ll have different needs than other amputees,” Canavan said.

“We want to get individuals to the right doctor who can give them the right recommendation to fulfill those needs, and then we can partner with the individuals to get them the right prosthetics.”

Other challenges are centered around the fast-paced evolution of technology for prosthetics, and determining whether the medical and peer review guidelines allow the use of particular devices that have recently been developed, he said.

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“There is so much research going on in every sort of prosthetic to help the injured worker, including the development of devices to feel what they are touching, exoskeleton research to help the person walk again, and stem cell therapy,” Canavan said.

“We need to balance that with determining what can help the injured person get the best possible outcomes. That’s where complex claims review comes into place. We can also leverage the right resources such as a prosthetics clinical review program.”

Prosthetics claims can be impacted if the affected amputation area hasn’t healed properly and completely before being fitted, said Rachael Ruther, a Sedgwick complex claims advisor based in Brea, Calif.

“Prosthetics are so specialized,” Ruther said.

“You want to be sure there is a proper fit; otherwise, the prosthetic may not be functional and may go unused.”

The key to providing the best care possible is to get patients as close to a normal level of functionality as possible, Talton said.

“Hopefully we can reduce some of the mental issues that come with these types of injuries such as depression and anxiety,” she said. &

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Lead Story

Improving the Claims Experience

Insureds and carriers agree that more communication can address common claims complaints.
By: | January 10, 2018 • 7 min read

Carriers today often argue that buying their insurance product is about much more than financial indemnity and peace of mind.

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Many insurers include a variety of risk management services and resources in their packages to position themselves as true risk partners who help clients build resiliency and prevent losses in the first place.

That’s all well and good. No company wants to experience a loss, after all. But even with the added value of all those services, the core purpose of insurance is to reimburse loss, and policyholders pay premiums because they expect delivery on that promise.

At the end of the day, nothing else matters if your insurer can’t or won’t pay your claim, and the quality of the claims experience is ultimately the barometer by which insureds will judge their insurer.

Why, then, is the process not smoother? Insureds want more transparency and faster claims payment, but claims examiners are often overburdened and disconnected from the original policy. Where does the disconnect come from, and how can it be bridged?

Both sides of the insurer-insured equation may be responsible.

Susan Hiteshew, senior manager of global insurance and risk management, Under Armor Inc.

“One of the difficult things in our industry is that oftentimes insureds don’t call their insurer until they have a claim,” said Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“It’s important to leverage all of the other value that insurers offer through mid-term touchpoints and open communication. This can help build the insurer-insured partnership so that when a claim materializes, the relationships are already established and the claim can be resolved quickly and fairly.”

“My experience has been that claims executives are often in the background until there is an issue that needs addressing with the policyholder,” said Dan Holden, manager of corporate risk and insurance for Daimler Trucks North America.

“This is unfortunate because the claims department essentially writes the checks and they should certainly be involved in the day to day operations of the policyholders in designing polices that mitigate claims.

“By being in the shadows they often miss the opportunity to strengthen the relationship with policyholders.”

Communication Breakdown

Communication barriers may stem from internal separation between claims and underwriting teams. Prior to signing a contract and throughout a policy cycle, underwriters are often in contact with insureds to keep tabs on any changes in their risk profile and to help connect clients with risk engineering resources. Claims professionals are often left out of the loop, as if they have no proactive role to play in the insured-insurer relationship.

“Claims operates on their side of the house, ready to jump in, assist and manage when the loss occurs, and underwriting operates in their silo assessing the risk story,” Hiteshew said.
“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.”

Both insureds and claims professionals agree that most disputes could be solved faster or avoided completely if claims decision-makers interacted with policyholders early and often — not just when a loss occurs.

“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.” – Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“Communication is critically important and in my opinion, should take place prior to binding business and well before a claim comes in the door,” said David Crowe, senior vice president, claims, Berkshire Hathaway Specialty Insurance.

“In my experience, the vast majority of disputes boil down to lack of communication and most disputes ultimately are resolved when the claim decision-maker gets involved directly.”

Talent and Resource Shortage

Another contributing factor to fractured communication could be claims adjuster workload and turnover. Claims adjusting is stressful work to begin with.

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Adjusters normally deal with a high volume of cases, and each case can be emotionally draining. The customer on the other side is, after all, dealing with a loss and struggling to return to business as usual. At some TPAs, adjuster turnover can exceed 25 percent.

“This is a difficult time for claims organizations to find talent who want to be in this business long-term, and claims organizations need to invest in their employees if they’re going to have any success in retaining them,” said Patrick Walsh, executive vice president of York Risk Services Group.

The claims field — like the insurance industry as a whole — is also strained by a talent crunch. There may not be enough qualified candidates to take the place of examiners looking to retire in the next ten years.

“One of the biggest challenges facing the claims industry is a growing shortage of talent,” said Scott Rogers, president, National Accounts, Sedgwick. “This shortage is due to a combination of the number of claims professionals expected to retire in the coming years and an underdeveloped pipeline of talent in our marketplace.

“The lack of investment in ensuring a positive work environment, training, and technology for claims professionals is finally catching up to the industry.”

The pool of adjusters gets stretched even thinner in the aftermath of catastrophes — especially when a string of catastrophes occurs, as they did in the U.S in the third quarter of 2017.

“From an industry perspective, Harvey, Irma and Maria reminded us of the limitations on resources available when multiple catastrophes occur in close succession,” said Crowe.

“From independent and/or CAT adjusters to building consultants, restoration companies and contractors, resources became thin once Irma made landfall.”

Is Tech the Solution?

This is where Insurtech may help things. Automation of some processes could free up time for claims professionals, resulting in faster deployment of adjusters where they’re needed most and, ultimately, speedier claims payment.

“There is some really exciting work being done with artificial intelligence and blockchain technologies that could yield a meaningful ROI to both insureds and insurers,” Hiteshew said.

“The claim set-up process and coverage validation on some claims could be automated, which could allow adjusters to focus their work on more complex losses, expedite claim resolution and payment as well.”

Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Predictive modeling and analytics can also help claims examiners prioritize tasks and maximize productivity by flagging high-risk claims.

“We use our data to identify claims with the possibility of exceeding a specified high dollar amount in total incurred costs,” Rogers said. “If the model predicts that a claim will become a large loss, the claim is redirected to our complex claims unit. This allows us to focus appropriate resources that impact key areas like return to work.”

“York has implemented a number of models that are focused on helping the claims professional take action when it’s really required and that will have a positive impact on the claim experience,” Walsh said.

“We’ve implemented centers of excellence where our experts provide additional support and direction so claim professionals aren’t getting deluged with a bunch of predictive model alerts that they don’t understand.”

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners.” — Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Many technology platforms focused on claims management include client portals meant to improve the customer experience by facilitating claim submission and communication with examiners.

“With convenient, easy-to-use applications, claimants can send important documents and photos to their claims professionals, thereby accelerating the claims process. They can designate their communication preferences, whether it’s email, text message, etc.,” Sedgwick’s Rogers said. “Additionally, rules can be established that direct workflow and send real time notifications when triggered by specific claim events.”

However, many in the industry don’t expect technology to revolutionize claims management any time soon, and are quick to point out its downsides. Those include even less personal interaction and deteriorating customer service.

While they acknowledge that Insurtech has the potential to simplify and speed up the claims workflow, they emphasize that insurance is a “people business” and the key to improving the claims process lies in better, more proactive communication and strengthening of the insurer-insured relationship.

Additionally, automation is often a double-edged sword in terms of making work easier for the claims examiner.

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners,” Holden said.

“So while the intent is to make things more streamlined for claims staff, the byproduct is that management assumes that examiners can now handle more files. If management carries that assumption too far, you risk diminishing returns and examiner burnout.”

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By further taking real people out of the equation and reducing personal interaction, Holden says technology also contributes to deteriorating customer service.

“When I started more than 30 years ago as a claims examiner, I asked a few of the seasoned examiners what they felt had changed since they began their own careers 30 year earlier. Their answer was unanimous: a decline in customer service,” Holden said.

“It fell to the wayside to be replaced by faster, more impersonal methodologies.”

Insurtech may improve customer satisfaction for simpler claims, allowing policyholders to upload images with the click of a button, automating claim valuation and fast-tracking payment. But for complex claims, where the value of an insurance policy really comes into play, tech may do more harm than good.

“Technology is an important tool and allows for more timely payment and processing of claims, but it is not THE answer,” BHSI’s Crowe said. “Behind all of the technology is people.” &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]