Risk Insider: Jerry Poole

Beware of Emerging Medical Cost Drivers in Workers’ Comp

By: | September 19, 2014 • 3 min read

Jerry Poole is president and CEO of Acrometis, a PA based company offering claims processing platforms designed specifically for workers’ comp. With more than 20 years in the workers’ comp industry, Jerry is responsible for managing internal operations at the company. He can be reached at [email protected]

One consequence of the Affordable Care Act is the increased billing pressure applied to the workers’ comp industry. Searching to replace revenues lost in primary care, new treatment trends will reveal themselves in the comp world at an ever increasing pace. It is critical that payers have strategies in place to support claims professionals in their efforts to combat these emerging cost drivers.

An example is surgical implants. While still rare enough to befuddle a claims process, these procedures are expensive enough to have serious implications for medical losses. But medical devices are no different than the other cost drivers that came before (physician dispensing, compounding, etc.) nor the ones that will most certainly follow. These “hot-buttons” highlight the need for people and processes to be ready to respond quickly and consistently to whatever the next challenge brings.

New Treatments Mean New Jurisdictional Differences

One issue that surgical implants highlight is the vast difference in the way each jurisdiction allows payers to deal with reimbursement.

Up until recently, California allowed payers to be billed once for the procedure, at a 120 percent reimbursement rate, and billed again for the hardware or material used. In 2010, before the double-billing loophole was closed, total payments for implant device procedures totaled $67.5 million in California. A study from the Minnesota Department of Labor & Industry in 2013 found that hospitals marked up the cost of implants by 200 percent, in one case up to 500 percent. These variations arise as providers work to maximize revenue and regulators have yet to determine what is reasonable.

Jurisdictional variations create a “wild-west” approach that claims professionals have to deal with when determining what should be allowed and what should be investigated further. This creates incredible pressure for claims professionals and payers who have to determine next steps for this bill while under a jurisdictional time clock and then find ways to adjust the process for the rest of the claims professionals. More often than not, this process is too much for one claims adjuster to handle on top of their other responsibilities, and thousands of dollars can be lost as a result.

New Treatments Mean New Complexities

One complicating aspect of surgical implants is the use of “kits”. These kits contain all the components associated with a surgical implant, but not all of these components might be used in a specific surgery. Careful scrutiny of the notes is required to determine if it was appropriate to be charged for the entire kit. With components costing thousands of dollars each, there can be significant savings to be had.

These kits are simply another example of ways to potentially hide costs or increase billing opportunities.

As new treatments come to market, it is critical that payers arm their claims professionals with the training, tools and support needed to handle these new complex treatments when they arise.

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The R&I Editorial Team can be reached at [email protected]