Risk & Business Magazine JGS Insurance Magazine Fall 2017 | Page 29

MEDICAL BILL REVIEW FEES
examine the medical provider used, the
medical procedures, and miscellaneous
medical codes.
Now this is all well and good for the
carrier and the insured. But here is
where their interests may diverge. If you
have a deductible as an insured, you are
paying the cost of claims out-of-pocket
up to the deductible amount. One
component of that claim is expense.
Many TPAs collect a percentage fee of
the medical savings. As an example, if
the initial bill is $23,000 and after bill
review is reduced to $11,000, a savings of
$12,000 is achieved. Depending on the
TPA, the fee can range from 17 percent
to 40 percent ($2,040 to $4,800) of the
savings. This will appear on the loss
report as an expense which is paid by the
insured.
Along with knowing the fee percent
charge, it is important to note that
some TPAs include rejected bills in
their savings reports and may be using
the savings from the full medical bill
charged rather than the lower state fee
schedule charge. This would be a false
savings since the medical provider was
not allowed to charge more than the
state fee schedule in the first place.
If your workers’ compensation losses are
averaging $350,000 per year in medical
payments, you could be paying fees of up
to $140,000. When comparing insurance
programs, that lower premium or
participation fee could easily disappear
by the higher medical bill review fees.
What makes insurance programs even
more difficult to compare is that most
insurers and captives don’t know or are
unwilling to tell you what criteria they
use for medical bill review fees.
This is where your insurance broker can
assist in understanding the complexities
of medical care management and in
finding the program that best meets your
needs. +
Eric Wokas has over 25 years of
experience as a risk management
consultant working for various major
property/casualty insurance carriers
including Continental, Zurich and
Gerling as well as Aon an international
insurance brokerage firm. While
working for insurance carriers and Aon,
Mr. Wokas provided workers comp and
general liability technical support in
areas of safety and industrial hygiene for
companies such as Akzo International,
Toys R Us, Formosa Plastics, Macys,
Trump Casinos and Sheraton Hotels.
He has designed and implemented
numerous engineering controls including
fall protection systems, noise reduction,
slip /fall prevention and less hazardous
chemical substitutions. At JGS Insurance
Mr. Wokas continues to assist clients in
development and implementation of
practical solutions in reducing risk.
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