MEETING MEDICAL PEOPLE BILL REVIEW WHERE FEES THEY NEED TO BE MET
BY : ERIC P . WOKAS , CSP ARM , RISK CONTROL CONSULTANT , JGS INSURANCE
Medical Bill Review Fees
The Hidden Policy Premium
Every business knows that accident prevention keeps your workers ’ compensation costs at a minimum . But when an accident occurs and a claim is made , what is the best method to maximize cost savings ? With medical bills comprising approximately 60 percent of workers ’ compensation claims costs , many third party claims administrators ( TPAs ) use managed care programs to control these costs .
Managed care programs consist of five major components : network strategies , pharmacy benefit management , clinical intervention , return-to-work strategies and medical bill review . As an insured , you would hope that the claims administrator ’ s managed care program would look out for your best interests as well as the carriers . After all , both the insured and carrier have the same interests — keeping claims costs to a minimum . However , this may not always be the case .
In this article , I will focus on medical bill review . The goal of medical bill review is to maximize savings by paying only the appropriate medical fees . A carefully calibrated program designed by workers ’ compensation experts can produce average savings of around 50 percent .
Claims adjusters begin medical bill review by eliminating medical provider bills prior to the “ formal ” bill review function . Usually , the bills are unrelated to the claim . In many cases , a claimant may have a pre-existing condition that requires non-work-related treatment . On average , 10 to 15 percent of medical bills are excluded in this way .
Once legitimate bills are identified , a fee schedule reduction is applied . Typically , this is an automated process using a software program that compares each medical bill procedure code and fee to the appropriate state fee schedules and rules . Each state has different fee schedules , codes and rules that enable bills to be reduced further . These fee structures are continually changing which requires continual software updates . However , about 15 to 20 percent of billing codes are not fee scheduled .
Contrary to popular belief , the review of fee schedules and rules is not standardized . These software programs are highly individualized among TPAs . One of the main differences is the preferred provider organizations ( PPOs ) the TPAs use . The PPOs have different negotiated fee rates with the medical providers . In many cases , the PPO rates are below the state fee schedule . In addition , the same medical provider may belong to several PPOs and have different rates with each of them .
Additional savings are possible through a more sophisticated level of evaluation called complex bill review . Complex bill review starts with alerts that flag certain charges . The flagged bills are then assigned to specialists such as physicians , nurses and medical coders . They
28