Property Casualty 360, USA: Cognizant’s Clinical Services and Insurance Experts Say Informed Claims Management Helps Workers’ Comp Payors Stay Profitable

Chris Daniel, Director, Global Clinical Services, Cognizant, and Ajoy Kumar Palanivelu, Associate Director, Insurance, Cognizant

“The squeeze on workers’ compensation costs has been dramatic, with medical benefits on lost-time claims tripling since 2003, according to the National Council on Compensation Insurance (NCCI),” writes Chris Daniel, Director for Cognizant’s Global Clinical Services practice, in an article co-authored with Ajoy Kumar Palanivelu, Associate Director for Cognizant’s Insurance practice. “Informed claims management can help ease the pressure. The use of data access and standards provides structure that enables payors to better manage costs while delivering improved service to injured workers and their employers.”  Excerpts:

“With informed claims management, payors such as carriers, TPAs or self-insured companies, can tap into pooled information and databases that are widely available and easily shared. They also gain newfound access to data such as processed medical bills that many have gathered but had limited opportunities to use.

The use of data and standards helps create the checks and balances payors need to provide quality service while containing costs. Four strategies to assist companies in reaching that goal, include:

Adopt evidence-based medical guidelines. Adhering to treatment guidelines significantly lowers stakeholders’ costs and closes cases faster, according to new research from Johns Hopkins University and Accident Fund Holdings. With its empiric support for the use of evidence-based guidelines, the research will likely fuel their continued adoption, a trend already well underway as more state regulatory bodies embrace their own guidelines or those from ODG and the American College of Occupational and Environment Medicine (ACOEM).

Implement medical necessity reviews (MNRs) for all claims. Data-driven, evidence-based guidelines make wider use of MNRs financially feasible. MNRs are an important tool so payors can stop claims leakage, or the difference between the amount paid and the amount that would have been paid had best practices been applied.

Rethink your approach to medical expertise. Although it seems counter-intuitive at first, incorporating more medical expertise can limit medical costs without increasing claims allocated loss adjustment expenses. Growing acceptance for global delivery models is also driving payors to reconsider how they put clinical insights to use.

Improve medical provider profiling. Adopting evidence-based guidelines and implementing more MNRs provides payors with a world of new data to access, including statistics on treating physicians. By mining data sets to rank providers in terms of performance, workers’ comp payors can determine which medical providers follow established treatment guidelines and produce the best outcomes for injured workers.

Despite the sliver of relief in NCCI’s recent projection of a one percent decline in medical severity for 2015, it is likely that medical severity will continue its march upwards. Informed claims management provides workers’ comp payors with a strategy to contain costs — and stay profitable.”

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