Plugging the Leak

For workers' compensation payers and self-insured employers, one of the most costly types of claims leakage occurs when the decisions made during the utilization review (UR) process cannot be matched to the bills for those services.

Utilization review is the process of checking proposed medical treatment plans to determine if they are medically necessary and appropriate to the condition of the injured worker. UR evaluates the medical provider's prospective plan, the duration of care and the scope of services in light of the specific injury and other claim and patient factors.

Most managed care programs incorporate moderate to robust UR programs, customized for their needs and the needs of their clients' companies. While UR programs are customized to the payers' requirements, workers' compensation laws add a level of complexity to the process based on mandated, state-specific requirements to which utilization review programs must adhere.

"Trigger" lists can be created on a state-by-state basis to identify the services that can typically benefit from UR. Currently, utilization review is on the rise for services that are increasing in frequency and cost and that lack evidence of deep value in the course of rehabilitation, such as pain management programs, use of opioids, and the overuse of injections. Payers take differing approaches in dealing with UR infractions by health care providers, hospitals and facilities; therefore, great flexibility is needed in order to allow the payers to do bill review "their way."

Bill review is another accepted practice to better manage costs by ensuring that appropriate payments are made for health care provider services. Traditional bill review services check that each bill is paid in accordance with the proper fee/UCR schedule and that the bill is subjected to the right PPO networks or negotiation processes to ensure the paid fee is at a fair or market rate.

The disconnect between UR and bill review has historically been a source of significant financial and operational leakage because of the inability to consistently match the UR decision with what is recommended for payment in the bill review process. The barrier to making the connection has been the lack of a robust, integrated platform that reads and configures all the data for proper matching between the UR-approved treatment and the one that's in the bill review system, including the current bill being reviewed and the bill history for the claim.

Even a robust UR and bill review system may still be unable to be integrated—or to be integrated well enough—to fully automate this matching process accurately and consistently. Without an effective technology solution linking utilization review to the bill review platform, payers often compensate for billed procedures that were denied (or not approved) during the UR process. Consequently, bill review fails to flag the charges for unapproved services that would be identified by effectively integrating utilization review data during the bill review process. In addition, the millions of dollars that payers spend on utilization review—evaluating the medical necessity of procedures, inpatient hospitalizations, and other treatments—is wasted. This waste of resources occurs simply because it is not possible for IT systems to consistently make the connection between the bill, provider, claimant and UR decision.

There are very few bill review systems that are fully and seamlessly connected with medical management systems and processes, such as utilization review, pre-certification, case management or provider networks. Most systems capture their UR information in a narrative form, in text or in free-form fields. However, computers cannot make use of this file format and can't match the bill review and UR data. Furthermore, because payer UR systems are customized and highly diverse and state regulations are so variable, integration is even more difficult. As a result, the costly, meticulous process of obtaining UR decisions fails to achieve its objective because the decisions were not applied in the bill review process.

New solutions have been developed that stop this leakage and replace it with automated matching of UR determinations and provider bills, including the application of client-directed rules for handling situations in which UR decisions and submitted bills don't match, and allowing for automated straight-through bill review. The systems work by grouping related procedures and codes together so that the bills can be easily and automatically matched with the UR decisions that were made. If the codes match, the bill is paid automatically. If there is not a match, the bill is appended as an exception.

Introducing true automation into the UR-bill review matching challenge is the key. The software obtains an automated feed of UR decisions. The feed of data is then analyzed by a rules engine that aggregates procedure codes into treatment families. For example, bills for physical therapy, approved during utilization review, may contain line items such as ice packs, exercise and the application of electrical stimulation. These entities are grouped together because they are modalities or procedures implemented within a physical therapy session, giving the bill reviewer the ability to expedite recommendation for payment for all services as a result of the UR feed.

The UR decisions are imported into the bill review application database and stored with the detail related to the approved treatment, including the date of service range, code range, category of treatment, number of approved/denied visits and service/visit metrics. By grouping procedure codes into a treatment group according to a specific type of treatment, codes can be automatically compared and matched. Instead of one-to-one or individual bill line items, the software does the "thinking" that determines if the procedure billed fits with what was approved in UR. Consequently, the laborious line-by-line manual comparison is replaced with straight-through processing, delivering significant productivity increases.

With the automated feed of utilization review decisions and an automated matching process, payers can auto-adjudicate bills and individual services that, up until now, had to be handled manually. The system also has the flexibility to incorporate client-based directives into the business rules. Examples of these client-based directives might be instructions on handling a claim in litigation, highlighting specific providers who overuse services, or allowing an extension beyond dates of service in certain situations.

The key to making this enhancement work is the overall flexibility and capability of the technology platform to break information down by service and state, and then to match the codes correctly. This flexibility extends to being able to:

Payers have different approaches regarding the handling of these situations. Customized decisions should be part of the business rules for each payer.

Payers that take advantage of this automated integration will benefit from a significantly more efficient claims process, straight-through utilization review decision matching, reduced staffing requirements and, perhaps most important, the assurance that only approved treatments are paid. By plugging this leakage between bill review and utilization review, payers realize the investment they have made in UR. When there is no match between UR and the bill under review, the payers' own customized policies covering how they want to deal with this situation are automatically applied.

Erika James is vice president of Client Services & Strategic Partners, and Mary Ellen Szabo is senior manager of Managed Care Services for Mitchell International's Workers' Compensation Solutions division.