Are These 4 Cost Drivers Impacting Your Claims?
In-patient post-acute care is estimated to be a billion-dollar cost center within workers’ compensation. Despite the size of this spend, this area has remained largely unmanaged, non-standardized or networked in traditional ways. When it comes to injured worker admission to post-acute facilities, in the current process and even in states where workers' compensation payers can direct care, payers have had difficulties influencing and managing where injured workers receive rehab – from both a quality and cost perspective. The myriad of challenges begin the moment an injured worker is identified as needing an in-patient facility.
Understanding the Cost Drivers in Workers' Compensation
For appropriate facility placement, a recent study by the Agency for Healthcare Research and Quality, showed almost 4 million in-patient hospital stays were discharged to post-acute facility care (e.g. skilled nursing facility, in-patient rehab facility, long term care hospital.) Further payer analysis of the data estimated that, in one year, 36,000 of these post-acute facility stays were associated with workers’ compensation.
Ensuring proper care and insight for those 36,000 cases can be a daunting task. In developing our program, we identified the key cost and care drivers to be:
- Appropriate Facility Placement
- Compliance with State Regulations and Risk Mitigation
- Care Insights and Acuity Management
- Administrative Overhead
Let’s dig in to each of these areas a little more.
1. Appropriate Facility Placement
Hospitals and physicians refer injured workers to post-acute facilities based on a variety of factors. One Call’s In-Patient Facilities Solutions program, and separately the American Hospital Association (as outlined in “TrendWatch”), found physicians and hospital discharge planners frequently refer patients to facilities based on their “ease of use” experience and personal relationships rather than concretely based on specific care needs.
Because in-patient facilities are designed with overhead and costs factored in to allow them to care for patients with different care needs, it is common to find injured workers receiving care in an “over recommended” facility setting. While the care being provided is appropriate, the facility providing the care may have higher price points due to the nature of the higher skilled care they can provide.
2. Compliance with State Regulations and Risk Management
For in-patient facilities and workers’ compensation payers, we find ourselves dealing with 50 different sets of insurance and licensure requirements. Some states, such as Florida, set no requirement for the amount of insurance a facility must cover. When the hospital discharge planner or case manager makes a facility selection, they rarely consider this factor. A payer could be authorizing an injured worker to receive care at a facility with insurance coverage as low as $10,000. When a payer authorizes treatment at a facility with such low coverage, they may be opening themselves to liabilities that may be incurred during the stay.
Claims examiners often utilize state fee schedules as guidelines for reasonable and proper reimbursement. The unfortunate fact is that when post-acute facility fee schedules do exist, they typically only address certain portions of treatment, often allowing providers to bill at hospital fee schedules or to bill “By Report” – meaning there is no set fee schedule resulting in the facility billing standard rates. PPO models then typically apply a 15% discount to the billed charges.
A payer may be in full compliance with state guidelines – but still pay too much for the in-patient stay because of an over-recommended facility and/ or inappropriate utilization which lengthened the stay duration.
3. Care Insights and Acuity Management
It is not uncommon for payers to utilize nurse case managers to assist with facility placement and negotiations, their clinical expertise can provide helpful insights and practical solutions to assist with cost containment and ensuring appropriate care. However, a very specific skillset and expertise is needed to proactively address the complexities of in-patient care within workers’ compensation. Even with advanced skillsets, few case managers, or adjusters, have the time required to investigate and evaluate the amount of non-clinical information a proactive management program would require, leaving claims vulnerable to increased costs and other complications.
In-patient rehab providers and skilled nursing facilities are not consistent in providing medical updates, documentation, or requesting authorization for additional services because the model is set up for Medicare and Medicaid payers who do not require written or regular updates, medical notes on a frequent basis, and do not require the same authorization protocols for additional services as workers’ compensation.
Without a written arrangement with these organizations, facilities follow Medicare protocols for admission and duration which leaves workers’ compensation payers reacting to other requests rather than managing coordinated care transitions.
4. Administrative Overhead
Adjusters and nurse case managers are already overtasked with a case load that requires them to account for complexities well beyond day-to-day injured worker care, and attempting to manage unfamiliar facilities administratively, financially, and clinically, multiplies their work load and organization requirements for these types of cases.
From multiple and prolonged phone calls or a nurse traveling onsite to the facility to visit an injured worker, case managers can spend extra hours on a single file, which may limit their bandwidth to follow up on all of the other necessary aspects of their cases. Sometimes a facility will ask an adjuster or case manager to sign a letter of agreement to guarantee reimbursement prior to admission which may seem like a great convenience. However, they often tie payers and claims professionals to a fixed amount for the entire length of stay and may include many exclusions that allow facilities to bill for non-covered items and services.
Finally, while an injured worker is in the facility, facilities have little incentive to transition the injured worker to a lower level of care and associated lower price point. This can be evidenced in a review of invoices where facility billings often reflect the same level of charges on the last day of their stay as they did on the first day of the stay.
One Call’s Solution
One Call’s solution ensures injured workers are placed at appropriate facilities where they will receive the right care, for the right length of time, at the right cost, and continue with a seamless transition to the next stage of their rehabilitation. We leveraged our network of payers, purchase power, and relationships together to create the In-Patient Facilities SolutionsSM program – one of our most innovative healthcare cost containment efforts in our history.
Want to find out how One Call's In-Patient Facilities Solutions program can save you time and money?