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Industry Trends
ReportBy Shahin HatamianVice President, Product Management and Strategy, Casualty Solutions Group, Mitchell
Five Qualities of an Effective Business Workflow Solution
FEATURED IN THIS ISSUE
Volume Five Number Three Q3 2016 Published by Mitchell International
Industry Trends
ReportTable of Contents
Volume Five Number Three
4 70 Years of Supporting Our Clients and Their Important Work An Interview with Alex Sun on Technology Trends
12 Quarterly FeatureFive Qualities of an Effective Business Workflow Solution
20 Bonus Features Break Down Traditional Bill Review Procedures Make a Bigger Impact on Third Party Auto Claims
28 WCS Medical Price Index
34 ACS Medical Price Index
38 Compliance Corner
42 Current Events
43 Partner Spotlight
44 About Mitchell
45 Mitchell in the News
A Message from the CEO
What’s Trending in Technology?
Welcome to the Q3 edition of the 2016 Mitchell Casualty Industry
Trends Report. As you know, we are celebrating our 70th anniversary
this year. In the last issue I shared some of my thoughts around how
the company has evolved throughout the years and where we’re
headed next. This quarter, I’m excited to share some of the current
and emerging industry trends I’m following. There are so many
interesting things happening in technology today, and it’s fascinating
to see the impact and opportunities they will bring to the insurance
industry down the road.
In this issue, we have several articles from our in-house experts that
look at additional ways organizations can approach challenges in
our industry for better business results. First up is our feature article,
Five Qualities of an Effective Workflow Solution, by Shahin Hatamian.
Shahin explains how these qualities can help companies that process
medical bills outperform their goals and differentiate themselves
from the competition. Shahin also emphasizes the need for insurers
and third party administrators to tailor workflow solutions to their
individualized business needs.
Our bonus articles this quarter include an analysis of traditional bill
review procedures and detail how specialty bill review can achieve
better results. We also discuss the current state of third party claims
and a few recommended methods to contain the associated costs.
As I finish up the second half of my interview for this issue, I’d like to
take a moment to remind you of how important you are to Mitchell.
We certainly wouldn’t be here today without you, and I’m excited
for what we can achieve together in the years ahead. Enjoy the rest
of your summer, and thank you for your continued readership of the
Industry Trends Report.
Report.
Alex Sun President and CEO Mitchell
Q3 2016
Alex Sun President and CEO, Mitchell
View the Auto Physical
Damage Edition
evolved is through the adoption of technology.
We’ve come a long way since our manuals were
printed on paper—and the current explosion
of both available and emergent technologies
promises further change and opportunity.
Mitchell was founded in Glenn Mitchell’s garage 70
years ago. The world has changed a lot since 1946,
and Mitchell has evolved right along with it. While
remaining true to our roots in collision repair, we’ve
expanded our reach into auto physical damage, auto
casualty, workers’ compensation, out-of-network
solutions, and now pharmacy. Another way we’ve
years of (m)powering better outcomes
70 Years of Supporting Our Clients and Their Important Work
Alex Sun, President and CEO
As we look toward the future, we anticipate
ongoing evolution, but here’s what will remain
the same: we’ll continue to focus on technology,
expertise and connecting to bring additional value
to our clients. We’ll also continue to support the
important work they do by focusing on empowering
better outcomes.
As part of our ongoing celebration of our 70th
anniversary, we asked President and CEO, Alex Sun,
about some of the technology and trends that are
not only changing the world we live in, but also
having an impact on both insurers and
collision repairers.
Read part II of our 70th anniversary interview.
Another way we’ve evolved is through the adoption of technology.
pilot ways to leverage these types of technologies,
marrying them with the vast amounts of data
we captured in our systems to drive either better
decisioning, or using machines to automate tasks
that may have historically been done by individuals.
And the third trend I’m seeing is the focus on the
digital consumer experience. Insurance, generally,
is a very competitive marketplace. One area where
many carriers, particularly on the personal lines side,
are beginning to focus as a point of differentiation is
on creating interesting consumer experiences. This
encompasses everything from how they quote, to
how they manage their daily interactions, to how
they handle a claim. With the ubiquity of mobile
smartphones and increased access to broadband,
we’re beginning to see clients embracing major
digital consumer initiatives.
Other things that are impacting the insurance
industry, both in favorable ways and in ways that
need to be considered as they relate to future
business models, are technologies like the Internet
of Things—whether that’s the connected car,
the self-driving car or nanotechnology related to
healthcare. These are part of a spectrum of new
technologies being deployed that will not only
affect how customers expect to be interacted with,
in terms of either buying insurance or having their
claims handled, but also how companies themselves
will operate.
What technology and trends are you following that you anticipate will have an impact on the P&C industry?
There are a number of big trends that are affecting
the entire industry. The first is a general recognition
that in order to remain competitive you need to
have the right technology infrastructure to do
so. Many insurance companies across all lines
of coverage are beginning to go through very
large scale technology transformations, starting
with either their claims systems, their policy
administration systems or their billing systems.
The intent is to create a unified, scalable and
extensible environment so they can create new
experiences and new capabilities for reaching out to
their customers and managing them.
A second major trend that is really just starting to
emerge, is we’re all beginning to recognize there is
real, tangible, practical use for things like machine
learning or artificial intelligence. We’re beginning to
Many insurance companies across all lines of coverage are beginning to go through very large scale technology transformations.
3 Key Trends Impacting the Insurance Industry
1. McKinsey.com http://www.mckinsey.com/business-functions/organization/our-insights/six-building-blocks-for-creating-a-high-performing-digital-enterprise 2. Deloitte.com http://www2.deloitte.com/global/en/pages/technology-media-and-telecommunications/articles/tmt-pred16-tech-cognitive-technologies-enterprise-software.html3. McKinsey.com http://www.mckinsey.com/industries/financial-services/our-insights/the-growth-engine-superior-customer-experience-in-insurance
Watch the video of Alex Sun discussing what trends he’s following closely.
3 Key Trends Impacting the Insurance Industry
MachineLearning
ConsumerEngagement
TechnologyTransformation
90%—the amount
cost performance can
improve over time by
scaling across siloed
functions and reducing
redundant processes.
95—the number of the world’s
100 largest enterprise software
companies by revenues that
will have integrated cognitive
technologies into their
products by 2020.
80%—the probability
that satisfied customers
are more likely to
renew their policies
than unsatisfied
customers.
90%
95 80%
1. Ducker Worldwide. (2015). Metallic Material Trends in the North American Light Vehicle. Accessed online Aug. 3, 2016.2. Ducker Worldwide. (2014). 2015 North American Light Vehicle Aluminum Content Study. Accessed online Aug. 3, 2016.
What trends are top-of-mind for you in auto physical damage?
On the auto physical damage side, there are a
number of external pressures affecting collision
repair shops that are creating an incredibly complex
operating environment. These trends are causing
them to seek more sophisticated technology
solutions to operate efficiently and meet the
demands of OEMs, insurance companies and
consumers.
First off, advances in automotive manufacturing—
the incorporation of more sophisticated materials,
technology and safety features—are making it even
more complicated to repair a vehicle today. And it
raises the question, for the first time in a decade or
so, of whether or not cars are being repaired safely
and correctly. So not only is it extremely important
for repair shops to have access to the information
they need to repair a car and certify that it was
repaired correctly, it also increases the burden on
them to invest in both training for their staff and
new equipment.
The Changing Face of Automotive Materials
90%+
26%+
Advanced High Strength Steel
Aluminum
The projected percentage of body and closure parts for light vehicles in North America that will be made of aluminum by 2025 (measured by volume rather than weight).2
The projected percentage increase in the use of advanced high strength steel in light vehicles in North America between 2014 and 2025.1
Insurance companies, for their part, are becoming
increasingly reliant on collision repair partners in
their vehicle repair programs to manage more
administrative and customer service-oriented tasks
like estimating, coordinating vehicle rentals and
ultimately, doing whatever it takes to get an owner
back into their vehicle.
In addition, many insurance companies are focused
not just on the safety and quality of a repair, but
also on the timeliness of the repair process. This
puts significant pressure on the collision repairer
to make sure they can perform their work not only
cost efficiently, but also on a timely basis, and with
regular status updates. As a result, collision repairers
are looking to leverage technology to do things like
streamline parts procurement and manage client
scheduling.
Lastly, consumers are driving another big trend
that is affecting collision repair shops—and really
operators of any small business. More consumers
are looking for outside information sources to aid
them in making decisions on what collision repair
shop to work with, and social media is increasingly
influencing this decision. I believe now more than
ever, collision repairers are going to need to be
smart about how they leverage social media and
their presence on the web in order to position
themselves for success.
Today, we’re really focused on the technologies
collision repair shops need to adopt to allow them
to operate more efficiently, especially with all the
increased demands placed on them by OEMs,
insurance companies and consumers—as well as the
changes in what is required to deliver a safe repair.
Today, we’re really focused on the technologies collision repair shops need to employ to allow them to operate more efficiently.
The Changing Face of Automotive Materials
1. ISO Fast Track data2. –4. Mitchell data
Are there any trends specific to auto casualty that you are following?
One trend that’s having a big impact on auto
casualty insurers is that both frequency and severity
continue to rise. Cost containment solutions that
address these issues are top of mind both for us and
for our clients.
On the first party side, we continue to look for
ways to adapt elements of a managed care cost
containment model to a non-managed care setting
in order to drive more efficient, accurate claims
outcomes. Whether we’re focusing on provider
networks, out-of-network discounting capabilities,
out-of-network pricing capabilities, nurse review,
or even pharmacy, we’re really taking a lot of
the concepts that have evolved in the managed
care world and adapting them for use in the auto
casualty model.
On the third party side, there’s been about a
12 percent increase in bodily injury claims costs
over the last five years. The average use of medical
services is up about 18 percent, and many injuries
are becoming more expensive to diagnose and
treat. As a result, our insurance carrier clients are
operating in an environment in which, more than
ever, they need to keep third party claims costs
in check.
At the same time, the adjuster workforce
demographics are starting to change. Many
seasoned adjusters are now reaching retirement
age, so there is a loss of expertise in an extremely
complex space. It’s becoming imperative for the
insurance industry to adopt technologies that allow
them to codify in a system the best practices of their
third party adjusters. That’s a big focus point for
us—it’s a problem we’re really working to solve.
The Rising Cost of Third Party Claims
18%
36% 15%
11%Claims costs over the last five years
Claimants with nerve or disc injuries over the last five years
Average charge per claimant with nerve or disk injuries over the last five years
Frequency of use of medical services over the last five yearsIncrease Increase
Increase Increase
For more industry insights from Alex and other Mitchell leaders, follow us on LinkedIn
and read our corporate blog.
What trends are you seeing in workers’ compensation?
The workers’ compensation market has been
dynamic for quite some time, due in part to the
recession. It’s further complicated by an equally
dynamic market on the healthcare delivery side.
The consolidation that’s taking place with health
insurers, health systems and managed care
organizations—and, of course, the implementation
of the Affordable Care Act—are all contributing
factors. Despite a small decline in the volume of
claims, we’re continuing to see rising medical
care costs.
Another trend that is contributing to this dynamic
environment is the dramatic rise in opioid abuse.
In fact, there were a record number of drug-
related deaths in 2014, and 61% of these were
caused by opioids. This prompted the CDC to
issue new prescribing guidelines earlier this
year. Many states and organizations such as
the Work Loss Data Institute that publishes the
Official Disability Guidelines are also tightening
their recommendations to keep patients safe
and curb the threat of addiction. Because of
these factors, we’re seeing an increased focus on
pharmacy benefit management as a way to more
appropriately manage the distribution of opioids
and to keep claimants safe and on the road to
recovery.
As a result of these trends, it’s become even more
important for our workers’ compensation clients
to focus on enabling technologies that allow them
to operate their organizations more effectively
and efficiently. Our clients are looking to use
technology to more tightly integrate with the
other service providers and partners they interact
with throughout the claims resolution process.
They’re also looking for ways to leverage data that
is captured in the use of these technologies, in a
way that gives them greater insight into cost drivers
and helps them deliver better outcomes for their
organizations and their claimants.
It’s become even more important for our workers’ compensation clients to focus on enabling technologies that allow them to operate their organizations more effectively and efficiently.
1212
Five Qualities of an Effective Business Workflow Solution
No two payors are the same, so their business
workflow solutions shouldn’t be identical either.
Every insurer or third party administrator knows
their business best and needs a workflow solution
which adapts itself to their unique business priorities
and rules. Now learn the five qualities that make a
business workflow work for your business.
1) Customizable and FlexibleWhyIt’s important for companies to be able to optimize
their workflow to their own specific requirements
since every business has different needs. Businesses
shouldn’t be limited to a “one size fits all” model. A
workflow, or a set of business processes that work
together, should be customizable so each business
can create a process order that works best for them.
For example, each company should be able to
decide at which point in the workflow business rules
should be triggered, when bills should be routed for
nurse review and adjuster authorization and when
to pend and transmit bills for preferred provider
organization repricing. Insurers, TPAs and managed
care companies shouldn’t be limited to one static,
pre-defined process that mandates one process -
bills go through bill review, then trigger rules, then
go to the PPO network. Decision makers need to
have complete control over what happens to a bill
after it gets imported into the system.
Quarterly Feature
Decision makers need to have complete control over what happens to a bill after it gets imported into the system.
By Shahin Hatamian Vice President, Product Management and Strategy, Casualty Solutions Group, Mitchell
13 Quarterly Feature
HowIn combination with the workflow solution, the
rules engine should allow for complete flexibility
in creating business rules in order to get the best
outcomes. The rules engine should be separate from
the application logic, giving more control to the
business user. The engine should be robust enough
to allow the user to modify rules as the user requires.
This ensures the workflow more closely aligns with
the company’s internal guidelines and goals.
A large part of having a customizable workflow
solution is being able to update it quickly and easily.
This includes being able to update business rules
within the rules engine in an efficient manner. A
rules engine is not as valuable if a company has to
contact an external vendor to request rule changes
every time it needs a rule modification. This type of
approach may take weeks and can be an expensive
process.
To help solve this problem, the rules engine must
be easy enough to setup, learn and use so that an
employee without a development background
could master the knowledge required to make and
edit rules with minimal training. If payors are able to
customize the workflow process to their needs, they
are better equipped to develop new ways to ensure
cost containment and improve efficiency.
ExampleInsurance Company A and Insurance Company B are
setting up their business workflows. In particular,
they are interested in making sure that their team
reviews all high-dollar inpatient hospital bills. It’s
also important to them that in their workflow
process, utilization review recommendations are
applied before the bill goes through the review
process. However, Insurance Company B may have
no downstream reporting requirements and may
set up their business workflow to have upfront
adjuster oversight since the bill may be denied and
will give their resources more time to process clean
bill edits. Both companies have their own specific
needs, but Company A and Company B should be
able to select a workflow process and rules engine
solution which is flexible enough to meet their
different business needs. If they are both able to
customize their workflow and write rules specific to
their needs, both companies are closer to meeting
their own business goals.
A large part of having a customizable workflow solution is being able to update it quickly and easily.
14 Quarterly Feature
BenefitsUsing a fully-customized workflow solution sets
customers up to produce the best outcomes and
gain an edge on the competition in the process.
By choosing a scalable and customizable workflow,
a company has a greater opportunity to take the
subject matter expertise of their best employees and
efficiently scale it across the business. If a company
can create rules that are tailored exactly to its
needs, they can see huge benefits in return. Expert
bill review employees can focus on adjudicating
more complex bills. Flexible and customizable
workflow and rules engine solutions enable insurers
and TPAs to have more control over the business,
reduce operational costs, write rules that align
with company objectives and improve employee
productivity.
2) Facilitates AutomationWhyWith the right automated process, adjusters don’t
need to review each and every bill. A workflow
that uses a rules engine can determine which bills
require an adjuster’s oversight and which bills can
be automatically adjudicated. When a rules engine
enables the setup of auto-adjudication within a
workflow, it allows the adjusters to focus only on
those bills that require an expert decision.
HowIdeal Automation RateAn efficient workflow usually passes through 60-70
percent of bills automatically. Though each business
might shoot for a different rate of automation, a
rules engine should allow them to reach this level of
efficiency if they choose.
A reliable workflow combined with an intelligent
rules engine creates a more effective way of
performing the bill review process. For example, by
establishing rules based on thresholds, treatment
codes or document type, bills can be presented to
adjusters only when their oversight is necessary. A
strong workflow should include business rules that
look for exceptions in the data.
This capability helps automate tasks that normally
required manual processing, and allow the
routing of bills to their required destination. Such
a combination of reliable workflow and a robust
rules engine can run items through the bill review
process faster, and more efficiently than a traditional
bill review product. It also can help minimize the
variances in adjudication decisions that may arise
from different skills and experiences.
ExampleIn order to maximize adjuster efficiency, Insurance
Company A doesn’t want employees spending any
time on bills that are under $50 or bills that include
physical therapy sessions.
The rules engine Insurance Company A uses should
let them specify these needs and let the identified
bills pass through without any human intervention.
So when a bill goes through the system for $40, no
employee time will be spent approving the payment.
Insurance Company A’s adjusters will then have
more time to focus on bills that do require their
oversight and can give more attention to claims that
need further negotiation and investigation.
By using a robust workflow and a rules engine that
gives Insurance Company A complete control to
decide which bills can be automated through the
system and which need to stop, the payor is able to
improve efficiency.
15
About the Quarterly Feature author…
By Shahin Hatamian, Vice President, Product Management and Strategy, Casualty Solutions Group, Mitchell
Shahin Hatamian leads the
Product Management group
and is responsible for product
direction, marketing, partnerships
and strategic initiatives for
Mitchell Auto Casualty and
Workers’ Compensation Solutions.
With over 20 years of high-tech
industry experience, Shahin has an
extensive and proven knowledge
of Product Development,
Marketing,Organizational
Leadership, Business Strategy,
Partnerships and Global Business.
Shahin holds an MSEE and an
MBA.
BenefitsAside from automating bills adjusters don’t need
to work on, an effective workflow/rules engine
combination drives down turnaround time.
Efficiency will increase, leaving adjusters more time
to focus on their core responsibilities.
Another benefit of process automation is that
it helps the payor stay compliant with timeline-
related service level agreements in order to submit
payments on time.
By making on-time payments, the payor can avoid
late-penalties in some states. A rules engine aids
in cost containment by checking that providers are
billing correctly and helping payors decide what the
correct amount is to pay on each bill.
3) Manages Multiple WorkflowsWhy
A good workflow model should make a complex
process easy. TPAs work in a complicated
environment because they manage multiple unique
businesses that have different requirements and
goals. It can get complicated to operate separate
workflows for each of their clients. As a result,
sometimes TPAs can only offer a single business
workflow process across all of their clients, meaning
each organization cannot set its own guidelines.
How
TPAs should have a simple way to organize
workflows and rule sets separately for each
customer. This way, it’s easy for each TPA to
ensure they are applying the right business rules
and sending medical bills to the right destination
for each customer. Without an efficient way to
customize and manage multiple workflows and
multiple sets of rules, TPAs may lose out to more
sophisticated competitors.
Quarterly Feature
16 Quarterly Feature
Solutions that cannot manage multiple
customizable workflows and rule sets often cause
companies to have to employ more resources and
lose out on efficiency savings.
Example
The model that TPAs use should allow for bills to
pass through different workflows based on their
customer mix.
For example, the system should recognize that if a
bill comes from Company A, it should run through
Company A’s workflow, while a bill from Company B
should run through Company B’s workflow and a bill
from Company C should run through Company C’s
workflow.
BenefitsA system that easily manages multiple workflows
improves efficiency, reduces costs and simplifies
what could be a complex and confusing process.
It allows a TPA to offer a unique service to each
of its clients, thus differentiating itself from the
competition. Using such a system helps TPAs to
efficiently solve problems and produce better
outcomes than if they use a “one workflow fits all”
model.
4) Connecting to the Value ChainWhy
In order to maximize efficiency, a workflow should
not only work seamlessly within its own system,
but it should also easily connect to other parts of
the business. This scales up all of the advantages of
automation throughout the company.
How
Workflows can be complicated, and bills may get
stopped during the process, awaiting further action.
In order to streamline the process, a workflow and
its rules engine should be connected with other
parts of the business. For example, a bill shouldn’t
leave the bill review system just to get to a nurse
reviewer. If the workflow isn’t connected with the
nurse review platform, the business isn’t maximizing
its efficiency potential. Also, the workflow should
ABill
ABill
CBill
BBill
BBill
CBill
Bill Review
Bill Review
Bill Review Payment Print
Email Sent to Adjuster
NetworkNurse
Review
NurseReview
Network
Network
Payment
Payment
BusinessRules
BusinessRules
BusinessRules
BusinessRules
BusinessRules
BusinessRules
Adjuster Approval
Adjuster Approval
17
be connected to an alerting system for people
who work on bills. An adjuster or nurse reviewer
shouldn’t be required to constantly check the system
to see if there are bills that require attention and/or
further action. Employees’ time can be utilized more
efficiently when the workflow is set up to alert when
it sends a bill out for review.
Example
Insurance Company A always wants to keep an eye
on any closed claims that are being reopened. In
order to keep those costs under control, it requires
that either Joe or Mary look at any new bills that
come through the system that are related to a claim
that has already been closed. Both Joe and Mary are
very busy, and they don’t have time to continuously
check the system to see if there are bills to review.
If Insurance Company A has a workflow and a
rules engine that are connected externally, this
won’t be a problem. It will be able to create a
rule that says: “If a bill is related to a closed
claim, email [email protected]
and [email protected] for review.”
Now, Joe and Mary are able to spend less time
manually checking the system and more time
working on their other duties.
Insurance Company B frequently uses nurse
reviewers, but has noticed that often, nurses’
recommendations aren’t being applied during the
bill review process. Insurance Company B uses a
homegrown workflow system. It’s losing money
on every bill since nurse recommendations are
not being applied, all the while the company is
still paying for the nurses’ time. Once they realized
the problem, Insurance Company B switched to a
workflow solution that integrates with their nurse
review platform. Now, the nurses’ suggestions are
automatically applied to every bill when it goes
through the company workflow. By switching over
to the robust, enterprise-grade solution, Insurance
Company B is taking better control of its medical
spend and improving efficiency within the nurse
review and bill review process.
BenefitsBy integrating the rules engine with other
departments and parts of the business, bills get
processed more efficiently. It keeps everything in
one place, making it quicker and easier for a medical
bill to be sent through the system. This ultimately
keeps costs low and saves employees time. Also,
when a workflow is capable of alerting an employee
that a bill is awaiting his or her review, it benefits
the company in two ways. First, it allows employees
who audit bills as a small part of their job to focus on
other tasks when there isn’t work waiting in his or
her queue.
If they know they’ll be alerted every time a bill
requires their attention, then they don’t have to
worry about constantly checking in. Second, alerting
the employees involved in the workflow speeds up
turnaround time and minimizes the chance of a bill
pending for an employee to route it to the next step.
Connecting the different steps within a workflow
with other parts of the company business is an
important part in running a productive business.
An adjuster or nurse reviewer shouldn’t be required to constantly check the system to see if there are bills that require attention and/or further action.
Quarterly Feature
18 Quarterly Feature
5) Powerful & Always ImprovingWhy
A powerful workflow is one that can help
companies learn and evolve over time to help
improve business outcomes. The workflow and
rules engine should be powerful enough to meet
just about any business need a company could
have. The workflow shouldn’t be restrictive, but
instead, it should empower a business to improve its
efficiencies and processes. The rules engine should
automate the routing, assignment and tracking of
work tasks. It should allow payors to create various
types of rules, such as decisioning rules, declarative
rules that compute values, transformation rules
that map and parse data and integration rules that
determine the correct system connection to make in
each circumstance.
How
One factor that makes workflow modelers and rules
engines powerful is the business value it generates
for customers. A commercial-grade rules engine
or workflow that’s processed hundreds of millions
of transactions over its lifetime can provide a lot
of value to a business and is an ideal candidate for
payors selecting workflow solutions. An important
way a rules engine can continue to add value to
a business is by giving decision makers workflow
process suggestions and rule modifications that
they can use to improve their business outcomes.
It should also be easy to measure the power of a
workflow. The financial and operational benefits
of a customized workflow and rules engine should
be easily determinable. For example, if a bill was
reduced by a fee schedule ground rule, a user and
a custom business rule, all three savings categories
should be available for impact analysis. The ability
to run this type of analysis is also important in
evaluating the financial and operational benefits
that a rules engine can provide. Workflows and
rules should be able to evolve over time to continue
improving financial and operational benefits.
Example
A powerful, mature, dependable and smart
workflow allows payors to use it with confidence.
Companies should be able to easily customize the
workflow to flag bills an employee needs to review
and alternatively, pass through bills the company
decides adjusters don’t need to see. A commercial-
Business Rules Business Rules Business Rules
Business Rules
Business RulesAdjuster Approval
Adjuster Approval
Finalize
Finalize
Payments
Payments
Finalize
FeeSchedule
FeeSchedule
FeeSchedule
Networks
Networks
ExternalRules
Auto Adjudication
Impact Analysis
Turn Around Time
Automated Savings Rate
75%
1.9 Days
55%
19
grade rules engine gives companies an unlimited
amount of opportunities to make specific business
decisions resulting in improved efficiency and better
business outcomes and providing both financial and
operational benefits.
Benefits
A powerful, mature, dependable and smart
workflow allows insurers to use it without worries.
Companies should be able to easily customize
the workflow to flag bills an employee needs to
review and pass through bills the company has
decided adjusters don’t need to see. A commercial-
grade rules engine gives companies an unlimited
amount of opportunities to make specific business
decisions resulting in improved efficiency and better
business outcomes and provides both financial and
operational benefits.
SummaryWith today’s continuous goal of achieving cost and
quality effectiveness, the flexible and customizable
rules engine has become an integral part of
an efficient business workflow system. When
a workflow is powerful and flexible enough to
adapt to any business need, it can automatically
produce better outcomes and can help companies
that process medical bills outperform their distinct
business goals while differentiating themselves from
their competition.
Quarterly Feature
2020
Payors often fall into a pattern of sending their
workers’ compensation medical bills through
the same process they always have, and are
consequently getting the same results they’ve
always gotten.
Now, a few payors are catching on to a new,
innovative trend of switching up their cost
containment methods to achieve better results—
using specialty bill review (SBR) before traditional
networks in their bill review process. Many times,
network discounts aren’t robust, meaning that by
only sending medical bills through the traditional
network route, some payors are overpaying on
medical bills. SBR is already the highest yielding
solution applied to a medical bill set. By positioning
it in different places in the workflow stack and not
confining themselves to one traditional bill review
order, payors are seeing even better results through
improved savings, specifically on facility bills.
What is Specialty Bill Review?SBR is a service that helps provide additional cost
containment above and beyond the traditional
bill review method. As a differentiated “specialty”
solution, SBR identifies and corrects issues not
captured by traditional bill review systems,
like coding errors, bundling redundancies and
misapplied policies, using repricing algorithms
By Greg Gaughan Vice President and General Manager, Out of Network Solutions, Mitchell Casualty Solutions Group
By Joshua Dickerson Director of Product Management, Out of Network Solutions, Mitchell Casualty Solutions Group
Break Down Traditional Bill Review Procedures
Bonus Feature
Positioning SBR higher in the stack is easy to do if your bill review engine allows for flexibility and customization and doesn’t require one specific workflow.
21 Bonus Feature
After the review process, the CVA service reduces
invalid and inappropriate charges to help ensure
payors are only paying for necessary charges on a
medical bill.
After review, an SBR service should recommend a
payment at a rate that’s about 35 percent of the
original bill charge, on average. Once the payor then
offers the payment to the provider, the SBR vendor
should manage and resolve any issues that arise on
the payor’s behalf.
and methodologies based on historical negotiation
data and state standards for payment. Payors
traditionally use SBR to calculate a fair and
reasonable price on medical bills when they don’t
already have an agreement with the provider.
Two different components make up SBR services –
market value pricing (MVP) and charge validation
analysis (CVA). Market Value Pricing is the service
that’s most commonly used by payors who use SBR.
The MVP service analyzes bills line-by-line in an
effort to determine a fair value for medical services
performed, since many times, items such as implants,
devices or drugs don’t reflect the appropriate
pricing. By using rules-based technology based on
jurisdictional case law and legal benchmarks for
charge limitations combined with technology that
searches and analyzes different aspects like accepted
payment comparisons, the MVP service is able to
determine the fairest price on medical bills.
Payors typically use CVA, the other component of
SBR, to help catch invalid charges. The CVA service
uses automated evaluation technology to identify
inappropriate charges through an intensive review
for line item and coding accuracy. During the
review, CVA looks for errors like charges for items
and services that weren’t provided, charges that
are undocumented or unrelated, and treatment for
injuries or illness caused by the facility or provider.
After the review process, the CVA service reduces invalid and inappropriate charges to help ensure payors are only paying for necessary charges on a medical bill.
22 Bonus Feature
Traditional UseTraditionally, SBR has been reserved for medical
bills that are out of network. Payors usually set up
their workflow so that medical bills are sent through
traditional networks before sending any that didn’t
receive network discounts through the SBR process.
For example, a payor will send all of its medical bills
through their network and pay the contracted rate
on in-network medical bills and send the remaining
medical bills through the SBR process for a reduced
rate. In this method, the majority of medical bills are
sent through networks and only a small portion of
medical bills go through the SBR process.
Throwing Out the Original MethodSometimes, network discounts aren’t enough.
Though networks provide discounts on medical bills,
many times these rates still aren’t the best prices
available for payors. Though many payors choose to,
it’s not necessary to lead with network options first.
In fact, in certain jurisdictions, such as Arizona, New
Jersey, Iowa and Missouri, leading with SBR instead
of network options first produces even better
financial results, especially on facility bills.
A benefit of placing SBR in the primary position in
a payor’s stack is that the majority of medical bills
will go through SBR, meaning the highest yielding
solution will be impacting the most medical bills.
When a payor arranges their workflow like this, they
are able to achieve better cost containment than if
they are relying on networks to do the majority of
their medical bill reductions.
Positioning SBR higher in the stack is easy to do
if your bill review engine allows for flexibility and
customization and doesn’t require one specific
workflow. By simply using SBR before networks, a
payor can start seeing an average 33-40 percent
jump in savings and revenue, and will begin to pay
better pricing more consistently.
23 Bonus Feature
2424
In just one year, the average bodily injury claim cost
has risen about 4 percent, from $13,719 in 2014
to $14,280 in 20151. As medical costs increase,
claims costs increase as well. Since there aren’t fee
schedules applicable to third party injury claims, or
access to traditional Preferred Provider Organization
networks, payors need to look for other
opportunities to help contain these rising costs. As
bodily injury severity and utilization continue to
rise, many insurance companies are using a suite
of solutions including a few key cost containment
methods outside of traditional bill review to reach
the fairest price in the settlement of third party
claims.
What’s Happening in Third Party? Third party claim costs have been rising for quite
some time. From 2011 to 2015, bodily injury severity
rates have increased about 12 percent1. In addition,
we have seen utilization increase about 18 percent2.
These increases are due to several factors, including
rising medical costs, a higher frequency of surgeries
to treat injuries and more expensive diagnosis
procedures. These medical trends are having a direct
impact on third party claim costs.
The best way for payors to combat rising costs
across the third party auto casualty market is to
use a variety of cost containment services on both
represented and unrepresented claims. In addition
to bill review and demand package review services,
many companies would also benefit from using
nurse review and direct-to-provider negotiations as
a part of their third party solution suite.
Make a Bigger Impact on Third Party Auto Claims
Bonus Feature
By Norman Tyrrell Director, Product Management, Mitchell Casualty Solutions Group
By Jackie Payne Vice President, Medical Management Services, Casualty Solutions Group
The best way for payors to combat rising costs across the third party auto casualty market is to use a variety of cost containment services on both represented and unrepresented claims.
25
Direct-to-Provider NegotiationsNegotiating isn’t just for attorneys and adjusters. In
the third party auto market, insurance companies
should also be contacting a partner to negotiate
directly with providers on unrepresented claims
on their behalf. Many insurance companies don’t
use any cost containment methods on these
unrepresented claims, instead choosing to focus
their employee’s time on negotiating demand
packages for represented claims. Negotiation
services are an easy-to-use solution that won’t
add too much time to the third party workflow or
take up valuable adjuster time. By using provider
negotiation services with a prompt-pay model,
payors can often start to see benefits like reductions
compared to what they are currently paying, as
well as increased consistency throughout the
organization’s payments.
Companies that aren’t negotiating third party
medical bills are often paying providers on
unrepresented claims in full, since they don’t have
a strong cost containment methodology that they
use for these claims. By simply using a negotiation
service just like they would for first party auto or
workers’ compensation claims, companies can start
to quickly and easily see major improvements on
third party payments with minimal internal effort.
While many companies that do use direct-to-
provider negotiations keep their negotiations in
house, choosing to use a strategic partner is often
the most efficient and fruitful option. A partner is set
up to negotiate more accurately and efficiently than
adjusters can, since they are equipped with the right
tools and expertise. The strategic partner should
be using a combination of a proprietary platform,
expert negotiators and data from nearly every
provider in the country. If a negotiation service is set
up this way, it’s much more efficient than in-house
negotiations, and often produces much better
financial results. In addition, a partner can help free
up time for adjusters so they can focus on core tasks
instead of spending time calling providers. When
executed correctly, a strategic partner can often
secure an average price reduction of 20-50 percent
on each bill.
Negotiation services are a cost-efficient way to
manage rising third party claims costs in all 50
states. Typically, there is no investment required to
turn on the service, and insurance companies only
have to pay once they start receiving discounts. A
negotiation service is a low-cost way to improve
third party claim outcomes while streamlining an
insurance company’s operational workflows.
Negotiation services are a cost-efficient way to manage rising third party claims costs in all 50 states.
1. “Private Passenger Auto Loss Data and Trends, Multi-state.” Fast Track Plus™. 2016.2. Mitchell Data
Bonus Feature
26 Bonus Feature
Nurse ReviewAnother area for increased impact in third party
auto claims is the use of professional medical review
services. A nurse review service provides adjusters
with invaluable information to help them negotiate
successfully with plaintiff attorneys, which saves
insurance companies from overpaying on medical
specials. With bodily injury severity on the rise over
the past couple of years, many insurance companies
are turning to nurse review to help combat these
higher prices and overutilization of medical services.
Nurse review is most valuable when the service
employs registered nurses who are familiar with
trauma care and do a complete deep-dive review
of the claimant’s current medical record. A nurse
should personally look closely at all of the details of
the claim and medical records instead of just doing
a cursory review of the billing or using algorithms to
do the job for them. When the nurse review services
conduct their review in this manner, nurses are able
to pull out the most important information in the
medical record and the claim file and point to any
discrepancies in the type and course of treatment,
which can be used as negotiation points. When
discrepancies are noted, detailed negotiation points
can assist adjusters and defense attorneys with
settling the claim for significantly lower amounts.
Another key benefit to using professional nurse
review is that the review and negotiation points are
clear, concise and in a format that helps facilitate
negotiations. By receiving recommendations in
an easy-to-understand layperson’s explanation,
adjusters at all experience levels are able to not only
understand the situation, but also explain and rebut
key points with a plaintiff attorney more effectively.
The document should contain an overview of the
chronology of medical treatment starting with the
mechanism of injury and continuing through all
phases of treatment. The report should provide
detailed rationale to support their recommendations
making sure adjusters are prepared for the
sometimes difficult negotiation process. Along
with an easy-to-read format, a nurse review service
should also provide some training around how to
use a nurse review report to its maximum potential
and also include information around how to contact
the nurse reviewer with any questions that may
arise.
When a nurse review is executed correctly, it can
help insurance companies achieve significant cost
containment on third party claims. In fact, some
companies using nurse review have avoided paying
hundreds of thousands of dollars for treatments
that are completely unrelated to auto accidents.
Here’s one example: After a minor fender-bender,
a claimant had symptoms of chest pain that led to
a very costly workup and ultimately, open heart
surgery. The hospital bill alone was almost $200,000.
After a minor fender-bender, a claimant had symptoms of chest pain that led to a very costly workup and ultimately, open heart surgery. The hospital bill alone was almost $200,000.
27
Though the plaintiff attorney argued that the
claimant’s heart issues were a result of the accident,
the nurse who reviewed the case on behalf of
the insurance carrier found many details of the
claimant’s history that showed the conditions were
long-standing and pre-existing. The adjuster was
able to negotiate successfully that the condition was
unrelated to the auto claim, and eventually it was
determined that the insurance carrier would not
be responsible for paying for any of the treatments,
saving them from unnecessary payments.
By adding robust negotiation and nurse review
services into their third party solution suite,
insurance companies will be able to control costs on
both represented and unrepresented claims. These
services will not only improve adjuster efficiencies,
but will also better ensure that companies are
consistently paying the fairest price on third party
claims and result in improved financial results.
Bonus Feature
2828
The National CPI for All Services, as reported by the
Bureau of Labor Statistics, is presently 119.33 which
is down 0.11 percent in Q1 2016 since Q4 2015.
For the same period of time, Q4 2015 to Q1 2016,
the National Workers’ Compensation Medical Price
Index increased by 3.16 percent and presently sits
at 112.21. Since Q1 2006, the National Workers’
Compensation MPI has increased 12.21 percent
while the National CPI for All Services increased
19.33 percent.
• Charges associated with physical medicine
services experienced a 3.8 percent increase since
Q4 2015. This increase brings the total unit cost
change for physical medicine since Q1 2006 to
6.62 percent, significantly below the National CPI
for All Services reported by the Bureau of Labor
Statistics. Recall that the physical medicine MPI
is looking strictly at unit charge while holding
utilization constant. No significant changes in
technology to deliver physical medicine services
have been discovered that might influence the
unit charge of these services.
Workers’ Compensation Medical Price Index
WCS Medical Price Index
Since Q1 2006, the National Workers’ Compensation MPI has increased 12.21 percent while the National CPI for All Services increased 19.33 percent.
By Ed OlsenSr. Business Process Consultant, Mitchell Casualty Solutions Group
• Since Q4 2015, the unit charge of professional
services performed in the emergency room
setting has decreased 3.16 percent. Despite this
decrease, the index reflects an overall increase
in the unit charge of this service group of 49.53
percent since Q1 2006. The index value for this
service group has experienced intermittent
decreases since Q1 2006 on it steady drive
upward. It is believed that this is just another
temporary improvement.
• Contrary to the trend in unit cost of Major
radiology services seen in the auto casualty
market, the unit cost experienced by workers’
compensation claims for this service group
remains flat reflecting a 1.0 percent increase since
Q4 2015. This service groups’ current index value
of 98.4 remains 1.6 percent below the Q1 2006 .
• The unit cost for evaluation & management
services increased in Q1 2016, bringing the
workers’ compensation index to 129.73 from
128.66 in Q4 2015. Since Q1 2006, evaluation
and management unit charge has increased
to 29.73.
Bonus Feature29
30
0
1
2
3
4
5
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Mill
ions
National MPI
Total Units National MPI CPI All services
WCS Medical Price Index
National MPI
0
200
400
600
800
1,000
1,200
1,400
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Evaluation & Management MPI
Total Units National MPI CPI All services
Evaluation & Management MPI
0
10
20
30
40
50
60
70
80
90
100
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Emergency Room MPI
Total Units National MPI CPI All services
Emergency Room MPI
31
0
1,000
2,000
3,000
4,000
5,000
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Physical Medicine MPI
Total Units National MPI CPI All services
0
10
20
30
40
50
60
70
80
90
100
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Major Radiology MPI
Total Units National MPI CPI All services
60
80
100
120
140
160
180
200
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Emergency Room MPI
Workers Compensation CPI All services Auto Casualty
WCS Medical Price Index
Physical Medicine MPI
Major Radiology MPI
Emergency Room MPI
32
0
5
10
15
20
25
30
35
40
45
50
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Nerve Testing MPI
Total Units National MPI CPI All services
0
5
10
15
20
25
30
35
40
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Minor Radiology MPI
Total Units National MPI CPI All services
WCS Medical Price Index
Nerve Testing MPI
Minor Radiology MPI
33 WCS Medical Price Index
0
5
10
15
20
25
30
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Pain Management MPI
Total Units National MPI CPI All services
0
5
10
15
20
25
30
50
70
90
110
130
150
170
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
Thou
sand
s
Major Surgery MPI
Total Units National MPI CPI All services
Pain Management MPI
Major Surgery MPI
3434 ACS Medical Price Index
The National CPI for All Services, as reported by the
U.S. Bureau of Labor Statistics, is presently 119.33,
which is down 0.11 percent in Q1 2016 since Q4
2015. For the same period of time, Q4 2015 to Q1
2016, the National Auto Casualty Medical Price
Index increased 1.04 percent and presently sits
at 118.98. Since Q1 2006, the National MPI has
increased 18.98 percent while the National CPI for
All Services increased 19.33 percent.
• Charges associated with physical medicine
services experienced a 0.81 percent increase in
Q1 2016 from Q4 2015. This increase brings the
total unit cost change for physical medicine since
Q1 2006 to 4.2 percent, significantly below the
National CPI for All Services as reported by the
Bureau of Labor Statistics. Recall that the physical
medicine MPI is looking strictly at unit charge
while holding utilization constant. No significant
changes in technology to deliver physical
medicine services have been discovered that
might influence the unit charge of these services.
Auto Casualty Medical Price IndexBy Ed OlsenSr. Business Process Consultant, Mitchell Casualty Solutions Group
Since Q1 2006, the National MPI has increased 18.98 percent while the National CPI for All Services increased 19.33 percent.
35 ACS Medical Price Index
• The unit cost for major radiology services
increased 0.91 percent in Q1 2016 from Q4 2015
and presently sits at 124.3. Despite this increase,
MPI for major radiology services remains 4.5
percent below the service groups’ high of 128.75
experienced in Q4 2013.
• The unit cost for evaluation & management
services increased 2.67 percent in Q1 2016 when
compared with its Q4 2015 result. Since Q1 2006,
evaluation and management services have seen
unit charge increase 75.11 percent as reflected by
the index value of 175.11.
• The unit charge for professional services in the
emergency room continues to dominate the
conversation dealing dramatic increases in unit
charge. In Q1 2016, professional services in the
emergency room experienced a 2.26 percent
increase since Q4 2015. Since Q1 2006, this
service group has experienced a 90.5 percent
increase in the unit charge of professional
emergency room evaluation and management
services.
36 ACS Medical Price Index
-10
10
30
50
70
90
110
130
150
90
100
110
120
130
140
150
160
170
180
19020
11 Q
1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
Thou
sand
s
Emergency Room MPI
Total Units National Service Group MPI CPI All services
Emergency Room MPI
0
5
10
15
20
25
90
95
100
105
110
115
120
125
130
135
140
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
Mill
ions
Physical Medicine MPI
Total Units National Service Group MPI CPI All services
Physical Medicine MPI
37
0
5
10
15
20
25
90
95
100
105
110
115
120
125
130
135
140
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
Mill
ions
National MPI
Total Units National MPI CPI All services
0
100
200
300
400
500
600
700
800
900
1,000
90
100
110
120
130
140
150
160
170
180
190
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
Thou
sand
s
Evaluation & Management MPI
Total Units National Service Group MPI CPI All services
Evaluation & Management MPI
-10
10
30
50
70
90
110
130
150
90
95
100
105
110
115
120
125
130
135
140
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
Thou
sand
s
Major Radiology MPI
Total Units National Service Group MPI CPI All services
Major Radiology MPI
National MPIACS Medical Price Index
3838
Medical Marijuana Prescription protocols for medical marijuana
are changing monthly due to new studies
promoting use and regulatory bodies that allow
the prescription of medical marijuana in their
states. Medical marijuana, sometimes referred
to as “Medical Jane,” has been used for medical
purposes since 1550 BC in ancient Egypt to treat
inflammation. It took thousands of years to actually
be able to prescribe medical marijuana legally in
the United States for the same ailment. In modern
history, the Food and Drug Administration (FDA) has
been the gate keeper for permitting drug use in the
United States. Marijuana was categorized with other
illegal drugs like opium and morphine since the early
1990s. By 1970, marijuana was a “Schedule I” drug
and was considered to have no medical use.
In November 1991, the very first proposition called
on the state of California and the California Medical
Association to “restore hemp medical preparations
to the list of available medicines in California, and
not to penalize physicians for prescribing hemp
preparations for medical purposes. The vote passed
overwhelmingly with nearly 80 percent in favor.
The state of California legalized medical marijuana
in 1996” (Procon.org, 2016). In addition to the
District of Columbia, medical marijuana is currently
legal in the following U.S. states: Alaska, Arizona,
California, Colorado, Connecticut, DC, Delaware,
Hawaii, Illinois, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Montana, Nevada, New
Hampshire, New Jersey, New Mexico, New York,
Ohio, Oregon, Pennsylvania, Rhode Island, Vermont
and Washington.
The Compliance Corner
The Compliance Corner
Medical marijuana, sometimes referred to as “Medical Jane,” has been used for medical purposes since 1550 BC in ancient Egypt to treat inflammation.
By Michele Hibbert-Iacobacci, OHCC, CCSPVice President, Information Management & Support, Casualty Solutions Group
Medical Marijuana, Telemedicine and Opt-Out
39
Nearly all other states have propositions on the
books for legalizing medical marijuana.
There is a large difference between the legalization
of medical marijuana and the coverage of the drug
under insurance policies. Aside from the workers’
compensation cases in Minnesota and New Mexico
(Lewis v. Am. Gen. Media), there has not been a
broad acceptance by payors. This is a legal matter
left to interpretation by policy and regulations.
Today the FDA has not approved marijuana for
medical use and it is still classified under the same
umbrella with heroin, LSD and Ecstasy as a
Schedule 1 drug. The latest move to change the
drug class was in March 2015, when the CARERS Act
was introduced to the Senate proposing to reclassify
marijuana to Schedule II, recognizing the “accepted
medical use.” Schedule II drugs are those that can be
potentially addictive like oxycodone.
On June 2, 2016, the Property Casualty Insurers
Association of America (PCI) issued a statement
expressing their approval of the House Action on the
Marijuana-Impaired Driving Study.
Excerpt from National Highway Transportation and
Safety Association:
“PCI applauds the House Appropriations Committee
for including language in its THUD report that
directs the National Highway Traffic Safety
Administration (NHTSA), along with the National
Institute on Drug Abuse and other related agencies,
to conduct a study of marijuana-impaired driving,”
(PCI, 2016).
This commentary is on the heels of a review by PCI
and NHTSA examining the use of marijuana and
distracted driving leading to higher claim frequency
(NHTSA, 2016).
Click Here To View Full Statement
How regulations for casualty evolve will take time.
The use of medical marijuana, even if compensated
routinely, will still have challenges. Employers will
need to evaluate patients who are prescribed
medical marijuana for on-the-job liabilities and
determine the new norm of distracted driving, with
driving under the influence as a cause for the rise in
claim frequency.
There is a large difference between the legalization of medical marijuana and the coverage of the drug under insurance policies.
The Compliance Corner
1. NHTSA. (2016, Feb). National Highway Transportation and Safety Association. Retrieved Jun 2016, from www.nhtsa.gov: http://www.nhtsa.gov/About+NHTSA/Press+Releases/2015/nhtsa-releases-2-impaired-driving-studies-02-2015
2. PCI. (2016, June 2). www.PCIAA.net. Retrieved 2016, from Property Casualty Insurers of America: http://www.pciaa.net/pciwebsite/Cms/Content/ViewPage?sitepageid=455873. Procon.org. (2016, April 6). History of Marijuana as Medicine. Retrieved 2016, from www.procon.org: http://medicalmarijuana.procon.org/view.timeline.php?timelineID=000026
40 Compliance Corner
Telemedicine: New Innovations in the Old Program Telemedicine is the method of delivering health
care electronically through applications like smart
phones, email, and skype. Telemedicine started over
40 years ago with the intention of enabling health
care providers, mainly hospitals, to provide services
to patients in remote areas.
The concept expanded as a means to provide
more affordable services and better quality care
by health care providers after The Affordable Care
Act was introduced in 2012, mandating health
insurance coverage for all Americans. This legislation
introduced many new-comers to the healthcare
system that otherwise may have never been
provided health services. Over 30 million people
with coverage were added into the healthcare
system during this time, with the threat of not
enough providers to service those insured.
It is estimated that the United States currently holds
roughly 200 telemedicine networks, providing
connection to over 3,000 sites. A variety of services
including consultations, medical education modules,
vitals monitoring and meetings with primary care
providers are examples of the offerings made
available through telemedicine.
Timing is critical when it comes to delivering
emergency services for some medical conditions.
With timing being an influential role, it makes sense
that telemedicine continues to think about how
to develop quality clinical services and improve
innovation. One example of innovation used in the
telemedicine realm is “telestroke” services, which
have the ability to send information to neurologists
from rural facilities to assist identifying the sources
of strokes in patients. Initial studies in Canada have
shown a 92 percent decrease in the transferring of
patients to more expensive facilities, thus making
the care more affordable. What you won’t see in
telemedicine are chiropractic manipulations and
other hands-on care, but instead, the planning
and care coordination efforts as it relates to these
specific providers.
The Institute for Healthcare Consumerism (IHC) has
been reporting on “wait times” and the impact of
adding more patients into the system for several
years. For example, in San Diego, the average wait
time for a provider appointment is 20.2 days, and
27 days in Philadelphia. These long wait times
can impact a patient’s health and the use of
telemedicine can be invaluable in providing quality
of care in these instances. When a patient suffers
a severe injury as in a motor vehicle accident, they
go to the emergency room. The Center for Disease
Control has reported that nearly 80 percent of adults
are going to the emergency room because of a
lack of alternative health care resources, ultimately
impacting the people that really need to be treated
in the Emergency Room setting. Telemedicine could
serve as a solution in these cases.
The challenge we face in the Property and Casualty
(P&C) industry is delineating the necessity for
telemedicine, and positioning the benefit of
including it as an “add on” to services already
rendered. The intent of telemedicine is to provide
quality and affordable care, not to create another
line item on the provider bill for payment. For
telemedicine Professional Services claims, services
are to use the appropriate CPT or HCPCS code along
with the modifier GT (via interactive audio and video
telecommunications systems).
41
Imagine a $50 telemedicine bill on a claim replacing
the average $1,000 or more emergency room bill.
It certainly makes it a compelling alternative for the
future. The market assessments are not bad either,
with Insurancenewsnet.com reporting in January
2016 a potential market for telemedicine valued
over $45 billion by 2021.
Opt-Out: Hurry Up and WaitOpt-out in the workers’ compensation world is
2016’s buzzword for deregulation of payment for
workers’ compensation claims at the state level.
Opt-out is an alternate compensation model for the
injured worker whereby employers choose to opt-
out of state regulated systems. It has been promoted
in some states like Oklahoma and Texas. Although
not a new concept, new interests among both
advocates and non-supporters have been brought
to the horizon, including different proposed models.
Last May, the International Association of
Industrial Accident Boards and Commissions
(IAIABC) published an analysis of the treatment
of occupational injuries and illnesses under state
workers’ compensation systems and Opt-out
programs adopted in Oklahoma and proposed in
South Carolina and Tennessee. The study sought to
address key questions outlined below:
• What part of workers’ compensation law is the
employer renouncing by opting out?
• What are the conditions, or regulatory
requirements, that the state places on opt-out
employers?
• What regulatory monitoring and enforcement
system should govern opt-out benefit plan
compliance?
Click Here To View The Study.
The latter half of May was met with the U.S.
Department of Labor investigating Opt-out
programs due to the interest in the state of
Washington. The main concern was the oversight
component and whether the injured worker would
be harmed. All in all, the consistency in application
of plans has been one of the major findings in
Oklahoma and whether or not employers will offer
plans equal to or greater than what the employee
had previously.
The Compliance Corner
4242
With costs rising in both the auto casualty
and workers’ compensation market, insurance
companies and payors of all kinds should be looking
for ways to optimize claims performance. In order to
manage efficiencies and improve cost containment,
payors should focus on these six keys, including
integrating disparate technology systems and using
embedded analytics.
Read More
6 Keys to Optimizing Claims Performance
By Shahin HatamianVice President, Product Management and Strategy, Casualty Solutions Group
Current Events
Insurance companies and payors of all kinds should be looking for ways to optimize claims performance.
Published June 8, 2016
From: PropertyCasualty360.com
43
Mitchell International realized a growing market
need for a medical implant cost management
solution. With this aim in mind and its dedication
to offering its customers a best-in-class portfolio
of Strategic Partners in the industry, Mitchell
International is pleased to announce its newest
Strategic Partner relationship with ForeSight Medical.
ForeSight leverages a rich database of proprietary
medical implant cost information that will be used in
conjunction with Mitchell’s SmartAdvisor® bill review
platform to provide additional medical implant cost
containment opportunities. As a Mitchell Strategic
Partner, ForeSight is the latest addition to a portfolio
of cost containment solutions offering additional
ways to better manage medical bill costs in the
workers’ compensation industry.
ForeSight provides a comprehensive surgical implant
audit and adjudication for the workers’ compensation
industry. Designed specifically for surgical procedures
involving implantable hardware, ForeSight’s
proprietary Fusion™ audit and adjudication platform
employs dynamic modular reduction methodologies
to identify and remove inappropriate charges to
ensure medical implant charges are appropriately
reimbursed.
Read more
Foresight™ Medical
Partner Spotlight
ForeSight is the latest addition to a portfolio of cost containment solutions offering additional ways to better manage medical bill costs in the workers’ compensation industry.
6 Keys to Optimizing Claims Performance
44 About Mitchell
Mitchell San Diego Headquarters 6220 Greenwich Dr. San Diego, CA 92122
Mitchell empowers clients to
achieve measurably better
outcomes. Providing unparalleled
breadth of technology,
connectivity and information
solutions to the Property &
Casualty claims and Collision
Repair industries, Mitchell
is uniquely able to simplify
and accelerate the claims
management and collision
repair processes.
As a leading provider of Property
& Casualty claims technology
solutions, Mitchell processes
over 50 million transactions
annually for over 300 insurance
companies/claims payers and over
30,000 collision repair facilities
throughout North America.
Founded in 1946, Mitchell is
headquartered in San Diego,
California, and has approximately
2,000 employees. The company is
privately owned primarily by KKR,
a leading global investment firm.
For more information on Mitchell,
visit www.mitchell.com.
Mitchell in the News
MitchellRepair Mitchell ClaimsMitchell_IntlMitchell InternationalPress Releases
For More Mitchell News:
Inside view: Debbie Day of Mitchell on customer-driven enhancementsDebbie Day joins Mitchell as General Manager of the Auto Physical
Damage business unit and shares her excitement for joining a company
with a long history.
Read More
Mitchell Partners with ForeSight Medical for Surgical Im-plantable Device Mgmt Mitchell partnership with ForeSight Medical will help manage utilization,
facility, surgeon and procedural trending related to surgical procedures
involving implantable hardware.
Read More
Key RIMS Observations and Their Industry-Wide ImplicationsMitch Freeman shares a post-RIMS roundup with insights from the
conference and what they mean for the industry at large.
Read More
6 keys to optimizing claims performanceShahin Hatamian outlines the key features of a business workflow to
produce better outcomes.
Read More
Mitchell International Launches ScriptAdvisor PBMMitchell launches ScriptAdvisor, a Pharmacy Benefit Management
solution (PBM) for the workers’ compensation and auto casualty
industries.
Read More
©2016 Mitchell All Rights Reserved.
The Industry Trends Report is a quarterly snapshot of the auto physical damage collision and casualty industries. Just inside— industry highlights, plus illuminating statistics and measures, and more. Stay informed on ongoing and emerging trends impacting the industry, and you, with the Industry Trends Report!
Questions or comments about the Industry Trends Report may be directed to:
Melinda Szaradnik Marketing Specialist, Mitchell [email protected]
The Industry Trends Report is published by Mitchell.
The information contained in this publication was obtained from sources deemed reliable. However, Mitchell cannot guarantee the accuracy or completeness of the information provided.
Mitchell and the Mitchell logo and all associated logos and designs are registered and unregistered trademarks of Mitchell International, Inc. All other trademarks, service marks and copyrights are the property of their respective owners.
Industry Trends
Report
Volume Five Number ThreeQ3 2016 Published by Mitchell
