Posted by Madhusudan Vasudevan
Insurance organizations that deal with workers’ compensation claims must leverage effective strategies for managing financial challenges inherent to the provision, including increased competition, staffing requirements, and new state regulations.
Claims operations leadership struggles to effectively transform operations to perform at the highest level of compliance and quality standards while also focusing on cost-containment. According to the National Council on Compensation Insurance (NCCI), medical costs for workers’ compensation have increased an average of 6% every year since 2002, and are typically higher than comparable non-job injuries.
An aging workforce, the prevalence of chronic and co-morbid illnesses, and emerging state rules and regulations also have a significant impact on claim costs. The Council also predicted that medical costs will represent 70% of all workers’ compensation losses this year.
Outsourcing for Increased Efficiency
Optimal cost effectiveness and flexible deployment of resources, particularly in the management of workers compensation claims, sometimes means partnering with an organization with proven record of managing workers’ compensation clients. It is proven that outsourcing claims management functions increases the productivity of business line managers and those in related functions, as they are not paper shuffling or spending hours trying to resolve side issues associated with claims. This is the most effective way to minimize administrative costs and increase revenue and market share, by keeping premiums lower, managing risk, and achieving organizational budget and growth goals.
Many organizations are turning to business process outsourcing (BPO) as an option that brings cost-containment, improved turnaround time (TAT), and service level excellence to these insurers. Effective BPO vendors will bring expertise and a competitive advantage to a myriad of functions and services, including medical bill review, reconsiderations, code and nurse review, provider data management and contact center solutions. Also, they bring in value added services through process reengineering and application of robotic process automation (RPA) to improve process efficiency
Rework is one of the top drivers of additional costs for workers’ comp insurers. It’s is all about getting it right the first time and having the right intellect and resources focused on the final objective. The ultimate goal is to take the most effective path to payment and return to work, via effective project management and skilled resources.
Medical cost containment is an area in which a BPO partner can make a critical difference in time, energy, and resources. Bill review and coding are other areas where a BPO partner can help streamline efficiencies. A BPO partner can review each treatment code (CPT code) to ensure it is related to a specific claim/injury, confirm compensability, appropriateness, eliminate duplicates, and ensure accurate coding.
Most organizations are now outsourcing complex functions like clinical and coding processes, due to a large talent pool with relevant certifications like NCLEX and CPC, which is an add on to their clinical/coding background.
Case management is another area of opportunity where case nurses’ and adjusters’ work can be categorized decoupled into core and administrative functions. This enables them to focus on their core strengths improving productivity and focus toward faster employee return to work, while their administrative tasks can be performed by offshore agent or nurse.
Automation as a Cost-Containment Strategy
A vendor partner can also ensure the right level of RPA deployment to automate redundant steps, which is critical to ensuring that claims are turned around in time to adhere to state-regulated bill payments and avoid costly penalties. Automation reduces the manual effort required for each activity or even totally eliminates the manual effort required for some tasks. Significant capacity optimization can be achieved by connecting and building business rules on multiple applications. This saves the valuable agent effort of toggling between systems enabling them to handle more and more complex transactions.
Robotic automation, a non-invasive technology, doesn’t require back-office integration through APIs and seamlessly works with end-user interfaces and enterprise applications. The technologically agnostic solutions work well with data-intensive processes, across multiple domains and industry verticals. It offers various functionalities including responding to external stimuli and deciding when to execute functions; acting autonomously to use and orchestrate any application; bringing inherent data protections, transactional integrity across systems; and providing clear audit trails and other system management functions.
The Bottom Line
A good business process outsourcing (BPO) partner that works with workers’ compensation as a specialty will have the knowledge and procedures in place to ensure every statute is met, every contingency is covered, every report is submitted correctly and on time, and everything is exactly as it needs to be, removing the bottlenecks to reduce costs and improve revenue flow.
BPO gives health insurance organizations the skills and synergy they need to improve internal policy and process maps, and ensure the highest levels of compliance in an increasingly complex statutory environment. A successful BPO/CCO partnership returns value beyond the terms of the Statement of Work between the payer and vendor; the partnership should enable payers to focus on their core mission and service to the community.