We’ve completed the First Annual Workers Comp Bill Review Survey and there are several highlights worthy of mention. (If you’ve requested a copy of the results you will receive it by the end of next week)
Bill review is considered significantly ‘more important’ than other managed care services by survey respondents (TPAs, carriers, managed care firms, and self-insured employers). While this isn’t consistent across all respondents, most are of the opinion that bill review is where the proverbial rubber/road meeting occurs, and if UR or PPO determinations don’t show up in bill review, they are irrelevant.
Which leads to the next finding – most of the more sophisticated respondents are very, very cognizant of – and frustrated by – the difficulties inherent in integrating BR and other medical management systems, platforms, and vendors. There is a sense that not all UR determinations (numbers of visits for PT, hospital stay duration, epidural steroid injections) appear in the final payments, with many unauthorized services actually performed, billed, and paid.
(note – this is consistent with the result of some, but not all, audits of client data performed by HSA)
Respondents decried the lack of understanding of the complexities of bill review, and the commoditization of the service, on the part of senior management and policyholders alike. Their sense is there is little to no appreciation of the difficulties inherent in staying on top of fee schedule and rule changes, increasingly sophisticated provider billing techniques, and impact of bill review on claims costs. Pressed to reduce costs and staff during this soft market, respondents are frustrated by their inability to convince C-level personnel of the relationship between effective (i.e. well-done and not cheap) bill review and ultimate claims costs and combined ratios.
The ratings of bill review vendors and application providers show respondents are quite current and aware of changes at the various suppliers. Vendors that would have been rated poorly as recently as a year ago are viewed more favorably today, with respondents very much open to considering bill review application vendors that would not have made their first cut twelve months ago.
There were notable differences among and between the various bill review vendors and application providers, differences that ‘didn’t appear until well into the implementation phase’. The perception among respondents was that these differences were due in part to a failure on the front end to be very clear and precise about semantics (what, exactly, is a ‘bill’, what is a ‘rule’, what is a ‘duplicate bill’, when does the clock start and end for turn around time, whose responsibility is it to ensure the DRG grouper complies with and is consistent with specific state regs, and on and on). As a result, costs, throughput, efficiency measures, ‘savings’ and other metrics had to be re-adjusted, causing more than a little agita for program managers.
Finally, some bill review applications and vendors were perceived to be better positioned to address likely changes in the overall health care system. Respondents viewed these vendors as more flexible, more adaptable, and more cognizant of the broader systemic issues and their potential impact on workers comp. One knowledgeable respondent noted “some of these vendors are so focused on comp that they aren’t paying attention to current and likely future changes in Medicare physician and hospital reimbursement…and their systems just won’t support some of the likely changes in Medicare-based fee schedules..”

I’ve fielded several calls over the last few days from clients and colleagues asking about the potential implications of the Obama Administration’s vow to more rigorously enforce antitrust regulations.
During the eight years of the Bush Administration, not one case was brought against a large company charged with attacking a smaller rival. If anything, Bush et al bent over backwards to help big business, doing little to stop mergers and acquisitions that significantly consolidated market share. The change in policy by the Obama Administration came about Monday, when antitrust boss Christine Varney explicitly rejected Bush’s September 2008 rule-making that directed the government to avoid interfering in “the rough and tumble of beneficial competition.” In order to initiate action, the Bush rule required that the government determine that a merger or action’s negative impact on competition was “substantially disproportionate to any associated pro-competitive” benefit.
Speaking at an event sponsored by the Center for American Progress, Varney said the Obama administration’s approach to antitrust will be based on the understanding that the marketplace alone should not dictate what is fair competition. That implies the Feds will be taking a more active role.
Antitrust regulation is based on the Sherman Antitrust Act, wherein “a monopoly power is defined as the ability of a business to control a price within its relevant product market or its geographic market or to exclude a competitor from doing business [emphasis added] within its relevant product market or geographic market. It is only necessary to prove the business had the “power” to raise prices or exclude competitors. The plaintiff does not need to prove that prices were actually raised or that competitors were actually excluded from the market.” (FreeAdvice.com)
Implications for comp
The work comp network business is dominated by Coventry Healthcare. They have the largest network used by almost all of the larger payers and most of the mid- and smaller ones. The network was based on the First Health PPO, augmented by the acquisition of Concentra’s managed care business, and enhanced when Coventry removed Aetna Work Comp Access from the market by signing an exclusive deal.
Coventry then implemented their “all or nothing” strategy, wherein customers who wanted to use other rival networks in certain jurisdictions were told they could not do so; if they wanted Coventry anywhere, they had to use Coventry everywhere. Other customers were given more flexibility, but at a much higher price – using a ‘foreign’ network meant the customer had to pay more, and in some cases much more, to Coventry.
I’m no attorney and certainly not more than superficially knowledgeable about antitrust issues, regulation, and history. With that disclaimer, here’s a mostly uneducated opinion. It seems to me that Coventry’s ability to consolidate the comp network business and, via pricing and contracting practices, shut out competition gives them a huge advantage in the marketplace. An advantage that has driven very nice financial results. Whether those actions qualify as anti-competitive under the law is something I’m not qualified to judge. But from a layman’s perspective, the comp network business fits the definition of a monopoly.
Will the Administration look into the comp network business? I very much doubt it. Not only is this a relatively tiny market, the market consolidation, and approval thereof (to the extent Bush’s people even looked at them) occurred well before President Obama took office. Obama has demonstrated a reluctance to revisit decisions made by his predecessor; I just don’t see Varney and her attorneys re-examining the consolidation of the comp network business.
Disclaimer – After several years of attempts to engage with Coventry to hear their perspective, attempts that were ignored (except for one conversation with Jim McGarry two years ago) I don’t even try any more. If anyone from Coventry wants to discuss this, feel free to contact me.