Managing Medical Costs

By Laurie Barkhorn
For risk managers of large companies, managing the cost of workers' compensation is a top priority. Industry best practices help injured workers recover from their injuries and facilitate their return to work while reducing the overall cost of claims. But forward-thinking insurance companies and risk managers don't take their current best practices for granted; they continually seek new ways to improve outcomes. The Hartford is an industry leader in this regard and is experimenting with innovative ways to keep claim costs down while providing best-in-class support to injured employees.
This article is part of a series in which we share some of The Hartford's initiatives that are designed to drive better outcomes for our customers.
Dr. Marcos Iglesias, vice president and medical director at The Hartford, is leading the company in new directions with regard to medical management for both workers’ compensation and group disability claims. I met with Dr. Iglesias to learn more about the programs he’s working on, what makes them unique within the insurance industry, and why they matter to large, loss-sensitive companies.
LB: What is your role at The Hartford?
MI: As The Hartford’s medical director, my primary role is to help ill and injured workers return to active, productive and fulfilling lives – quickly and in a cost-effective way. I lead a team of medical strategists who share this goal, and together we’re responsible for developing an outcome-focused medical management strategy that helps The Hartford deliver the best possible outcomes for injured employees while keeping claim costs down for employers.
LB: What is a medical strategy?
MI: A medical strategy is the system of programs and practices an insurance company employs to deliver the right medical care at the right time and for the right condition. An effective strategy considers the whole picture, from the quality of medical care an employee receives to the manner in which that care is delivered and the cost savings that result from managing the claim effectively. Provider networks, practitioners, pharmacy management, case coordination and medical reviews are among the many factors that comprise a strategy.  
LB: Why is it important for an insurance company to have a medical strategy?
MI: Medical management drives everything in claims. As medical costs continue to skyrocket, a well-designed and integrated medical strategy is essential to deliver optimal care while containing those costs. And because health care has become so complex, a strategy is essential to unite all members of both our internal teams and within our provider networks in working toward the shared goal of optimal, cost-effective care.
LB: What are the top priorities for The Hartford’s medical strategy?
MI: At The Hartford, our priority is to provide an integrated, holistic and proactive strategy that is built upon innovation.
We have an aggressive pharmacy management program that safeguards injured workers by ensuring they get the right drug at the right time. Using a state-of-the-art clinical rules-based engine, we’re able to identify drug events that warrant further review, both at the point of sale and on an ongoing basis, and our specialized team of highly skilled nurses intervenes with doctors and injured workers when the circumstances warrant.
This is especially vital today as the use of painkillers and opioids reaches epidemic proportions in the United States, and our internal drug review team is making a difference. For the period between January 2015 and August 2016, opioid use for The Hartford’s workers’ compensation claims dropped 25 percent. And between 2014 and 2015 the use of opioids in our WC claims dropped at a rate that was 50% better than industry.
Another significant component of The Hartford’s medical strategy is our biopsychosocial (BPS) approach to claims management. This approach allows us to proactively identify claimants with non-medical issues – such as employment issues, fear, anxiety, or a lack of family or social support – that could delay their recovery from a physical injury and thereby increase the cost of a claim.
LB: Is the BPS approach new in the industry?
MI: It’s an emerging trend in the industry, but The Hartford has been addressing psychosocial issues for a while now. We use a text mining technique to identify at-risk ill or injured employees early in the claim cycle. We’ve also developed a toolkit that allows our claim handlers to offer a targeted plan of intervention using a continuum of solutions.
Many injured workers with psychosocial issues are also benefitting from iRECOVER,® The Hartford’s new proprietary coaching intervention program for claimants with a high risk of delayed recovery due to a psychosocial barrier. Participants meet with a coach over the phone for up to 10 weeks and come away with new life skills that can reduce their recovery period significantly.
LB: What other innovations does The Hartford bring to its claim management strategy?
MI: Our medical strategy team is devoted to tracking medical trends and scientific developments that could impact employees. These range from telemedicine, which provides clinical health care from a distance, to advanced medical technologies.
LB: You’ve shared a few ways in which The Hartford has operationalized its key priorities. What other measures are in place to ensure claims are managed effectively?
MI: To ensure the best care, we have a highly skilled clinical team of over 200 experienced, licensed registered nurses and master’s level practitioners who coordinate the claimant’s care and assist with complex and lost-time claims. Triage nurses offer reinforcement on longer-term claims, and provide a medical roadmap to guide our claim handlers.
To keep claim costs down, we bring rigor to our claim management process in a number of ways. For instance, through a process of “right coding,” we ensure that a provider’s billed amounts are appropriate for the care provided and supported by appropriate medical documentation. About 45 percent of the bills we review are adjusted for right coding, which has led to a substantial savings in claim costs.
For employees who suffer a permanent partial disability (PPD) on the job, we take extra steps to verify that the doctor adheres to state-specific appropriate guidelines, which can be complex. This ensures that the employee receives the proper PPD award through the employer’s workers compensation policy. This cost saving procedure is applied to every impairment rating we receive by a Hartford team of experts; this program is unique among insurance carriers.
LB: Why are these initiatives important to customers – specifically, for large, loss-sensitive customers?
MI: Ultimately, they protect our customers’ valued employees, and ensure they can return safely to their lives and to the work they had before they were injured.
LB: Any best practices or advice you can provide to risk managers?
MI: I always advise risk managers to be vigilant and proactive regarding workplace safety and to report injuries right away. This helps us help them by bringing our many resources to the process of managing an employee’s recovery, whatever the illness or injury. It’s also important for risk managers to stay in constant and proactive communication with their employees. It makes a difference in return-to-work timeframes, and allows risk managers to tune in to psychosocial factors that potentially could delay an employee’s recovery and return to an active, productive life.
Other best practices include reviewing the company’s insurance carrier on an annual basis. Are the present insurer’s claim management services best in class? What is the insurer doing to stay at the forefront of the industry? A company’s carrier is a major factor in claim outcomes, so risk managers should be sure to choose wisely.
It’s also important for risk managers to continuously learn and looking for ways to improve their risk management programs. A professional network is one of the best resources to stay abreast of new and innovative approaches.
The information provided in these materials is intended to be general and advisory in nature. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) will be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors.
The Hartford® is The Hartford Financial Services Group, Inc. and its subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.
1 National Accounts In Force as of August 2016.