True Savings: Workers’ Compensation Medical Bill Review
By Herman Wilks
It is no secret that in these economic times the bottom line often becomes first and foremost for many decision makers of Texas public schools and other public educational entities. Finding ways to save a bit more here and shave a little more there is now the rule rather than the exception. When looking at employee coverage, the question of “How much will this save us?” can be the determining factor in choosing one plan versus another. But do you know how much you are really saving? When a Workers’ Compensation insurance carrier promises savings of 75 percent, the thought conjures memories of a late night commercial where someone dressed in a sports coat with two fists full of cash is guaranteeing to affect your bottom line. But what does this really mean? This article is the first in a series that will focus on the difference between “savings” and “true savings” in the world of workers’ compensation (WC).
No matter what the provider charges, the MAR is defined by the DWC.
The Texas Department of Insurance, Division of Workers’ Compensation (DWC) publishes a Texas Medical Fee Schedule that is effective in January of each year. This fee schedule, based in large part on federal rates established by the Centers for Medicare and Medicaid Services (CMS), defines the maximum allowable reimbursement (MAR) that a medical provider in Texas can be paid for services rendered. The MAR applies to just about every medical service that can be provided, from something as complicated as a hospital admission to something as simple as gauze. No matter what the provider charges, the MAR is defined by the DWC.
Many carriers define savings as the difference between the billed amount and the amount paid. But what you may not know is that they then turn around and bill for their services based on how much they saved you. For example, if a provider bills $100 for an office visit and the MAR is defined by DWC as $50, the savings would be 50 percent. However, if the carrier then charges a percentage of savings as their fee for processing the bill, the percentage of true savings is greatly reduced. Conservatively, carriers that do this charge an average of 25 percent of savings. In our example that would equate to $12.50, meaning rather than a savings of 50 percent, the true savings are only 37.5 percent.
We believe true savings should be based on aggressive cost containment measures reviewed by a well trained staff that examine every aspect of the medical bill.
Keep in mind, there is nothing that precludes a provider from billing whatever they want for a service. Therefore, the end result could ultimately cost much more than ever expected. Many carriers also consider a duplicate bill submitted by the provider and reduced to zero by the carrier to be a 100 percent savings!
The TASB Risk Management Fund, however, charges a nominal flat fee for handling WC medical bills regardless of the amount saved. We believe true savings should be based on aggressive cost containment measures reviewed by a well trained staff that examine every aspect of the medical bill, not just reducing the billed amount to MAR. We understand many of the challenges facing Texas public schools today – defining true medical bill review savings should not have to be one of them. If you have questions concerning medical bill review, contact us at 800.482.7276.
