SFM's medical services
Plenty of medical issues drive workers' compensation costs; here's how SFM tackles them

Employers served by State Fund Mutual receive services that are highly effective in reducing the medical and wage-loss benefits paid out for work injuries.

These services directly reduce the cost of an average lost-time claim by several thousand dollars. They help control employers' workers' compensation premiums. Employers receive them with their SFM package of coverage and services; no need to buy duplicative services elsewhere.

What do they look like? First, look at the scope of issues that drive work comp medical benefits--and often wage-replacement benefits, too.

Where medical issues generally come from

Three areas are discussed below. In addition to those are--

Overall medical inflation. It's been running at double digits for several years. Among the big drivers: rise in surgery costs and rise in prescription costs.

Critical public policy issues. They are part of why work comp healthcare cost is so high. Resolving them will take renewed legislative fortitude at the state level.

1) Issues regarding treatment. These are usually issues that arise from decisions made right in the medical provider's office. From a workers' comp and occupational medicine point of view, initial decisions by providers occasionally appear problematic in some way. Some brief examples:

• The treatment prescribed is less effective than other options. Or it is more expensive than other treatment options that are equally effective.
• It's not focused on getting the injured employee back to work.
• It involves traditional surgery that could be replaced by non-invasive treatment with faster recovery, less overall cost.
• Utilization is questionable: For instance, drugs and dose levels may be prescribed that exceed what is needed to be effective, especially with painkillers.
• Accepted treatment practices are not followed. Minnesota state treatment guidelines for work injuries are intended to avoid excessive treatment, but not all doctors and chiropractors are familiar with them. Wisconsin, incidentally, is in the process of developing treatment guidelines.

Beyond those examples: Studies of the healthcare industry are leading to an emerging public awareness that the cost of treatment is not necessarily associated with the effectiveness of treatment. Paying more doesn't always buy more. This insight is good news. A growing understanding of how providers compare on quality vs. cost can help employers select better providers to recommend to injured employees. Many doctors provide treatment for injured employees that is both effective and reasonably priced. The issue is identifying who they are, then letting medical consumers know.

2) Issues regarding the right dollar amounts. Examples:

• Billing oversights. These come in many flavors: The statement from the provider charges twice for the same service, charges for a higher level of service, itemizes a packaged service for a higher overall cost, or charges for service or equipment that was not provided.
  
  
• Disability ratings are incorrectly applied. Minnesota's and Wisconsin's systems for rating the severity of permanent disabilities caused by work injury are intended to ensure fair compensation, but few doctors have the special expertise to apply the disability ratings accurately.

3) Issues created by the injured employee.

For instance, the employee:

• Has other medical, emotional or financial problems that cause him to want to prolong medical care and work comp wage-loss benefits.
• Abuses drugs.
• Does not understand his treatment program, or doesn't follow it.
• Needs guidance on what to do, where to go. Or maybe just needs a push.

These and other employee issues impact medical care's effectiveness. Sometimes they become intertwined with employment issues--termination or lack of light-duty work, for instance. Major employee issues arise in only a small portion of cases, but those cases can become extremely expensive because of complications with medical recovery and return to work.

SFM gets results with teams, experts, multi-levels

At SFM, these medical issues are managed by teams. The claims representative drives the process. The issues are managed at different layers depending on what's needed. Available to bring in to help manage a claim through to resolution are in-house nurses, in-house consulting physicians, and in-house attorneys along with the treating physician, the employer and, when necessary, the agent.

The 80-20 rule applies: Roughly 20 percent of cases account for roughly 80 percent of overall costs because they involve significant employee or treatment problems. The most intensive team management efforts generally go into those cases so they are resolved expeditiously and costs are minimized.

Medical case managers. SFM's in-house nurses and occupational therapists work directly with all injured employees who are facing long-term treatment or have already missed two weeks' work. The nurse is a liaison between the injured employee, the employer and the medical provider, working to keep treatment on track and safely return the employee to health and productivity.

• SFM's medical case managers produce substantial "hard" savings through early return-to-work dollar amounts that SFM is happy to share with the policyholder. They also produce uncalculated "soft" savings by influencing changes to more effective or less costly medical treatments.

Physician advisors. SFM's in-house consulting physicians provide another level of medical management. In certain cases, they review the treating physician's assessment and treatment plan: Is the injury work-related? Is the treatment reasonable and necessary? Is the proposed diagnostic testing and surgery appropriate? Are disability ratings accurate? This level of work comp physician expertise oftentimes produces better care.

• It also produces impressive savings, both hard and soft. For instance, more accurate disability ratings alone save nearly $900 per case. Substantial other savings come throughout the course of care.

Provider networks: a way to raise the quality of care and lower its cost. SFM's arrangement with the CorVel preferred provider organization offers policyholders a PPO network through which they can receive medical care at discounted rates from providers who've met standards of quality. SFM's arrangement with ExpressScripts offers access to a wide network of pharmacies that fill prescriptions at discounted prices.

• More than half of prescriptions are being discounted through the ExpressScripts network. SFM's use of the CorVel PPO began recently; early results are encouraging.

Medical bill review. SFM's primary, secondary and tertiary levels of bill review ensure that providers are paid fairly--no more, no less. It's a thorough, highly cost-effective system that applies state laws effectively and reviews from the first dollar billed. It produces results across the board: from applying state fee schedule limits to correcting billing oversights to applying bill reductions to providers outside Minnesota and Wisconsin.

• Medical bill review this year has produced impressive savings of nearly 30 percent off billed amounts.

The effectiveness of SFM's cost and quality controls lies in the scope of issues addressed--spanning treatment issues, cost issues and employee issues. It also lies in SFM's ability to refine its cost controls as the medical industry evolves. And it lies in SFM's team-based expertise.

These medical services distinguish SFM in the market. If you have questions about them, please contact your underwriter or a claims representative, or you may email or call SFM Medical Services Director Rose Hatmaker, (952) 838-4420.