Case Study: Insurance

Driving $70 million in savings for a workers’ comp payer

HGS transforms coding, interest and penalty, and appeal re-evaluation processes

Overview

Today’s global insurers have, for more than a decade, been shifting strategy to compete in the increasingly consumer-driven marketplace. In 2006, one payer’s immediate need was back-office workers’ compensation medical bill review support. They turned to HGS to provide these services from our Bangalore location. From day one, HGS worked diligently to problem solve and turn critical workflow gaps into opportunity. Over the course of our partnership, HGS has evolved our role—from a transaction partner to a cocreative, trusted resource. What started as one line of business and 26 FTEs has expanded to nearly 10 services delivered by our 215-plus member team, with the clinical expertise of 50 RNs and 70 coders. Today, our payer-provider ecosystem expertise, payment accuracy vigilance, and tactical process reengineering drives results like $70 million in savings over the past three years.

At a Glance

2006 program start
215 FTEs, including 50 registered nurses (RNs) and 70 coders
Services include code review, bill review, relatedness, re-evaluations, KFI, special investigation unit
Delivery from Bangalore, India

The solution

The client has trusted HGS for a widening scope of services, including re-evaluations; complex nurse review for medical necessity, compensability, relatedness/appropriateness; and code review by certified professional coders.

In addition to driving breakthrough savings for this client, HGS has brought innovation, such as our inventory management tool, to proactively manage inventory within state-stipulated timeframes and an accurate coding mechanism, which has detected a 25% rate of coding accuracy opportunity. Today HGS’s consultative, proactive strategy works across siloes to also enhance profitability, provider relations, and member satisfaction—all key to transformation for this client partner.

Throughout our partnership, HGS has demonstrated value that transcends our initial role as a transaction partner. We have provided crucial support to this client’s savings objectives while also co-creating solutions and innovation to support both provider and member satisfaction.

Three key areas of our partnership success:

Medical Relatedness and Accurate Coding Transformation

Three years ago, HGS found the client overpaying claims by 25% compared to their peers in the market. We put together a cost-containment solution, using registered nurses and coders, to strategize more stringent payment integrity to eliminate waste and abuse. To ensure a holistic approach, we focus on two key areas: medical relatedness and accurate coding:

Medical relatedness: The client’s claims audit process and platform proved a sound foundation for HGS’s re-engineering, analytics, and mining capabilities. We set up body part validation and relatedness edits to align with the client’s logic addressing relatedness review. We hired 44 nurses to support flagging and trending of crucial inaccuracies.
Accurate coding: While the client had audit rules in place to review high-dollar claims, there was no systems edit or audit mechanism for -bills at lower dollar value. HGS answered with our claims leakage expertise and analytics to identify higher level evaluation and management bills as easily identified code abuse. We deployed a payment accuracy tool, tailored to the client, to filter and extract sample bills. As part of a pilot, HGS worked to show the client the value we could bring with our CPC-certified coders reviewing medical records, patient history, and severity to determine appropriate coding.

HGS’s end-to-end focus brings this value, to date:

For medical relatedness, HGS has delivered a 10:1 return on investment, with $30 million in savings. The preventive focus is significant, as there has been a noticeable change in provider behavior, as tracked by a robust billing trend improvement. HGS has gone above and beyond, as well, providing additional services as part of this review—such as our extended focus on prior authorizations, objections, denials, and invoice validation. Our custom-built analytics forecast continued success, with benchmarking of trends, savings, provider behavior, and performance.
Our accurate coding and inventory tool pilot was successful, showing savings of up to 40%. Our experienced coders identified an approximate 25% rate of upcoding, with, in some areas, up to 60% codes that qualified for our accurate coding efforts. Our focus on accurate coding has been successful since day one, with improvement to today’s cost savings at approximately $40 million. There are significant provider learnings as a result of this effort, as well, with an improvement of providers executing on first-time-right billing. And, finally, as a true testament to this effort’s success, the client has approved the pilot as well as scale of our coding team to 70 experts.

Interest and Penalty Process

In 2016, HGS initiated a process to solve for a critical workflow gap that resulted in high interest and penalty payments for the client. To address the high interest and penalties incurred by late payments to states, HGS conducted with an analysis to identify gaps in workflow and map dependencies across bill life cycle. This analysis addressed causes of delay and provided avoidance measures. We created a proprietary inventory management tool, customized to the client’s unique workflow set up.

This tool automates assignment, based on aging, with priority assignment based on interest and penalty states. The objective is to identify high-dollar bill assignment, with effective monitoring and escalation through an email trigger.

From 2016-17, the client has achieved a 46% improvement in cost avoidance as a result of interest and penalty reduction. As a result of this interest and penalty avoidance, provider abrasion is decreased. The client’s overall satisfaction is improved, with an enhanced reputation among providers community.

Reduction in Re-evaluation in Appeals

HGS also addressed another provider dissatisfier in the area of re-evaluation appeals. The HGS team used a phased approach over several years to track categories of all re-evaluation appeals. Our technique was to segregate appeals based on provider, system and user issues. We employed real-time feedback for user errors and trend analysis, supported by feedback and coaching. Quality meetings were aligned to consistent communication to the team regarding new error trends.to determine appropriate coding.

Over several years, HGS was able to drive down rework and re-evaluations by 10%.