WELCOA. Making Sense of

Transcription

1 WELCOA Making Sense of Medical Claims by David Chenoweth, Ph.D. An Overview of the Three Phase Approach ust like the overall success of any worthwhile endeavor is directly linked to the quality of the up-front planning process, successful analysis and application of medical claims data depends on a predefined strategy. For many practitioners, it is helpful to separate the process of medical claims analysis into three distinct phases. ABSOLUTE ADVANTAGE 3

2 By making the commitment to following this simple, three-step process, you can confidently embrace the challenge of making sense of your company s medical claims data. ABSOLUTE ADVANTAGE o begin, the first phase in making sense of your company s medical claims data is a general assessment of the health care claims information that is currently available to your organization. This means that you will have to identify and seek out the individual who serves as the keeper of the reports. Once you have found the right individual, you ll then need to gather the existing claims reports, roll up your sleeves, and dive into the paperwork. As you ll soon see, the reports will be filled with all sorts of strange codes and numbers. To make matters worse, you will soon discover that few medical claims reports provide all the information that you need to conduct an accurate analysis. As a result, not only will you have to wade through the existing data, but you ll also have to identify any additional information that will be required in helping you to gain a more accurate picture of your company s health care concerns. In fact, as important as medical claims reports are, you will soon see that the vast majority provide precious little information that is of any real value. While wading through the existing claims information is challenging, the second step making your request for additional information known (and heard) can be equally as challenging. While most people naively think that this step is a no-brainer, it s not. In fact, obtaining additional information above and beyond the standard reports that your insurer or third party administrator provides will take political acumen, perseverance, and, in some instances, even tenacity. If you are fortunate enough to obtain the additional claims information, it s now time to immerse yourself in the data. Thus, as you might have guessed, the third step in making sense of your medical data is a detailed analysis of the actual claims themselves. This detailed analysis is conducted for the express purpose of identifying future strategic directions for your company s health promotion programming efforts. If done well, this analysis will serve as a blueprint to improving your employee s health and well-being. Ultimately, this final step culminates in the formatting of a concise and readable report for key decision-makers. So now that you have an aerial view of what s required to make sense of your company s medical claims, let s take a closer look at each of the three phases. Phase I Cracking the Code Could your program benefit from the application of meaningful medical claims data? Chances are, if you re anything like the majority of programs nation wide, meaningful medical claims data could be of great value. The problem is, deciphering the code can be more than a little tricky. In order to begin Phase I, you ll have to know and understand the differences between the standard types of medical claims provided to employers. In essence, there are three major classifications of medical claims MDCs, ICDs, and DRGs. While the language can be a bit confusing, there is no need to be intimidated by these classifications. For your clarification, a detailed description of each is provided below. 1. MDC (Major Diagnostic Category). MDCs are a broad category which reflects various medical conditions, illnesses, or disabilities usually related to a single body system, (i.e., circulatory, respiratory, musculo-skeletal, etc). For a complete listing of MDCs, please refer to the table on page 7. 4 ABSOLUTE ADVANTAGE

3 2. ICD (International Classification of Disease). ICDs are types of medical conditions, illnesses, or disabilities within a specific MDC. For example, consider the medical condition of arthritis. This condition is a specific ICD that falls under the broad MDC category of musculo-skeletal. 3. DRG (Diagnostic Related Group). DRGs are a group of similar diagnostic conditions, illnesses, or disabilities usually related to a specific body system. For example, DRG #243 (Backache) represents several types of back ailments, ranging from simple backache to back strain/sprain. It is important to understand there are literally hundreds of DRGs. So there you have it MDCs, ICDs, and DRGs. Understanding the three classifications that are used to formulate medical claims reports will enable you to confidently review any existing on-site claims data. While the language is somewhat cumbersome, it s important that you get comfortable with these codes if you plan on having any success in making sense of your medical claims. If you are interested in learning more about the three major classifications, check out the reference section located at welcoa.org/absolute/index.php for a complete listing where you can obtain the appropriate resources. Important note: Understanding the concept of MDCs, ICDs, and DRGs is the easy part. Believe it or not, the real challenge begins once you make your requests for additional information known to your insurer or Third Party Administrator. This brings us to the second phase of making sense of your claims data. WELCOA Phase II Requesting the Right Info Having examined your current medical claims reports as well as having identified the types of additional information you will need to make an accurate analysis, it s time to let your request be known to your insurer or Third Party Administrator. This is where the process can get a little bit precarious. In fact, it is important to understand that most employers receive their claims reports formatted solely by Major Diagnostic Categories (MDCs). As you will recall, MDCs are generic classifications and, thus, do not reveal the specific nature of a person s diagnosis, condition or disease. For example, one of the most common and fairly expensive MDCs at many worksites is Musculo-skeletal. By having MDC claims data that are broken down (itemized) into ICDs or DRGs, you can identify specific conditions, illnesses and/or disabilities such as muscle strains, bad backs, and sprained ankles and, thus, more effectively target health promotion and demand management efforts around prominent and costly claims. In summary, the second important step in making sense of your medical claims is a matter of soliciting in their entirety the appropriate claims data. Once the requested information is in hand, it is then time to turn your attention to reviewing and prioritizing this data. It is helpful to separate the process of medical claims analysis into three distinct phases.

4 Phase III Thinking Strategically In your quest to make sense of your company s health care claims, you have, up to this point, identified the medical claims data that you currently possess and the additional data that you ll need. Furthermore, you will have formally submitted your request for supplemental information to your insurer or TPA. Once the additional data have been received, you are finally in a position to begin using the data strategically. As you begin to immerse yourself in the data, it s important to understand that most health promotion practitioners feel like they have wandered into a strange and confusing land. While there is little guidance to help you make sense of it all, there are some tips and techniques that can make the process a whole lot easier. Develop a spirit of inquiry. Let s face it, for most people, this is a new but very important skill. As a result, you ll need to develop an optimistic spirit of inquiry if you expect to learn more and, at the same time, stay energized. Look for trends and correlations. Once you get comfortable with the layout and content of the actual reports, begin looking for trends and major cost centers. With concentrated attention, you ll be amazed at what the data will reveal. ABSOLUTE ADVANTAGE Focus on conditions that are treatable. Plain and simple, there are numerous acute and chronic medical concerns that fall outside of lifestyle related issues. For example, focusing on congenital birth defects makes little sense for a health promotion initiative. However, because musculo-skeletal (low back pain, etc.) conditions are highly treatable, they make for a fertile area of concentration. Monitor reports consistently. While claims data is vitally important to the success of any health promotion initiative, the fact of the matter is few practitioners use them effectively. If you are to be successful, you ll need to commit to the process and religiously monitor the data. Embrace ambiguity. When it comes to obtaining medical claims data, the entire process is riddled with ambiguity. Health plans change and claims administrators come and go. What s more, the way that claims data are stored and reported is constantly changing. All of this can spell frustration for practitioners. Still, the truly great health promotion professionals wrestle with this ambiguity and make the best of it. Three Phase Checklist I. Cracking the Code 3 Access and review any existing on-site claims reports 3 Determine what type of data are missing in existing reports 3 Formulate questions for requesting data II. Requesting the Right Info 3 Request data from your insurer/claims administrator 3 Obtain data 3 Review data 3 Prioritize data (separate relevant from irrelevant) III. Thinking Strategically 3 Analyze data 3 Identify key trends and challenges 3 Generate findings 3 Develop appropriate health management goals 3 Develop a report for key decision-makers 6 ABSOLUTE ADVANTAGE

5 WELCOA Parting Thoughts While the idea of using medical claims data to guide corporate wellness programming is often discussed, the reality is that very few practitioners ever actually do it. We believe that the major reason why so few people rely on this important source of data is that the vast majority simply do not understand how or where to get the reports and what to look for once they have the information in hand. By making the commitment to following this simple, three-step process, you can confidently embrace the challenge of making sense of your company s medical claims data. MAJOR DIAGNOSTIC CATEGORIES } Blood-related } Endocrine/nutrition/metabolic } Miscellaneous } Pregnancy } Burns } Factors influencing health } Infectious & Parasitic } Respiratory } Circulatory } Female Reproductive } Mental } Male Reproductive } Congenital } Genito-urinary } Musculo-skeletal } Signs/symptoms/ill-defined } Digestive } Injury & Poisoning } Neoplasm (cancer) } Skin/subcutaneous } Ear/nose/throat } Hepatobiliary and Pancreas } Nervous ABOUT: David Chenoweth, Ph.D. For the past 21 years, David Chenoweth has served as president of HMA. He is the author of numerous articles and books on worksite health promotion planning and evaluation. He is a frequent conference speaker and conducts in-house workshops for health promotion professionals in business, industrial, and health care settings. Since 1988, he has served as Chair of the Business & Industry Committee within the North Carolina Governor s Council on Physical Fitness & Health and has served on the faculty at East Carolina University since David earned his Ph.D. at The Ohio State University. To reach Dr. Chenoweth, you can him at chenowethd@mail.ecu.edu. All information Wellness Councils of America (WELCOA) WELCOA provides worksite wellness products, services, and information to thousands of organizations nationwide. For more information visit org. Suggested Citation: Chenoweth, D. (2005). Making Sense of Medical Claims. WELCOA s Absolute Advantage Magazine, 4(6), 2-7. ABSOLUTE ADVANTAGE 7