With diagnostic radiology representing the fastest growing area of medical expense, One Call Medical (OCM) has developed a comprehensive diagnostic management program—known as the DMP Program—to help payers capture the greatest value from their diagnostic tests.

In this month’s News Brief, we look at a blended case study of several OCM clients who implemented the DMP program, and the average savings and cross section of benefits they reaped as a result.

The Payer Challenge: Diagnostic Leakage & Unmanaged Referrals 

These OCM clients began to realize that advanced diagnostic radiology—with its 20 percent annual growth rate—had become a huge cost-containment challenge. This category of medical expense is increasing at twice the rate of prescription drugs and overall healthcare spending. According to a report by the Association of Health Insurance Plans (AHIP), almost $100 billion a year is spent on diagnostic imaging in the U.S., and these costs are expected to double in just five years.

Each diagnostic test represents an opportunity to utilize a diagnostic specialty network—like OCM—to leverage optimal savings, quality providers, and patient advocacy. However, with so many stakeholders involved in the diagnostic referral process, leakage in the form of overpayments for tests and inefficiencies in the referral process can often occur, leading to millions of dollars in waste. 

These clients decided to partner with OCM to help them answer and address the following questions: 

• How much are we spending on diagnostic radiology?

• What proportion of our diagnostic testing is “managed” through a diagnostic specialty network, like OCM, versus “unmanaged”? 

• What percentage of our diagnostic radiology cases could still qualify for network discounts through a retrospective savings program?

• How much could we potentially save by implementing OCM’s comprehensive DMP Program?

• What types of leakage-capture strategies could be implemented to help us facilitate a greater shift to “managed” referral activity?

The DMP Solution

One Call Medical’s DMP Program is a complete turnkey solution that enables workers’ compensation (WC) payers to achieve greater diagnostic savings and quality. The program consists of three key components: 1) a proprietary analysis, 2) a retrospective savings program, and 3) leakage-capture strategies and solutions.

OCM’s Proprietary Analysis

The core of the DMP Program utilizes OCM’s proprietary analytics. As the largest, most experienced provider of diagnostic testing for workers’ compensation, OCM manages more than 400,000 diagnostic tests each year. As a result, OCM was able to work with these case study clients to obtain their diagnostic spend data in order to perform an in-depth assessment of their referral activity and patterns. 

This analysis helped the payers to become more aware of their total diagnostic spending and to understand their breakdown between “managed” and “unmanaged” activity. A referral is effectively “managed,” if it is channeled through a specialty network, like OCM, and thus, payers reaped the benefit of optimal savings and quality. On average, however, clients typically experienced the following referral breakdown, prior to implementing the DMP Program:

The 67 percent unmanaged referral activity represents a significant opportunity to leverage additional network savings and quality. Many payers don’t realize the extent to which leakage is occurring within their diagnostic referral process. OCM uses this proprietary analysis to help payers identify problem areas and to develop a customized approach to capture optimal savings through both retrospective and prospective means.  

Retrospective Savings

In order to leverage OCM’s network discounts—which can be as high as 45 percent nationally on average—diagnostic referrals must be actively channeled through OCM’s scheduling model. In some cases, payers may have utilized an OCM contracted provider, but since it was not properly channeled through the OCM scheduling model, the payer did not benefit from the appropriate discounted rates. 

To address this missed opportunity, OCM offers a Retrospective Savings Program. With typical clients, an average 10 to 15 percent of diagnostic tests may still qualify for network discounts. OCM re-prices those imaging services, pays OCM contracted provider, and bills the payer at the discounted rate. Retrospective savings are a substantial and immediate benefit to payers. 

Leakage-Capture Strategies 

In the next phase of the DMP Program, OCM helped the payers in this case study to drill further into their radiology spend data and scan distribution data to identify additional opportunities for prospective savings. The reports were broken down and illustrated in a variety of ways, including by state, employer client, regional claims office, and even down to the adjuster level to examine an individual’s referral patterns. This in-depth analysis helped OCM and its clients to pinpoint where and why referrals were made to out-of-network providers.  

To address each payer’s unique set of referral challenges, OCM customized a unique combination of leakage-captures strategies:

• Mapping Network Coverage. In many cases, claims adjusters and nurse case managers did not know that testing facilities were part of the OCM network or they didn’t know where OCM providers were located. OCM’s geo-mapping tools validated network access by identifying OCM contracted providers within a reasonable radius to locations with an unusually high volume of “unmanaged” referral activity.

• Workflow Improvements. In some situations, a payer’s diagnostic referral process was not conducive to optimally channeling referrals through OCM’s scheduling model. OCM workflow consultants helped payers assess and improve their referral process.

• DMP Training. Claims adjusters and nurse case managers may not have understood the importance of diagnostic management or how to ensure they’re facilitating “managed” referrals for each and every test. OCM offered a variety of training options, including web-based CEUs, self-paced modules, comprehensive office trainings, and one-on-one consultations. Education helped the staff to more consistently schedule with OCM in order to maximize diagnostic discounts.

• Ease-of-Use Tools. To further reduce leakage, OCM also offered “ease-of-use” tools, which streamlined test requests via phone, Internet, and fax to more seamlessly transfer referrals through the OCM scheduling model. These tools made it easier for adjusters, nurse case managers, and treating physicians to properly channel referrals for optimal “managed” activity.

The DMP Winners’ Circle: Shifting Referrals from “Unmanaged” to “Managed”

With diagnostic radiology utilization spiraling ever higher, the clients in this case study took proactive steps to control both the costs and quality of their scans. The DMP Program provided these payers with a very structured and systematic approach. After implementing the programs and strategies, these clients were able to generate an overall shift from “unmanaged” to “managed” referral activity, so a greater number of their diagnostic radiology exams were channeled through OCM.

Here’s what the typical breakdown of referrals looked like after implementation:

On average, this shift means that DMP Program clients significantly reduce their total universe of advanced diagnostic spending. By using the DMP Program, clients analyzed in this blended case study effectively managed a higher percentage of their tests through OCM, and as a result, they saved a total of about $13.6 million dollars.

In the past, injured workers may have missed time from work while waiting for tests to be scheduled and medical reports to be received. By better managing referrals through OCM, tests are now performed promptly, reducing the time between the referral being requested and the patient being treated and returned to work.

In addition, payers have peace of mind in knowing that tests are performed by quality facilities and reviewed by quality reading radiologists, who deliver accurate diagnostic information. Industry studies claim that a significant portion of tests provides inconclusive data. With OCM, there is less than a 1% complaint rate on scans performed within its network. This statistic speaks volumes to the quality of OCM’s providers.

Ultimately, a managed referral leads to improved medical care and outcomes for injured workers. As a result, a higher volume of managed activity also increases a payer’s overall medical and claims savings. Across its entire client base, OCM saves payers more than $170 million a year.

For more information on OCM’s DMP Program, and how you, too, can join the “winners’ circle” in achieving outstanding diagnostic savings and quality, please contact:

Bill Colacurcio
Phone: 973-316-3718
Email: bill_colacurcio@onecallmedical.com