Reprinted with permission from the January 2015 issue of Claims magazine

January 2015

Volume 63 . Number 1PropertyCasualty360.com

A PUBLICATION

KPIs FOR INSURERSPG 30

DUTY TO DEFENDPG 34

AUTO EXCLUSIONS AND FORKLIFTSPG 22

PROVIDER NETWORK PROGRAMSPG 26

The Business of Insurance

The National Underwriter Company

26 JANUARY 2015 Claims Magazine PropertyCasualty360.com

receive contracted discounts beyond state fee schedules and bill review reductions. By helping injured workers get healthy in a more cost effective way, workers’ com-pensation insurers’ can clearly show their concern for their customers in a fiscally responsible manner and lower their over-all claims costs in order to remain com-petitive within the industry.

To execute an effective provider net-work program, it is helpful to examine the five key pillars of a successful program. Each pillar is a fundamental component of the program and together they form a strong, supportive foundation for success.

A strong provider network program is critical to a prop-erty and casualty (P&C) insurers’ cost containment,

benefit extension and customer retention strategies. Both in the workers’ compen-sation and auto casualty markets, one tremendous opportunity to retain cus-tomers and maintain a competitive edge comes from the lower claims costs as-sociated with provider bills that fall into provider networks.

Positive customer satisfaction is a re-quirement for retaining customers and growing a business. The claims process

is one of the best opportunities for P&C carriers to provide added value to their policyholders. For auto insurance carri-ers, using voluntary provider networks lowers the costs associated with claim-related medical treatment and enables policyholders to receive additional, nec-essary, medical care since they will not reach their policy limits as quickly. This translates to customer benefit extension, which in turn can drive a better customer retention outcome.

In workers’ compensation, a reduction in claims cost is achieved through access-ing a preferred provider organization to

The Five Pillars of a Provider Network ProgramBy Lee Haripko

PropertyCasualty360.com Claims Magazine JANUARY 2015 27

Pillar #4: ReportingA person cannot improve on what cannot be measured. Reporting is another key element that pro-vides valuable insight into the progress of the provider net-work program. Take for ex-ample personal financial port-folios — a person allocates dollars to specific investment vehicles, then monitors, rebalances, and reconfigures based on the re-

sults. A best-in-class provider net-work program should be following a

similar model. However, customers of provider network programs are also responsible for achieving the

best results for the organization and policyholders. Executive-level reporting of program-

wide results is built from a re-porting foundation of granularity,

which should allow the customer to analyze results in the most detailed fashion. With a compre-

hensive reporting platform, the program can be evaluated and adjusted as needed.

Pillar #2: Single-Source ManagementThere exist a broad array of provider net-works, a number of which have differing merits. As a P&C carrier, managing those networks individually can be challeng-ing and ineffective from both an ef-ficiency and cost perspective. An effective partner should provide single-source management for all partners and their respective solu-tions. Partners should be able to create management programs that help to analyze and opti-mize networks based on work-flow and bill analysis; handle any provider disputes expeditious-ly; and provide subject matter expertise in the areas of technol-ogy, compliance, and net results.

A proactive approach to managing the provider network relationship is essential to gaining better insight

into the program. The provider network management program should also have a workflow

analysis component, since it is the combination of business rules,

technology solutions and network yield that contribute to the suc-cess of the program.

Pillar #3: TechnologyTechnology plays an important role in any provider network program and drives adjuster workflow. A robust medical bill

review software solution is a necessary element for the provider network pro-gram. Turnaround time is essential — most importantly, it provides the neces-sary time and quick content to support

proper claim payment decisions; and maintains strong provider relation-ships to promote the most seamless outcomes for the claimant. The availability of pre-built technology bridges, including real-time bridg-

es from the bill review solution to the provider network is es-sential to sending bills over to

the providers for repricing. This integration between the software

solution and the provider network increases both efficiency and the effectiveness of the program.

Pillar #1: OptimizationOptimization analysis is the evaluation of a network mosaic that drives the best possible yield. Partners in provider net-work management likely offer a wide array of networks — specialty networks,

geographically focused networks, pharmacy net-works, out-of-network ne-gotiation services and spe-cialty bill review. The key to maximizing the value of

these various types of provider networks is the ability to analyze

the best combination to fit a business. The

hierarchy of the net-works and cost con-tainment solutions

have a tremendous impact on penetra-tion rates, customer benefit extension, and turnaround times.

Ongoing analysis utilizing rich data sets and technology-based optimization tools are critical to maximizing overall success of a provider network program. In addition, it is beneficial to analyze workflow to ensure that it maximizes the opportunity of using a provider network program and out-of-network solutions.

28 JANUARY 2015 Claims Magazine PropertyCasualty360.com

Pillar #5: Integrated WorkflowBill review system integration provides a great deal of transparency and control into provider network be-havior and recommend-ed repricing. The ability to review provider net-work reductions either before or after a trig-gering event, along-side the flexibility of setting automated flags, rules, and intelligent logic, cre-ates the most seamless of provider network programs. Integrated workflow overlaps with several of the other pillars, enabling better reporting and speed to execution. It also allows a partner who understands the workflow to consult, advise and drive even greater results.

Provider network programs can deliver cost containment advantages and the op-portunity to extend customer benefits. Though the provider network partner should carry the vast majority of pro-gram responsibilities, maximizing return on investment and optimizing outcomes is a joint effort.

Lee Haripko is senior manager of strategic partners at Mitchell International Auto Casualty Solutions.

Integrated workflow overlaps with several of

the other pillars, enabling better reporting and speed to execution.

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