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Industry Trends
Report
Volume Four Number ThreeQ3 2015Published by Mitchell
FEATURED IN THIS ISSUE:
Proactivity in Regulatory Compliance in Casualty Claims By Trevor DavisDirector, Regulatory Affairs, Mitchell Out of Network Solutions
By Michele Hibbert-Iacobacci, CMCO, CCSPVP, Information Management & Support, Mitchell Casualty Solutions
Industry Trends
ReportTable of Contents
4 Quarterly FeatureProactivity in Regulatory Compliance in Casualty Claims
10 Medical Price Index
12 Bonus FeatureA Closer Look at User Experience
14 Data Insights
16 Compliance Corner
18 Current Events
22 About Mitchell
23 Mitchell in the News
Volume Four Number Three
Q3 2015
Click here to view theAuto Physical Damage Edition
Alex Sun President and CEO, Mitchell
A Message from the CEO
Untangling Regulatory Compliance
Welcome to the Q3 Edition of the 2015 Casualty Mitchell Industry
Trends Report. In this issue we go deep into regulatory compliance
and the central role it plays in casualty claims. As you know, this is
an area that is constantly changing, much like our other focus topic
where we examine the increasing importance of user experience and
how it has become a key differentiator across industries.
In our feature article on page 4, Proactivity in Regulatory Compliance
in Casualty Claims, authors Trevor Davis and Michele Hibbert-
Iacobacci discuss current casualty claims trends and speak specifically
to the ways we work to ensure our solutions are effectively solving
today’s challenges. Trevor and Michele look into regulatory
compliance as it affects bill review, workers’ compensation
negotiations, fee scheduling and more. I hope these insights help to
illuminate further some of the intricacies surrounding these areas.
In our bonus article on page 12, A Closer Look at User Experience,
we delve into the growing importance of this role in highly
competitive markets. Here at Mitchell, we place a strong focus on user
experience and its value in making our customers’ jobs easier and
more productive. User experience is certainly making strides across
industries to provide a strong differentiator for companies and a
better experience for their customers.
I hope our experts’ views on the ongoing changes in regulatory
compliance and the value of user experience leave you with some
interesting ideas for your own organization. Thank you for your
continued readership of the Industry Trends Report and I hope you
enjoy the rest of your summer.
Alex Sun
President and CEO
Mitchell
4 Quarterly Feature
Proactivity in Regulatory Compliance in Casualty ClaimsBy Trevor DavisDirector, Regulatory Affairs,Mitchell Out of Network Solutions
By Michele Hibbert-Iacobacci, CMCO, CCSPVP, Information Management & Support, Mitchell Casualty Solutions
Regulatory compliance is the
central building block of medical
review systems in casualty claims.
Whether the systems are using
sophisticated technology or
manual processes in proactive,
retrospective or concurrent
review, attributes of regulatory
compliance are the core of decision
making. States create laws that
can represent the political climate
in the state or be the result of
negotiations with politicians
between one lobbying group
to the next. If subject matter
expertise is omitted from the process,
unexpected consequences can
happen that may end up negatively
impacting the reason change was
sought in the first place.
When asked about the duties we
perform in the Property and Casualty
industry, the term “regulatory
compliance” is seldom invoked.
Regulatory compliance often
conjures dry images of a tangled,
inert briar patch of minutiae,
sub-subparagraphs, and columns
upon columns of 4.5 point type.
Rather, we explain to people that
our regulatory efforts help our
customers “do the right things
under the laws governing their
business.” Regulatory compliance
at Mitchell involves the use of
technology to facilitate complex
rules, fee schedules, and customer
specific requirements. Technology
has created a competitive
industry where delineation of one
application can be considered
unique based upon the
multitude of rules that can
be creatively automated.
With respect to specialty bill
review and negotiations in the
workers’ compensation arena, this
translates into helping customers
pay the appropriate amount
for medical bills. This ongoing,
active and interactive process
implements several key predicates:
1) understanding the correct law
to apply, including its details,
nuances and blind-spots; 2)
understanding that the law is not
static; and 3) effective application
of our expertise.
5
Michele Hibbert- Iacobacci, CMCO, CCSP VP, Information Management & Support, Mitchell Casualty Solutions
As Vice President, Information
Management and Support for
Mitchell’s Casualty Solutions, her
responsibilities include Health
Information Management,
Regulatory Compliance, Professional
Services, Litigation Support, and
Consultant to Advanced Analytics
& Consulting. For the past 25 years,
Ms. Iacobacci’s focus has been
on working with major casualty
insurers implementing rules
committees, quality assurance, risk
management, compliance programs
and review processes necessary
in delivering objective bill review
systems. Ms. Iacobacci is a Certified
Clinical Coding Specialist (CCS-P),
and a member of the American
Health Information Management
Association (AHIMA).
Trevor Davis
Director, Regulatory Affairs,
Mitchell Out of Network Solutions
Trevor Davis serves as Director of
Regulatory Affairs with Mitchell.
Trevor joined Mitchell through its
acquisition of FairPay Solutions in
the spring of 2014. Prior to working
at FairPay, Trevor was corporate
counsel with Louisiana Workers’
Compensation Corporation. Since
2008, Trevor has lead FairPay’s
government relations unit, which
conducts legislative lobbying and
administrative agency outreach.
He also leads the specialty bill review
analytics team, which fulfills data
and regulatory compliance duties.
Mr. Davis earned his JD from the
Louisiana State University Law
Center, and received his BA from
Louisiana State University in Baton
Rouge, LA.
About the Quarterly Feature Authors…
Proactive leadership
is accomplished
through intelligence
gathering,
relationship building,
thought leadership
and continuous
participation in key
jurisdictions.
Quarterly Feature
6
rules can be applied. Often
medical bills are adjudicated
before fee schedules are applied
due to insufficient information;
improper coding or incomplete
provider information. Having
a good bill to pay in casualty
from the start would save time,
resources and expense to both
the insurer and provider. This is a
consistent expectation in every
jurisdiction whether fee schedules
and payment rules have been
implemented or not.
There exists great variety among
the terms and obligations created
in workers’ compensation or
personal injury protection acts of
the states. The amount to pay for
a given medical treatment in New
York will differ greatly in the way
it is determined as compared to a
treatment rendered in Missouri,
or Louisiana, or Nevada. While the
terminology “usual and customary”
and “usual charge” and “prevailing
amount” and “prevalent rate” may
seem innocuously interchangeable,
the differences in precise meanings
assigned by the governing
state law may result in actual
dollar differences ranging in the
thousands. Paying an appropriate
amount therefore naturally arises
from understanding the right law
to apply to the right bill under the
right circumstances. The term usual
and customary in one state may
not have the same definition in
another state. For example under
Pennsylvania No-Fault, the usual
and customary charge (PA31 s
69.3) is defined as “The charge
most often made by providers of
similar training, experience and
licensure for a specific treatment,
accommodation, product or service
in the geographic area where
the treatment, accommodation,
product or service is provided.”
Under New Mexico workers’
compensation, the same term is
defined (11.4.7.7 NMAC) as “…the
monetary fee that a practitioner
normally charges for any given
health care service.”
While generally slow to be
changed, workers’ compensation
acts are not written in stone.
What “is” in terms of a payment
obligation on a medical bill does
not necessarily equate to what
Often we hear from insurers in all
areas of healthcare payments, “We
simply want to pay what is owed”
and abide by the laws in
our jurisdiction.
Understanding the correct law to
apply is a key first step, and one
of the more important principles
in this process is knowing the
correct hierarchy of the law
to apply. Many in our industry
reflexively look to a fee schedule
or similar administrative regulation
as the beginning and ending in
answering the seminal question of
“how do I determine the correct
amount to pay for this medical
bill?” While a fee schedule or other
administrative rule—where it exists
—may ultimately supply a correct
answer on the payment question, it
is not the proper first or controlling
step in the decision tree for paying
a medical bill. The law, as set forth
in the governing jurisdiction’s
workers’ compensation or personal
injury protection act, is the proper
starting point and operates over
and above any answers found in a
fee schedule.
When automating rules, the
last item considered is the price,
which is often quantified by a fee
schedule. Examining whether or
not the bill is even payable and
contains all the elements needed
to process is the primary area of
review before any jurisdictional
There exists great
variety among the
terms and obligations
created in workers’
compensation or
personal injury
protection acts of
the states.
Quarterly Feature
7
“always shall be” or what “should
be.” A thorough understanding
of the current state of the various
workers’ compensation acts—
including the compromises that
drove a particular drafting choice,
the purposes and intended
interactions of distinct sections of
law, and the challenges that were
being addressed—provides an
invaluable backdrop against which
to measure, examine and propose
changes to a given workers’
compensation statutory structure.
In P&C claims, not all claims
adjudication guidance is provided
in statutes. In auto claims, the
policy is the guide in payment and
defines the references whereby
the bills are paid and adjudicated.
Policies allow the insurer to set the
contract agreement and provide
clarifications with the insured.
Examining, shaping and steering
these legislative changes reflect a
mindset and process that helps set
Mitchell apart in its approach to
regulatory matters. The ability to
proactively shape the environment
in which we and our customers
operate enables us to be that
much more effective in helping
our customers do the right thing
under the law. Where we see
needed areas of clarification, as
in legislative proposals needing
subject matter expertise, we can
proactively provide information
that can assist in understanding
proposal data. In cases where
a proposal may end up with
suggestions such as the use of a
database that contains insufficient
data or application of a federal
program without consideration of
auto accident claimants, our insight
into the health and casualty market
provides a valuable resource to the
market, regulators, public policy
and consumer organizations.
This proactive leadership is
accomplished through intelligence
gathering, relationship building,
thought leadership and continuous
participation in key jurisdictions.
News on events and trends come
to us from a variety of sources,
including our client contacts,
industry trade associations,
attorneys who practice in workers’
compensation, auto forums, and
professional lobbyists. Of these
sources, the lobbyists are often the
greatest asset and differentiator.
Mitchell has retained the services
of multiple firms who specialize in
government relations, and these
firms act year-round to facilitate
our interactions with government
Quarterly Feature
8
agencies, policymakers, fellow
workers’ compensations system
stakeholders, and key legislators.
The in-state lobbyists frequently
know the best ways to translate
our issues into language that
resonates with the local audience,
as well as providing guidance
through the procedural maneuvers
unique to each state’s legislative
flow. The industry trade groups
and partners also provide valuable
insight into industry objectives and
early signs that change is coming.
Our broad-based exposure to
trends, challenges, experiments
and solutions across diverse
jurisdictions makes us a valued
resource to legislators and
policymakers in a given state.
Whether supplying information
in informal meetings, submitting
written comments at workshops,
or rendering live testimony at
legislative committee hearings,
Mitchell’s regulatory team seeks
to create system-wide beneficial
changes. Sometimes the most
seemingly innocuous changes in
fee schedules have the potential to
cause havoc with our customers’
operations. Our wide range of
experience can provide significant
insight when changes are
proposed. Recently, we provided
testimony in New York regarding
the timeframe of implementation
of workers’ compensation and
no-fault fee schedule changes. The
depth of changes and timelines for
implementation were of concern
to our customers and we provided
suggested timelines that would
allow technology solutions
to be implemented.
Not all laws are created equal,
and not all changes create
balanced benefits. Each state
takes an approach that is tailored
to the economic realities,
political leanings, and traditional
problem-solving practices of that
state. Despite the diversity of
the particular systems adopted
by the various states, there are
some common elements to
those systems that create greater
system-wide benefits. Our multi-
jurisdiction experience has given
us valuable insight on the
following elements:
• Employer direction of the choice
of primary medical provider.
As the medical portion of each
dollar spent on claims benefits
grows yearly, it becomes ever
more imperative for payors to
have the ability to identify and
utilize those providers who share
and implement the return to
work treatment philosophy.
• “Reasonableness” as a
fundamental pillar of the
provider payment standard. This
concept can mitigate some of
the financial incentives driving
medical providers’ charging
practices, such as cost-shifting to
workers’ compensation payors
to re-coup shortfalls from other
payor types.
• Area-based comparisons built
into the payment standard.
Measurements of the billed
charges in question against
providers in the same geographic
area helps create a check against
higher than average individual
provider charging practices.
• Protections against balance
billing of injured claimants
and direct billing of insured
employers. Perhaps the most
critical component of any
system, protecting the injured
worker or insured from strong
arm collection tactics allows the
payor to pursue a legitimate
Our broad-based
exposure to
trends, challenges,
experiments and
solutions across diverse
jurisdictions makes
us a valued resource
to legislators and
policymakers in a
given state.
Quarterly Feature
9
dispute with the provider without
the risk that the injured worker
will be harmed as a result.
• Hard and fast deadlines for
medical providers to formally
file fee disputes. Requiring any
disputes to be brought in a short
period of time assists in closing
claims files and can reduce the
number of disputes.
• Enforcement of a substantive
burden of proof on the moving
party in a formal dispute.
Requiring the provider to prove
that its charges are reasonable
and meet the standard for
payment substantially cuts
down on the volume of
frivolous disputes.
• Timelines for implementation
of changes in technology. The
difficulties with retroactive
changes and short timeframes
can be mitigated by commenting
or testifying on a reasonable time
line and effective dates.
• Assisting in educating payment
methods. Many proposals
containing several choices of
payment methodologies can be
written into proposed legislation
without the entire picture or
knowledge of how it will affect
payments. Providing this insight
to the industry allows appropriate
understanding of all elements
in the data.
• Providing trend information.
Real-time trend information
is valuable in demonstrating a
forward thinking model for the
industry.
• It provides current healthcare
trends that affect the casualty
market.
While no single state system has
all of these elements, Mitchell’s
regulatory efforts have achieved
successful adoption of several of
these beneficial changes. Filing
deadlines reinforce principles
of timeliness, fairness, and
efficient allocation of workers’
compensation judicial resources.
Explicit periods, whether
appearing in statute, rule or by
jurisprudence, can assist payors
in better determining and
managing appropriate reserving
levels for claims expenses for all
lines. Protecting injured workers
from balance billing from
medical providers maintains
a key characteristic of the
“grand bargain” reflected in the
fundamental structure of workers’
compensation systems.
Just as workers’ compensation
and personal injury protection
systems are not in stasis, the
foregoing list of issues is not
the final word on desirable
legislative changes. Before we
know it, value based healthcare
regulations will be permeating
the casualty market and require
much more consideration and
creative thinking. The most
effective changes have come
through a process that identifies,
clarifies and posits solutions with
the active input and assistance
from our clients. Knowing and
demonstrating the practical
consequences of legislative
and regulatory edicts are highly
persuasive tools in the efforts to
assist legislators and regulators
develop sound policy. The more
information, suggestions, and
experience we can learn from
our customers ultimately makes
our regulatory efforts even more
effective in proactively helping
our customers do the right things
under the laws governing
their business.
Quarterly Feature
10 Medical Price Index
The National MPI increased 0.71%
in Q1 2015, while the National
CPI for All Services, as reported
by the Bureau of Labor Statistics,
decreased 0.71%. Since Q1 2006,
the MPI has increased 17.74%
while the National CPI for All
Services increased 18.13%.
(Source: U.S. Bureau of Labor Statistics,
adjusted. Consumer Price Index- All
Services- All Urban Consumers, Series
CUUR0000SA0. Available at http://data.
bls.gov/cgi-bin/surveymost?cu)
Charges associated with physical
medicine services saw a 1.25%
increase in Q1 2015, the second
largest single period rise in unit cost
since Q1 2006. This increase brings
the total units cost change for
physical medicine since Q1 2006
to 4.06%.
The unit cost for major radiology
services continued to trend
downward in Q1 2015, decreasing
0.53%. Q1 2015 represents the
fifth consecutive quarter that unit
cost decreased for major radiology.
Medical Price Index (MPI)
The unit cost for evaluation and
management services increased
2.35% in Q1 2015. Since Q1 2011,
evaluation & management services
have experienced a 21% increase
in unit charge, or 1.24% per quarter.
The unit charge for professional
services in the emergency room
increased another 7.1% in Q1 2015,
bringing the total increase since
Q1 2006 to 75%.
Q1 2015 represents
the fifth consecutive
quarter that unit cost
decreased for major
radiology.
11
0.00
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
25,000,000.00
90
95
100
105
110
115
120
125
130
135
140
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
2010
Q2
2010
Q3
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
National MPI
Total Units National MPI CPI All services
National MPI
0.00
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
25,000,000.00
9095
100105110115120125130135140
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
2010
Q2
2010
Q3
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
Physical Medicine MPI
Total Units National Service Group MPI CPI All services
0100,000200,000300,000400,000500,000600,000700,000800,000900,0001,000,000
90100110120130140150160170180190
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
2010
Q2
2010
Q3
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
Evaluation & Management MPI
Total Units National Service Group MPI CPI All services Linear (Total Units)
Evaluation & Management MPI
Physical Medicine MPI
-10,000
10,000
30,000
50,000
70,000
90,000
110,000
130,000
150,000
9095
100105110115120125130135140
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
2010
Q2
2010
Q3
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
Major Radiology MPI
Total Units National Service Group MPI CPI All services
Major Radiology MPI
-10,000
10,000
30,000
50,000
70,000
90,000
110,000
130,000
150,000
90100110120130140150160170180190
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
2010
Q2
2010
Q3
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
Emergency Room MPI
Total Units National Service Group MPI CPI All services
Emergency Room MPI
Medical Price Index
12 Bonus Feature
A Closer Look at User Experience
By William WalkerSenior User Experience Engineer
User experience, or UX, is a term
that is becoming more and more
prevalent in technology companies;
however, not everyone has a
good understanding of what user
experience really is, or how it impacts
an organization and its clients.
At its core, user experience in the
technology industry can be defined
as the process of designing digital
experiences that take into account
the specific needs, attributes and
goals of users in order to make
users more productive, as well as
make their jobs easier and more
enjoyable. The importance of user
experience has grown in recent years
as companies across all industries
have discovered its importance as
a key differentiator in often highly
competitive markets.
Most user experience professionals
have a background in psychology
and cognitive science, which is useful
for observing and understanding the
behavior and needs of users. Others
have a background in computer
science, and even graphic design,
which also are useful when designing
user interfaces that are organized,
intuitive and visually compelling.
User experience professionals utilize
a variety of methodologies to
develop their deep understanding
of users. These include, but are
not limited to, task and workflow
analyses, contextual inquiries (a form
of in-field observation), as well as
structured interviews and surveys.
Typically these findings are used to
create what is called a “User Persona.”
The User Persona is a description of
a fictional, yet realistic target user
of a specific product which details
various attributes such as age,
gender, behaviors and goals. The User
Persona is given a name and face and
ultimately treated as a real person.
The User Persona is key in conveying
to all team members (including
program managers, developers and
QA testers) who the user is and how
we are expecting our software to
make them more effective in their job.
The User Persona is an important tool
in navigating the trade-offs between
what we design and what we are able
to deliver. Mitchell’s User Experience
team has created 24 user personas
representing various users across our
software portfolio.
13
Design work
typically begins with
brainstorming and
the white boarding of
ideas to illustrate how
the feature might look
and behave.
Since the product managers are
responsible for developing new
products and improving existing
solutions, working with product
managers is an important component
of the user experience professional.
This process typically starts with
product management working with
the user experience team about an
idea for a new feature or product.
Working together, they scope out
what they’re trying to accomplish
with the new feature. These new ideas
can often be mapped back to user
needs detailed in the User Persona.
Design work typically begins with
brainstorming and the white boarding
of ideas to illustrate how the feature
might look and behave. These
whiteboard sketches eventually evolve
into more defined wireframe drawings
including more and more details as
the design progresses. With the help
of program managers, these ideas
are ‘shopped around’ for feedback
from internal subject matter experts
and stakeholders. As the designs
are iterated and improved, the
feedback loop is extended outside
the organization to clients. Review
sessions are set up with the assistance
of account managers where
the wireframes are presented to
potential users to gather their input
and suggestions to validate the
proposed design.
Often times more complicated
features incorporate the use of
clickable prototypes created by the
UX team. In this process, wireframes
are further evolved to include
interactive behaviors using HTML
prototyping software. The result is an
interactive simulation of the feature
that allows for a realistic preview
of how the feature will behave in
product. Clickable prototypes offer
the opportunity to conduct usability
testing with potential users by
allowing them to perform tasks on
the prototype. Their performance
of these tasks can be measured and
used to further improve and validate
the proposed design. Users may also
be asked to rate features to help
with development prioritization.
This information is fed back into the
improvement and redesign process
so that the eventual product design
better meets client needs.
These research results, both informal
and formal, are critical in helping to
prioritize the direction the product
should take and in evaluating the
development timeframe. User
experience helps to determine what
product changes can be made early
on in the product development
process, which helps to lessen
the resource impact on internal
teams. There may be design
trade-offs during this stage of the
development process, so often
times the User Persona information
is used as a baseline for measuring
the impact to clients. This iterative
process involving user experience,
product management and clients
is extremely valuable in collecting
feedback and insight to help create
a better product with a great
user experience.
So what’s next for user experience?
On a constant quest to be up-to-
date on the latest research, software
tools and trends, the Mitchell user
experience team attends industry
conferences to stay current with
ongoing trends and learn from
industry leaders, which they can
then apply to new features and
solutions. Trends in the industry
include responsive design, which
enables software applications to be
deployed for optimal experiences
across multiple platforms (desktop/
internet/tablets and phones).
(Several of Mitchell’s products are
now optimized for use on tablets).
User experience can certainly have
a big impact and it’s clear that this
collaborative process has
benefits for both companies
and their customers.
Bonus Feature
14 Data Insights
We took a look at the total cost
of medical treatment associated
with claimants that sought care
in the emergency room and
compared it with the total cost of
medical treatment for those that
did not seek emergency room care.
The four graphs compare the total
cost of medical care for claimants
treating in the emergency room
and not seeking emergency room
care. The data is aggregated by loss
quarter; therefore the downward
trend is the result of claim maturity
and not a true reflection claim
severity trending. In Florida,
Texas and New York, the total cost
of medical care for those claimants
that never sought emergency
room care is higher than those
claimants seeking emergency room
care. For comparison, we included
Washington state where claimants
seeking emergency room care
actually had a higher overall claim
cost associated with them
for medical care.
Data Insights
The four graphs
compare the total
cost of medical care
for claimants treating
in the emergency
room and not seeking
emergency room care.
15
01000200030004000500060007000
2012 2013
Total Cost Comparison- New York
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
ER Claimants None ER Claimants
Total Cost Comparison—New York
0
1000
2000
3000
4000
5000
2012 2013
Total Cost Comparison- Washington
Q2_2014 Q3_2014 Q4_2014 Q1_2015Q1 2014
ER Claimants None ER Claimants
Total Cost Comparison—Washington
0
2000
4000
6000
8000
10000
2012 2013
Total Cost Comparison- Florida
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
ER Claimants None ER Claimants
Total Cost Comparison—Florida
0
1000
2000
3000
4000
2012 2013
Total Cost Comparison- Texas
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
ER Claimants None ER Claimants
Total Cost Comparison—Texas
ER Claimants No ER Claimants
Data Insights
16
Compliance in the Property &
Casualty Insurance world can
be a challenging endeavor, due
to the ever-changing regulatory
environment. At Mitchell, we
recognize these challenges and
provide updates and insight
throughout the year. Here’s a
quick recap of some recent
changes in the regulatory
compliance arena:
President Signs HR 2 and Averts 21% Provider Payment CutsIn the March Fee Schedule and
Legislative News, we highlighted
information on House Resolution
(HR) 2 containing the SGR fix
and Medicare provider payment
improvement act. This bill has had
significant movement over the last
month with passage by the House
The Compliance Corner
The Compliance Corner
of Representatives on March 26,
2015, passage by the Senate
on April 14, 2015 and signing of
this bill by the President on April 16,
2015. This bill averts the cuts of 21%
for providers and eliminates the
sustainable growth rate (SGR). The
adopted resolution can be viewed
in its entirety from the link.
H.R. 2
Compliance in the
Property & Casualty
Insurance world can
be a challenging
endeavor, due to
the ever-changing
regulatory
environment.
17
New YorkNew York On May 14, 2015, the
NY WCAB posted Subject Number
notifications 046-766, 046-767
and 046-768. These subject
numbers all deal with the
authorization of providers who are
allowed to treat injured workers
under workers’ compensation.
• Subject No. 046-768 Changes to
the list of Health Care Providers
Authorized to Render Services
to Injured Workers under the
Workers’ Compensation Law
Subject No. 046-768
• Subject No. 046-767 Newly
Authorized Health Care
Providers Approved to
Render Services to Injured
Workers Under the Workers’
Compensation Law
Subject No. 046-767
CaliforniaThe state adopted its updated
rules and Medical Implementation
Guide 2.0. It will be effective for use
on April 1, 2016. The following are
some of the major changes made
to the Medical EDI.
• Based on the IAIABC Release
2 Medical Bill Record with
California specific variations.
• Moving from ANSI X12 4010
to ANSI X23 5010 format.
• Added a number of new data
elements.
• Approved by the OAL on April 6,
2015. Effective for use on April 1,
2016. The rules and guidelines
can be accessed on the state’s
web site.
Workers’ compensation
information system (WCIS)
regulations
FloridaOn May 11, 2015, the state posted
a proposed revision to the Workers’
Compensation Medical Billing,
Filing and Reporting Rule currently
under Rule 69L-7.710. The proposal
includes some substantial change
by rewriting and reorganizing Rule
69-7.710 and dividing it into five
sections.
The proposal can be viewed on the
Florida Administrative Register web
site.
Notice: 15979603
South Carolina On May 6, 2015, the state posted
notification of the Commission’s
process change in medical dispute
filing. The state has indicated that
it will now accept the medical bill
disputes via secure email.
For more information on the
medical payment dispute
resolution process and the filing
of the forms through the secure
email, please see the link below.
Payment Dispute Resolution
Process
The Compliance Corner
18
For those who work in the
insurance industry, there are so
many tales relating to insurance
fraud. From slip and falls to arson
and murder for life insurance
policies, there is no end to the
creativity of fraudsters who cost
American consumers upwards
of $80 billion dollars per year. After
narcotics trafficking, insurance fraud
is the largest criminal enterprise in
the United States. Not surprisingly,
the two are often interrelated.
Read More
Current Events
Counting the Cost of America’s Insurance Fraud Epidemic
From PropertyCasualty360.com
Publish Date: April 15, 2015
By Christopher TidballSenior Director, Casualty Solutions Consultant, Mitchell
From slip and falls to
arson and murder for
life insurance policies,
there is no end to the
creativity of fraudsters
who cost American
consumers upwards
of $80 billion dollars
per year.
19
The more data that
an organization can
glean actionable
insight from, the
more room there
is for making
improvements.
It’s safe to say that data analytics
are transforming every industry.
The more data that an organization
can glean actionable insight
from, the more room there is for
making improvements. Such is
the case with insurance. With
Ancillary Services: A Key to Cutting Costs?
From PropertyCasualty360.com
Publish Date: February 13, 2015
By Erika JamesVice President, Client Services, Mitchell Workers’ Compensation Solutions
massive amounts of data collected
on a daily basis, the business
opportunities that are available
after sorting and analyzing that
data are even greater. It’s a practice
that many carriers are adopting
for a variety of benefits, but most
notably, to drive down costs.
Read More
Current Events
20
Wouldn’t it be nice if you never had
to buy insurance until after you had
a claim? Think of the money you
could save not having to purchase
auto insurance until your teenager
crashed the car. What about the
cash you could bank if you didn’t
have to pay those astronomical
Florida homeowner’s premiums
until a hurricane rendered your
home uninhabitable? But let’s
face it, that’s neither the intent
nor purpose of insurance, which
provides coverage for certain risks
for which a policyholder pays a
premium for risk minimization
or mitigation. But what happens
when emotions get in the way
of the law?
Read More
Emotions Shouldn’t Put Coverage Decisions at Risk
From PropertyCasualty360.com
Publish Date: May 28, 2015
By Christopher Tidball Senior Director, Casualty Solutions Consultant, Mitchell
What about the cash
you could bank if you
didn’t have to pay
those astronomical
Florida homeowner’s
premiums until a
hurricane rendered
your home
uninhabitable?
Current Events
21 Current Events
22 About Mitchell
Mitchell San Diego Headquarters 6220 Greenwich Dr. San Diego, CA 92122
Mitchell empowers clients to
achieve measurably better
outcomes. Providing unparalleled
breadth of technology,
connectivity and information
solutions to the Property &
Casualty claims and Collision
Repair industries, Mitchell
is uniquely able to simplify
and accelerate the claims
management and collision
repair processes.
As a leading provider of Property
& Casualty claims technology
solutions, Mitchell processes
over 50 million transactions
annually for over 300 insurance
companies/claims payers and over
30,000 collision repair facilities
throughout North America.
Founded in 1946, Mitchell is
headquartered in San Diego,
California, and has approximately
2,000 employees. The company is
privately owned primarily by KKR,
a leading global investment firm.
For more information on Mitchell,
visit www.mitchell.com.
23 Mitchell in the News
Mitchell in the News
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For More Mitchell News:Press Releases
Effective CRM Can Pay DividendsMitchell’s Jim O’Leary discusses other tools that enable businesses to run smoothly and deliver a better customer experience. Read More
WIN 2015 Educational Conference “Connect to Cultivate” Celebrates Women in the IndustryWomen from all over the country gathered in Washington DC for WIN’s 2015 Educational Conference including a session led by Mitchell’s Marianne Godwin and Mary Yama. Read More
Can’t Touch ThisMitchell’s Sunil Nayak discusses the effect of evolving vehicle technologies on accident avoidance and claims workflow. Read More
Parts Procurement’s New EraJim O’Leary dicusses how technology becomes more pervasive in shops,and how repairers are working to find parts solutions that meet their high-paced needs. Read More
Mitchell RepairCenter Expands Link with PPG Automotive Refinish PaintManager SoftwareMitchell announces implementation of two-way interface of RepairCenter solution and PAINTMANAGER software color formula retrieval system. Read More
Industry Trends
ReportThe Industry Trends Report is a quarterly snapshot of the auto physical damage collision and casualty industries. Just inside—the economy, industry highlights, plus illuminating statistics and measures, and more. Stay informed on ongoing and emerging trends impacting the industry, and you, with the Industry Trends Report!
Questions or comments about the Industry Trends Report may be directed to:
Sandra Piccillo Senior Marketing Manager, Mitchell [email protected]
The Industry Trends Report is published by Mitchell.
The information contained in this publication was obtained from sources deemed reliable. However, Mitchell cannot guarantee the accuracy or completeness of the information provided.
Mitchell and the Mitchell logo and all associated logos and designs are registered and unregistered trademarks of Mitchell International, Inc. All other trademarks, service marks and copyrights are the property of their respective owners.
Volume Four Number ThreeQ3 2015Published by Mitchell
©2015 Mitchell All Rights Reserved.
