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Keith Peterson, Mitchell International, and Chris Tidball, Mitchell Auto Casualty Solutions
Keith Peterson, Mitchell International, and Chris Tidball, Mitchell Auto Casualty Solutions
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How Insurers Can Use Analytics To Curb Opioid-Related Claims Fraud

One of the biggest opportunities for insurers to overcome the challenges of opioid-related claims fraud is the leveraging of both existing medical bill data and predictive analytics.

Casualty insurers today are presented with a wealth of opportunities to use data and analytical technologies to improve claim outcomes. In particular, predictive analytics are increasingly used early in the claim lifecycle for pinpointing at-risk claimants based on provider and treatment choices. This article reviews the potential for scoring algorithms based on large scale outcomes research to help mitigate one of the most costly healthcare crises impacting insurers -- the epidemic of pain medication abuse.

We have heard the terms before; pill mills, oxy, perc, and other such slang for opioid drugs and their distributors. Each year, opioids kill more people than cocaine and heroin combined, according to the Pew Health Group. In fact, nearly three out of four drug overdoses are caused by prescription pain killers, also called opioid pain relievers. The bottom line for insurers is that the epidemic is getting worse to the tune of billions of dollars annually being spent in a highly lucrative opioid market.

One of the biggest opportunities for insurers to overcome these current challenges is the leveraging of both existing medical bill data and predictive analytics. Companies such as Mitchell International have developed databases and scoring algorithms to enable customers to better manage prescription claims with tools that predict the likely risk of opioid drug abuse developing over the course of a claim. These tools enable better interventions that both reduce costs and save lives. By implementing scoring across claims management and medical management systems, claims can be targeted effectively as early as the First Report of Injury. And, as the claim develops, more powerful diagnosis and treatment indicators help improve those predictions, creating a dynamic view of which claimants may need more assistance to achieve the fastest return to health and work.

[5 Keys To Countering Claims Fraud]

Progressive Medical, a PBM company, reports that their early pharmacy statistical model intervention program has resulted in a 26% reduction in prescription costs per claim for their clients. This is critical when considering that the average annual drug cost per patient for abusers is 4.5 times that of non-abusers ($3918.00 versus $877.00), according to the American Journal of Pharmacy Benefits. Even more astonishing is the total average per-patient healthcare payer cost for opioid abusers of $24,193, or 6.6 times higher than the $3,467 paid out for non-abusers.

By deploying standard scores across claims, bill review, and First Notice of Loss (FNOL) applications, carriers gain the ability to access real-time indicators and calculate severity scores on both workers' comp and auto no-fault claims. This new capability enables adjusters and case managers to monitor utilization while proactively identifying situations of potential addiction, abuse or misuse.

A claims-based opioid monitoring program involves five components:

  • Assessment of the prevalence and incidence of potential opioid abuse within the insured population.
  • Development of method to score claims in a dynamic fashion.
  • Implementation of a workflow to apply the most appropriate action to the claim given the current phase of the claim and assessed risk.
  • Monitoring of providers to understand where risk is greatest.
  • Measurement of cost and health outcomes including prescription costs, emergency room visits, readmissions, lost work time and claimant satisfaction.

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