Exploring Workers’ Compensation and Motor Vehicle Accidents as Lucrative Lines of Business for Physician Practices

Episode 93: Exploring Workers’ Compensation and Motor Vehicle Accidents as Lucrative Lines of Business for Physician Practices

Hello, and welcome to another episode of Medical Money Matters, where we dive deep into the financial and operational aspects of running a successful medical practice. Today, we’re going to explore a topic that’s both financially lucrative and operationally challenging for physician practices: Workers’ Compensation and Motor Vehicle Accidents, or MVA, as lines of business.

Now, if you’re a physician or an administrator managing a medical practice, you know that these two areas can represent significant revenue opportunities. But they also come with their own set of challenges – more paperwork, working with adjusters from various insurance companies, and longer collection times, to name just a few.

In this episode, we’re going to break down these challenges and discuss strategies to optimize your practice’s financial performance when handling Workers’ Compensation and MVA cases. We’ll also compare these lines of business with traditional fee-for-service arrangements and explore how you can leverage them to maximize your practice’s revenue. So, whether you’re currently accepting Workers’ Compensation and MVA cases or considering it, stay tuned. We’ve got a lot to cover. Let’s start by discussing what makes Workers’ Compensation and Motor Vehicle Accident cases different from the typical fee-for-service business. On the surface, these cases might seem like just another patient visit, but the underlying processes and financial implications are vastly different.

Understanding the Challenges: Paperwork and Working with Adjusters
One of the most significant differences—and often the most daunting—is the amount of paperwork involved. In a traditional fee-for-service model, the process is fairly straightforward. A patient visits your practice, receives care, and your billing department submits a claim to the insurance company. Depending on your contracts and coding accuracy, you’ll receive payment, usually with some discount off your billed charges, within a few weeks.

But with Workers’ Compensation and MVA cases, the process is more complex. These cases require additional documentation to justify the medical necessity of the services provided. This means more detailed notes, specific forms, and often, repetitive communication with insurance adjusters who are scrutinizing every aspect of the claim.

Now, why is this extra documentation necessary? For one, Workers’ Compensation and MVA cases often involve third-party payers who are not just paying for medical care but also assessing liability and determining the extent of injuries related to a workplace or vehicle accident. The goal for these payers is to ensure that the medical treatment being provided is directly related to the injury sustained in the incident, and nothing more.

This brings us to the second challenge: working with adjusters. Unlike typical health insurance claims where your billing team interacts primarily with the insurance company’s claims department, Workers’ Compensation and MVA cases often require direct communication with insurance adjusters. These adjusters are tasked with minimizing the insurance company’s payouts, so they may request additional information, question the necessity of certain treatments, or even deny claims altogether.

This back-and-forth can be time-consuming and frustrating. However, it’s crucial to maintain a good working relationship with these adjusters. Clear, timely communication and thorough documentation can go a long way in smoothing out the process. Some practices even designate specific staff members to handle Workers’ Compensation and MVA cases, ensuring that these complex claims are managed by individuals who understand the intricacies involved.

The Time Factor: Delays in Payment and the Importance of Strategic Claims Submission
Another critical aspect to consider is the length of time it takes to collect on Workers’ Compensation and MVA claims. Unlike traditional fee-for-service models, where payments are often received within 20 to 45 days, Workers’ Compensation and MVA claims can take significantly longer—sometimes 90 days or more. This delay is largely due to the additional review and approval processes involved.

One of the reasons for this extended timeline is that, in many cases, Workers’ Compensation and MVA claims involve multiple parties – patients, employers, insurance companies, and sometimes even attorneys. Each of these parties may have their own review process, which can contribute to delays in payment.

This is where timing your claims submission becomes critical, especially when dealing with Personal Injury Protection, or PIP, insurance. PIP is a type of auto insurance coverage that covers medical expenses and, in some cases, lost wages for individuals injured in motor vehicle accidents, regardless of who was at fault.

In many states, there are specific timeframes within which PIP claims must be filed – often within 14 days of the accident. Failing to submit claims within this window can result in denial of payment. Therefore, it’s essential to have a streamlined process in place for quickly gathering the necessary documentation and submitting PIP claims as soon as possible after an accident, especially if it took the patient a few days to get in for their appointment.

But beyond just meeting deadlines, timing your claims submission strategically can also impact your practice’s cash flow. For example, submitting claims in batches rather than individually can help manage the administrative burden and reduce the time spent on follow-ups with adjusters. Additionally, prioritizing claims based on their likelihood of quick payment can help ensure that your practice maintains a steady cash flow while waiting on slower-to-pay Workers’ Compensation and MVA claims.

Financial Performance: The Upside of Workers’ Compensation and MVA Cases
Despite the challenges, there’s a significant upside to handling Workers’ Compensation and MVA cases, and that’s the financial performance. One of the most appealing aspects of these lines of business is that, in many cases, they pay 100% of billed charges.

Unlike traditional fee-for-service models, where contracted rates with insurance companies often mean accepting payments at 80% or even 50% of your billed charges, Workers’ Compensation and MVA cases typically do not involve such steep discounts. This means that for the services you provide, you’re often paid in full – assuming, of course, that your documentation and coding are accurate.

For instance, if your practice typically bills $200 for a certain procedure, and your contracted rate with a traditional health insurer is $150, you’re automatically taking a 25% reduction. But with Workers’ Compensation or MVA cases, that same $200 procedure is likely to be paid in full, or very close to it.

This can have a significant impact on your practice’s revenue, particularly if you’re seeing a high volume of Workers’ Compensation and MVA cases. Over time, the increased revenue from these cases can more than offset the additional administrative burden – especially if you have efficient processes in place to handle the paperwork and communication with adjusters.

However, it’s important to note that not all Workers’ Compensation and MVA claims are created equal. The reimbursement rates and payment timelines can vary significantly depending on the state you’re in, the insurance companies you’re dealing with, and the specifics of each case. Therefore, it’s crucial to have a solid understanding of the regulations and requirements in your state, as well as to build strong relationships with the adjusters and insurers you work with regularly.

Comparing to Traditional Fee-for-Service Business
Let’s take a moment to compare Workers’ Compensation and MVA cases with traditional fee-for-service business models.

The traditional fee-for-service model is what most practices are familiar with. It’s predictable, the payment timelines are shorter, and the processes are well-established. You bill for the services provided, and depending on your contracts with insurers, you get paid – albeit often at a discounted rate.

However, as we’ve discussed, this model has its drawbacks, particularly in terms of the discounts applied to your billed charges. Over time, these discounts can add up, significantly reducing your practice’s revenue potential.

On the other hand, while Workers’ Compensation and MVA cases involve more complexity – longer payment timelines, additional paperwork, and the need to work closely with adjusters – they also offer the potential for full reimbursement of billed charges. For practices that have the capacity to manage these complexities, the financial benefits can be substantial.

Moreover, expanding into these lines of business can help diversify your practice’s revenue streams. This can be particularly advantageous in times of economic uncertainty or when changes in insurance regulations impact your traditional fee-for-service business.

Optimizing Your Practice for Workers’ Compensation and MVA Cases
So, how can you optimize your practice to effectively manage Workers’ Compensation and MVA cases? Here are a few strategies:

• Invest in Staff Training: Ensure that your billing and administrative staff are well-versed in the specific requirements of Workers’ Compensation and MVA cases. This includes understanding the documentation needed, the process for working with adjusters, and the timelines for submitting claims. It’s imperative that your front office staff is trained to ask each patient if their visit is related to a workplace or motor vehicle injury so that you identify these upfront.
• Streamline Documentation Processes: Develop standardized templates and checklists for documenting Workers’ Compensation and MVA cases. This can help ensure that all necessary information is captured during patient visits, reducing the need for follow-up documentation later.
• Build Relationships with Adjusters: Establishing good relationships with insurance adjusters can make the claims process smoother and more efficient. This might involve regular communication, providing clear and detailed documentation, and being responsive to their requests.
• Monitor Payment Timelines: Keep track of the payment timelines for Workers’ Compensation and MVA claims. If you notice that certain insurers consistently delay payments, consider adjusting your billing practices or following up more aggressively to ensure timely payment.
• Leverage Technology: Utilize practice management software that is specifically designed to handle the complexities of Workers’ Compensation and MVA cases. This can help automate parts of the process, reduce errors, and improve overall efficiency.
• Evaluate Financial Performance Regularly: Regularly assess the financial performance of your Workers’ Compensation and MVA cases. Compare the revenue from these cases to your traditional fee-for-service business to ensure that the additional administrative burden is worth the financial gain.

As we wrap up today’s episode, it’s clear that Workers’ Compensation and Motor Vehicle Accidents represent both a challenge and an opportunity for physician practices. While these cases come with increased administrative burdens and longer payment timelines, they also offer the potential for higher reimbursements, often at 100% of billed charges.

For practices willing to invest in the necessary processes and training, these lines of business can be a significant source of revenue, helping to offset the discounts and other limitations of traditional fee-for-service models. The key is to approach them strategically, with a focus on efficiency, accuracy, and relationship-building with adjusters and insurers.

Thank you for joining me today on Medical Money Matters. I hope you found this discussion on Workers’ Compensation and MVA cases insightful. If you have any questions or would like to learn more about how to optimize your practice’s financial performance, feel free to reach out or visit our website at healtheps.com. Don’t forget to subscribe to the podcast for more episodes where we tackle the financial side of healthcare, and please share with your colleagues.

Until next time, keep thriving in your practice, and remember that smart financial management is the backbone of successful patient care.