Vendor Saves City Almost $925,000 on Workers’ Compensation Medical Billings

Published : Tuesday, May 31, 2016 | 4:31 AM

A single vendor contracted by Pasadena’s Human Resources Department has managed to save the city close to $925,000 on medical billings for worker’s compensation claims during the 2016 fiscal year.

The vendor charged the city just $11,260.

Richard F. Kunz, Human Resources Manager for Employee Relations, Workers’ Compensation and Safety, reported the savings in a document released by the Interim City Manager’s office last Thursday. He was responding to queries from the City Council during its regular meeting on May 9.

Kunz said the savings were achieved as four internal City staff who provide professional management and oversight of the program worked with a third party administrator – Keenan and Associates – which has handled workers’ compensation claims since July 1, 2012.

The city’s contract with Keenan and Associates expires on June 30, 2016, after which a new administrator – Adminsure – takes over.

In addition to a third party administrator for the program, the Workers’ Compensation Division has also contracted a bill review service that looks at every bill received by a service provider. The service ensures that all invoices are not only necessary and appropriate but that the City also receives the lowest medical costs possible for the services provided.

The bill review service is currently being provided by Lien on Me, which in fiscal year 2016 has so far reviewed 890 bills has saved the City up to $924,721 in billed costs. The amount is 76 percent of total provider charges – out of $1,210,880 total provider charges submitted to the city, the city only paid $286,159 after Lien on Me reviewed the bills.

The city paid Lien on Me just $11,260 for bill review services for the current fiscal year.

The third vendor that’s helping reduce costs for the human resources department is a Nurse Case Management company, ISYS Solutions Inc., that supervises and manages medical services as needed when the city believes cases are not receiving sufficient attention by service providers.

ISYS is paid as a provider through individual claims.

Kunz also reported on the city’s Return to Work Program, where city employees with temporary work restrictions – either illness or injury – are assigned to modified or alternative work assignments, instead of not working at all and collecting temporary disability benefits.

Through the program, the city’s temporary disability costs are reduced and employees continue to be engaged in productive work as they recover from their illness or injury.

Sixty-nine employees have served in modified assignments so far in fiscal year 2016, with an estimated 163 days of lost work time recovered.