As previously reported in our April 2000 issue of the Beacon, the cost of medical treatment in the United States continues to increase. As part of our ongoing effort to develop loss prevention initiatives and be "part of the Member's team", we have given much consideration to ways in which Skuld can assist Members to reduce medical expenses in cases where a crewmember is ill or injured in the United States. These savings will clearly be a benefit to all.
Our experience shows there are too many cases where local agents arrange for an ill or injured crewmember to receive medical treatment but no steps are taken to contain the costs of such treatment. Agents are not qualified nor do they have the manpower to supervise the medical treatment and, as a result, owners are, in many cases, being overcharged for medical treatment rendered or unnecessary procedures are being performed. This conduct has occurred not only in U.S. hospitals but also in medical clinics, located close to the port, which routinely arrange for medical treatment for ill or injured crewmembers.
Medical auditing
We previously advised that medical auditing is a process whereby a medical provider's bill is analysed by a professional auditor who is trained to evaluate medical bills and ensure that they contain appropriate charges for services rendered. The auditing process can be performed in all 50 States and our experience over the last year has demonstrated substantial reductions in medical costs. By way of illustration, Anchor were involved in 8 cases last year, where medical auditing occurred. The original invoices amounted to approximately USD 406,000. After the invoices had been audited, reductions of almost USD 130,000 were achieved. The auditors' fees amounted to just over USD 35,000, resulting in a net saving to Members and Skuld of around 23%.
This process works on a no cure/no pay basis. No fee is paid to the medical auditor if no savings are achieved. Medical auditing firms earn as their fee a percentage of the reduction achieved. This is standard practice within the industry and is not controversial with the medical providers. In a high percentage of cases, auditing results in real savings to our Members.
After due consideration, and pursuant to Rule 29.1.2, we wish to direct Members to utilise the services of Anchor Marine Claims Services, Skuld's exclusive correspondent in North America, to assist in reviewing medical bills. Anchor will approve (unless a Member has its own preference) and supervise medical auditing companies and will assist Members and Skuld in processing medical bills for payment. Anchor will not charge for these services.
We realise that some Members may have utilised the services of legal correspondents in the United States to assist in reducing medical bills. Our experience shows that this is not a cost-effective procedure. The use of Anchor's free audit assistance service will reduce costs for Members and Skuld.
This cost-saving measure only works if the audit is performed before the medical bills are paid. If the bills are paid by the Member or its local agent before Anchor is notified, the opportunity to achieve savings is lost.
Effective immediately
- audits should be performed, and medical bills sent to Anchor, for all new and existing claims relating to medical treatment received in connection with ill or injured crewmembers in the United States. Accordingly, Members should immediately instruct their local agents to forward to Anchor all medical bills. Anchor will assist in arranging for the medical audit and, upon completion, notify Skuld and the Member of the savings achieved. Only after the audit is complete, should the medical bills be paid.
Medical case management
Members can also take action to contain medical costs even before the bills are received. Early notification and intervention is the key to cost containment.
We recommend Members consider utilising medical case managers in all cases where a crewmember is seriously injured, is hospitalised or undergoes a medical procedure requiring continued medical treatment. Medical case managers are trained nurses who work with us to gather information about the medical condition of the ill or injured crewmember as well as plan, co-ordinate and monitor the treatment of the crewmember. This serves to ensure that the crewmember is receiving appropriate and cost-effective treatment until medical stability or total medical recovery is achieved. We strongly support the use of medical case managers because we know of too many cases where the proposed treatment is not necessary at all or could be performed outside the United States, following the crewmember's repatriation.
Medical case management can assist in significantly reducing medical costs. Our experience shows that case managers can, in many instances, negotiate discounted rates with medical providers prior to and after treatment.
Anchor has experience dealing with various nurses/medical case managers around the United States and can assist Members in coordinating this effort. As this is more time consuming for Anchor than their involvement in medical auditing and requires more active input and follow-up from one of their claims handlers, charges for this service will fall within the structure described in Skuld's May 2000 Circular regarding Anchor's rates. The rate of USD 100.00 per hour will be debited directly to the Members' statistics in accordance with standard procedures. The medical case manager will also charge a fee for services rendered, but our experience shows that this is money well spent in view of the savings achieved.
Effective immediately
- Members should immediately notify Skuld in all new and existing cases where crewmembers are seriously injured, hospitalised in the United States or are in need of any kind of medical procedure requiring continued treatment in the United States. Upon notification, Skuld will then assist Members in containing costs and in deciding whether medical case management is appropriate.
Yours faithfully
Skuld