While many Workers' Compensation programs focus almost exclusively on medical and indemnity costs, Kelly Services Inc. took it a step further in 2003 by discovering a substantial cost included in the allocated loss-adjustment expenses (ALAE) of its third-party administrator (TPA). A deeper dive into its ALAE revealed Kelly's medical-bill-review (MBR) fees provided a sizable cost-saving opportunity.
Mike Tilley, Kelly's vice president of Workers' Comp, engaged an independent consulting firm, David Donn Consulting Inc., which provides advisory services on bill-review cost containment. Working with David Donn, Kelly implemented a highly customized MBR model with its TPA. By the end of the one-year pilot using the new model, Kelly's average gross savings rate increased by 8 percent to just under 50 percent—while its bill-review fees declined by 4.2 percent—resulting in a gross financial improvement in excess of $2 million.
“Learning more about the not-always-transparent nuances of our managed-care program was like getting an MBA in this often-overlooked area of opportunity,” Kelly noted in its award submission.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Shawn Moynihan
Shawn Moynihan is Editor-in-Chief of National Underwriter Property & Casualty. A St. John’s University alum, Moynihan has earned 11 Jesse H. Neal Awards, the Pulitzers of the business press; seven Azbee Awards, from the American Society of Business Press Editors; two Folio Awards; and a SABEW award, from the Society of American Business Editors & Writers. Prior to joining ALM, he served as Managing Editor/Online Editor of journalism institution Editor & Publisher, the trade bible of the newspaper industry. Moynihan also has held editorial positions with AOL, Metro New York, and Newhouse Newspapers. He can be reached at [email protected].
