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Comprehensive program reform saves $1 billion in California

Situation

  • California had the highest workers' compensation premiums for employers in the United States. A major reason: the time and cost to resolve disputed medical claims for injured workers.
  • Under the state's complex judicial process, decisions on claims could take months.
  • Too often, the result was undesirable health outcomes, such as the inappropriate dispensing of opioids.

Challenge

Close gaps in program efficiency by creating a more streamlined, cost-effective, and reliable method of claims resolution.

Solution

As part of California's efforts to control employers' workers' comp premiums, we transformed the state's program by implementing an Independent Medical Review (IMR) process.

Instead of having opposing medical experts present testimony to non-clinical judges, our process utilizes independent healthcare professionals to resolve disputes about the necessity of treatment.

Screened to avoid any conflicts of interest, these expert reviewers - including doctors, nurses, and other clinicians - provide efficient, objective recommendations, expediting the appeals process and greatly reducing costs.

How we did it

The Maximus® IMR solution showcases our digital transformation capabilities, including the use of data analytics, robotic process automation, and machine learning to streamline processes using business rules. These rules guide the reviewers, ensuring decisions are based on the best peer-reviewed and epidemiological evidence.

Scale has been essential in meeting California's needs. We've handled case numbers that have far exceeded initial estimates and our IMR document collection portal has processed more than one million pieces of information.

By rethinking processes from top to bottom, we've enabled the state to close a significant budget gap and achieve better outcomes, too.

Results

$1 billion
in annual savings

10 days vs. 231 days
to resolve claims

15,000 monthly cases
up from estimated 2,000–4,000

70% decrease
in opioid prescription drug costs

42% decrease
in advisory pure premium rates

Overcoming addiction in healthcare

While our workers’ compensation efforts have helped limit substance abuse among injured workers, our voluntary Addiction Diversion Program has done the same for many healthcare workers in California.

In collaboration with professional licensing boards, we provide counseling, treatment, monitoring, and multi-year case management to turn near certainty of relapse (75% within 5 years) into success (87% maintain sobriety past 5 years).