Benefits of Using a Bill Review Service Julie Nauman, Executive Officer

1. Benefits of Using a Bill Review ServiceJulie Nauman, Executive Officer California Victim Compensation Program

2. California Compensation Program Fiscal Year 2011/2012 Applications received: 53,373 Bills Received: 192, 462 Bill Line Items:  570,447 Payments Made: $70,422,450

3. Bill Review Service • Since 1992, CalVCP has contracted with Medical Data Exchange or MDX • Significant savings through: • Fee schedule • Eliminating charges for services billed that are non incident-related or consistent with the injuries

4. Medical Fee Schedule Prior to CalVCP medical fee schedule • Medical expenses were paid at 100% of billed amount • Accounted for 40% of CalVCP costs • Payers typically use some form of fee schedule. • Unusual for a payer to simply pay all medical bills in full as CalVCP did previously

5. Establishing Bill Review Service • Staff previously negotiated with hospitals regarding expenses exceeding $10K • Provided approx. $400,000 savings per $1.6 million submitted • Even still, savings represented only a small percentage of medical bills

6. Fee Schedule • Depending on solvency, CalVCP used variations of the Medicare Fee schedule to include plus and/or minus 20% • Current Board approved rate is a flat Medicare rate of payment

7. Why Use BRS? • Cost effective • Technical expertise is needed for complicated rule-based system • Requires updates to tables and interfaces with licensing boards • Allows quick turnaround for changes • Contractor prepared to make rate & payment adjustments to support program

8. Costs vs. Benefits • BRS Costs approximately $550,000 annually • BRS Provides Significant Savings • $1.8 million average annual dollar savings for the contracted service vs. in-house processing of bills • Over $337 million in expenses submitted to MDX in FY 11/12; $80 million paid • Net cost savings of nearly $257 million;76% reduction in bill amount!

9. Thank You - CalVCP Public Affairs