Strategies to Control US Medical Costs: Medical Case Management and Bill Auditing

The cost of treating ill and injured crew members in the US far exceeds the expense of treatment in other regions of the world. This is because the US medical system has different regulations which allow the facilities and healthcare providers to provide services at varying costs throughout the country. To navigate the healthcare system and monitor cost of treatment, P&I Clubs often utilize medical case management companies to coordinate care and audit bills so Members can handle their next crew illness or injury claim in a more cost-effective manner. 

Employer Obligations  

Under international law and US general maritime law, all shipowners have a basic obligation to provide medical care on board ships and ashore to their crew members during illness and injury. This is a baseline obligation which crew contracts of employment and arbitration agreements expand upon, and which US law also expands upon for US crew members. For the purpose of this article, we are focusing on the baseline obligation to provide care. The efficient fulfillment of this obligation in the US is often challenging and can lead to unnecessary or excessive costs. 

Minor Injuries and Routine Recovery 

As a demonstrative example, consider the common scenario of a crew member who has cut and partially severed a finger, thus requiring treatment ashore. When a Member notifies its agents to coordinate the crew member’s disembarkation, the Club recommends that notice be sent to the Club as well. At that time, the Club can evaluate the information available and use its experience working in the region to determine whether the circumstances merit the appointment of a medical case manager. If so, we can coordinate with agents early on to involve a medical case manager best suited for the region of the incident. 

In this example, the Club would anticipate that after an emergency procedure to repair the finger, if recovery goes as planned, it should take a full day or two, at which time a doctor would approve the crew member’s fitness to fly. At this point, the Member would arrange for prompt repatriation of the crew member to their home country for them to complete the remaining treatment or therapy required for full recovery. In this instance, if the Club is notified of the incident early on, we would generally monitor the claim without the assistance of medical case managers to coordinate care because of the typical trajectory for this type of injury. With the Club’s advice, the Member can save on case management costs, which can be considerable. We would however advise that we engage medical case managers for the bill auditing services to achieve effective discounts early on in the process. Further information on the bill auditing will be addressed below.  

Complex Injuries or Additional Complications 

Now let’s consider an alternative scenario where the finger injury turned into an infection at the hospital which doctors advise is spreading, will likely lead to amputation of several fingers and has a high risk of other internal complications. At that point, the Club would appoint medical case managers to work with the hospital to coordinate treatment in a cost-effective manner and to monitor progress so that the Member may be informed about the fitness of the crew member throughout treatment. In this way, we ensure Members are meeting their obligation to provide care, while controlling the costs of the claim in real time.  

In anticipation of a clearance for fitness to fly, medical case managers also help facilitate prompt repatriation to avoid further costs associated with extended hospital and hotel stays in the US. For further information on the repatriation process, complexities and costs, please read Repatriating Sick and Injured Seafarers published in our previous edition of Navigating the Americas.  

Benefits for Early Medical Case Management Involvement  

In crew illness and injury claims for non-US owners and foreign crew members, early medical case manager involvement not only ensures employer fulfillment of healthcare obligations but can provide transparency in the treatment, prognoses, and cost of treatment. This enables an employer to plan for the prompt repatriation of the foreign crew member as early as possible following a fit-to-fly determination. Prompt repatriation further contains the claim costs and allows the crew member to continue treatment in a more comfortable setting in their home country, near their family. 

In crew illness and injury claims for US employers of US crew, where there is a heightened obligation to provide maintenance and cure until maximum medical improvement, appointed medical case managers can work directly with the crew member throughout the course of their curative treatment, further arrange convenient times for such treatment and procedures, and identify cost-effective locations within the crew member’s area that would be suitable options for care. With early case manager involvement, employers can ensure the prompt arrangement of medical treatment at reasonable expense. 

In summary, the key to efficiently controlling US healthcare costs is to promptly notify the Club of the injury along with Member’s agents information so that the Club can use its discernment at each stage of treatment to ensure medical case manager involvement only where necessary, and at the right stage of treatment and recovery. In notifying the Club first, instead of the Member or Member’s agents immediately appointing a medical case manager, the Member can avoid unnecessary case management fees, which can often exceed the audited bill cost for routine treatment of minor injuries.  

Bill Auditing  

Now that we have illustrated the importance of effective medical care management when a crew member is injured or ill, Members and the Club must also be cognizant of medical costs for the care that the crew member was given. This is particularly important in the US, given that it is by far the most expensive healthcare system in the world as such when a crewmember's P&I claim arises, it will generally be up to the Club and its Member to be diligent in negotiating with healthcare providers to secure discounted costs. 

Therefore, it is key that when a crew member seeks medical care, an audit is performed of the medical bills by a competent service with experience in the specific region. Fortunately, the Club has extensive experience with such auditing companies around the country and will be able to identify the appropriate company to undertake the audit. While the exact percentage savings will vary, savings can be significant, which will naturally be a benefit to the Member’s loss record. At the same time, having seen all of the major medical auditing companies around the country, the Club will be prepared to review the fees that these auditing companies charge to ensure that they are reasonable.  

Another point on medical bill audits is the procedure for conducting the audits. Often times, the medical case management company as referred to above will also be the company auditing the bills. As such, once the medical case manager is set up with a new file, as well as getting the requisite permissions and releases to access the crew member’s medical records and billing, the medical case manager should also be receiving bills and presenting the Member and the Club with their proposed audit. The proposed audit should contain the discounted costs for the care and also a bill for their services. If no medical case manager was initially involved, then the auditing firm will need access to the billing to conduct its audit and negotiate with the provider.  

Finally, a word about medical audit when there are claims by third parties. In these situations, the medical care has not been managed by the Member or the Club. Rather, the Member may see the medical costs show up in litigation either pre-suit if the opposing party is forthcoming or through discovery. However, what is presented by an opposing party must be carefully scrutinized to understand issues such as who paid the bills, how much was actually paid by the claimant vs. what was billed, and whether the costs paid were reasonable. In these situations, particularly if the matter is in litigation, a medical billing expert may be needed, which may be different from the auditing companies that are discussed above.  

Conclusion 

Our Members often have an obligation to pay for the medical costs of their crew members. Considering the staggering costs of healthcare in the US, it is imperative that the care and costs are appropriately managed. The Club’s US Bodily Injury team is experienced in managing these issues, and will do its best to assist the Member to achieve a fair and reasonable resolution.