Paradigm Releases Study on Proprietary Surgical Implant Cost Management Solution

WorkCompWire.com

In a recent analysis conducted by Boston Strategic Partners, Paradigm’s surgical implant cost management platform, Fusion by Paradigm^SM, was found to reduce implant costs by 25 percentage points more than typical industry outcomes.

For injured workers requiring major surgeries, including orthopedic and spinal procedures, implants are a notorious source of exorbitant costs for workers’ compensation claims. This is largely driven by a lack of cost transparency that causes rounds of negotiation and eventual overpayment by insurers. These factors often lead to payers reimbursing up to two times more than the cost the provider paid.

To mitigate this major pain point, Paradigm Specialty Networks engineered a surgical implant cost management system that uses real-world pricing data to keep costs transparent. While the standard approach is to negotiate implant costs down after a standard bill process, this often relies heavily on the subjective experience of negotiators and occurs at the charge level. In contrast, Paradigm’s proprietary platform, Fusion, is data-driven and takes a “bottom-up,” cost-based approach to determining implant pricing that draws on over a decade of charge data points totaling $1.3 billion.

Global health care economics and analytics firm Boston Strategic Partners conducted an in-depth quantitative analysis of industry practices sourced from 137 million lines of claim data. As a result of this study, Fusion by Paradigm was shown to outperform other implant cost reduction solutions by a significant margin.

“Within the workers’ compensation industry, Paradigm Specialty Networks stands alone in our scientific, data-driven approach to surgical implant cost containment,” said Ken Hannigan, Chief Executive Officer of Paradigm Specialty Networks. “Now, we’re thrilled that BSP’s independently conducted study has verified this.”

What this industry-spanning study found

BSP performed a forensic investigation of Fusion by Paradigm’s four-phase adjudication process and compared it to the workers’ compensation industry at large to determine how it performs against industry outcomes. What they found is that Fusion’s unique methodology and solid, data-driven foundation was able to generate significant cost savings for clients that are superior to industry averages.

“Our study aimed to compare the effectiveness of Paradigm’s forensic analysis to the industry standard negotiation-based approach. It’s clear, based on our quantitative analysis, that Fusion by Paradigm is a superior approach that generates significant cost reductions for workers’ compensation payers when compared to typical industry results,” said Fabian D’Souza, MD, President and Founder of BPS.

When comparing these savings to typical industry outcomes, BSP’s analysis found the following:

• An implant cost reduction of 25 percentage point greater than industry averages
• 18 percentage points greater reductions across all spinal procedures
• Cervical fusion procedures were reduced by nearly 22 percentage points more than typical industry outcomes
• The Fusion platform also reduced costs across states with especially high surgical volumes

“The results of this study are truly compelling,” said Bill Elliott, Chief Administrative Officer, Paradigm Specialty Networks. “The independent, credible validation of our data from BSP affirms what we have always known—Paradigm’s success has resulted in hundreds of millions of dollars in reduction of implant charges over the past 10 years. We have taken excess costs and charges out of the health care system expense, and continue to be the industry leader in surgical implant cost containment.”

Fusion by Paradigm uses a rigorous four-phase process to lower costs

Surgeries in workers’ compensation cases can cover a wide spectrum of procedures. From a seemingly inexpensive hernia mesh procedure to a highly complex and costly spinal procedure, the Fusion platform is carefully designed to deliver savings across every implant-related cost category. The BSP study determined that by using a four-step adjudication workflow, Paradigm can fully assess the true cost of surgical implants related to a specific case. Every surgical implant review goes through the following phases:

• Forensic assessment. The goal of this first phase is to isolate implant line items in a submitted claim. Paradigm’s experts are carefully trained and experienced in identifying any “creative” and unnecessary billing practices.
• Cost verification. Next, Paradigm Specialty Networks compares the cost of the implants against the Fusion database. This system is built on more than 10 years of data and hundreds of thousands of discrete line items to provide full pricing transparency for surgical implants.
• Objective allowances. Using the true pricing data that has been discovered, a more accurate reimbursement allowance can now be calculated that is fully in line with state guidelines. This step has also been developed to significantly reduce many of the pain points in typical claim- reconsideration loops and shorten the turnaround time for payers and providers.
• Daily data update. The Fusion database was built to continuously integrate and reflect new cost data from each case it handles. This helps to eliminate the problem of out-of-date cost information that affects so many third party administrators with much slower update cycles.

“We rebuild every implant surgery, from the ground up, based on thousands of data points we’ve collected over a decade,” said Gus Tschaar, Chief Bill Review Officer, Paradigm Specialty Networks,  about Paradigm’s rigorous methodologies. “The result is a reimbursement value that is verifiable and defensible.”

The BSP study concluded that, “Fusion by Paradigm is a data-driven solution that adjudicates implant claims by determining the implant’s true cost, powered by a best-in-class proprietary pricing database.” Based on this analysis, any organization looking to reduce workers’ compensation payments for surgeries requiring implants can find the highest cost savings across the industry through Paradigm Specialty Networks’ powerful and defensible approach to implant cost containment.

Download the Fusion by Paradigm white paper here.  To learn more, please visit Paradigm Specialty Networks.

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