Tag Archives: injured workers

Doctors Can Drive Claim Costs – A Case Study

In response to our recently published article, http://medmetrics.blogspot.com/2012_03_01_archive.html”>Survey: Employers Want WC Cost Control. Really? a reader commented:

“The biggest problem I have is finding the right doctors. If all of my employees were in one location, this would be a piece of cake, but we are a trucking company with drivers who live and work all over the U.S.”

She continued, “I just had a conversation with a doctor’s office this morning about a claimant at the other side of the country. This employee, the claimant, has been off work 6 weeks with a knee injury. X-rays and MRI show nothing acute, the ligaments and cartilage are fine, but the claimant still reports pain. The doctor admits he has no explanation for claimant’s pain complaints. However, instead of releasing claimant back to work or declaring MMI (Maximum Medical Improvement), the doctor referred him to a specialist.”

Nice Guy, But …
The frustration experienced by this claim manager is palpable. Yet, the treating physician is probably not fraudulent or abusive of the Workers’ Comp system. He is probably unaware of the impact of his decision to refer. Moreover, he is probably also oblivious to the fact that the longer the patient is off work, the chances of returning decidedly decrease. The doctor is simply treating the patient as he would his neighbor. But that is not the best care from a Workers’ Comp viewpoint.

That Obvious
The obvious solution is to prevent such dilemmas by selecting only excellent treating providers who understand the Workers’ Comp system. But how can they be found? Most provider networks still contract with anyone and everyone, regardless of performance, thereby leaving employers like this one marooned. Yet that tradition is changing and changing fast.

The enlightened movement in the industry quickly gaining traction is outcome-based networks. Many are structured as carve-outs of existing networks suited to individual locations and needs.

Analysis of individual performance as evidenced in data indicators can be based on industry research. Among the indicators are frequency and duration of medical treatment, return to work rates, indemnity costs, litigation, direct medical costs, and many other factors specific to Workers’ Comp. Comparative provider performance must be state-specific and quality of care is considered.

Medical Quality

Medical quality in Workers’ Compensation is as important as it is in general health. Injured Workers deserve the best medical care available. However, in Workers’ Comp there is another layer of quality measurement superimposed on what is considered in general health. In general health quality is measured in terms of accepted treatment patterns followed and return to health. However, in Workers’ Comp, measures of administrative factors, such as return to work, are quality indicators integrated into provider performance evaluation.

Monitoring To Maintain Excellence
Once best-in-class providers are selected in a region, continued monitoring is important, lest their performance slide. Moreover, letting them know they are being monitored, comparing them to other providers like them in their state, can be an extremely effective means of managing provider performance.

What To Do
Industry enlightenment will drive the solution. People now realize they need better information about which doctors to choose, information based on objective data, not vast lists of doctors’ names and locations. Moreover, you help make that happen — now.

Great Expectations

The overwhelming passage of Senate Bill 863 (De La Torre) in the waning moments of the end of the California legislative session set the workers’ compensation community abuzz with the thoughts that this major overhaul will reduce insurance rates, put more money into the pockets of injured workers, and make the system work more efficiently and effectively for labor and employers.

While it should be noted that workers’ compensation reform always has these goals in mind, the breadth of the changes in this legislation, addressing key issues that have been on the forefront of commentary for several years, should be roundly commended. There were clearly defined problems in the system that this legislation addresses head on. For that, the proponents, and the Governor and legislative leadership, deserve much credit.

The response to these changes from the Workers’ Compensation Insurance Rating Bureau (WCIRB), regarded as tepid by many commentators, should be looked at in the context of what the Bureau can and cannot do when evaluating legislation — especially on legislation that hasn’t even become effective.

Benefit increases are called “hard dollar” costs. Their impact can be reasonably and immediately calculated and added to the mix when determining the pure premium rates for the coming year. Similarly, several of the changes to workers’ compensation medical fee schedules can be priced with reasonable certainty. Schedules for interpreters and for copying services, however, cannot be priced prospectively because there is no reference point upon which to base savings or cost increases that may arise from how these fee schedules are developed.

Three major reforms: changes to permanent disability, creation of independent medical review (IMR), and the many changes in the area of liens have each had a degree of cost savings assigned to them as well. When all elements in this bill are combined, the cost of the $700M plus in benefit increases is offset by system improvements.

All in all, this is set up to be a bill that should benefit employers, insurers, and workers. The fact that not every change that could result in savings has been assigned savings today underscores the difficulty in evaluating reforms that are dependent on regulatory implementation or upon everyone in the system affected by the reforms behaving as expected by those who advanced the reforms.

Recent history shows us that expectations run high upon enactment of reform legislation and usually are diminished if not dashed within three years thereafter. Whether that will be the case this time remains to be seen. This is in no way a criticism of the bill that Governor Brown signed. It is, however, a cautionary note that there is more than one of these reforms that will be shaped by the courts. For each opportunity for savings and creating efficiency in SB 863 there is also a trap that litigation may or may not spring open. No one involved with the last major reforms would have expected Almaraz/Guzman or Ogilvie. While litigation is inevitable when major reforms occur, it can also be fairly said that SB 863 invites it in several key areas.

All of us in the system are tasked to make our best efforts to assure the original bargain between labor and employers is protected. SB 863 is the latest iteration of that effort. As it becomes operative, and the various regulatory agencies adopt necessary rules to implement its provisions, and as disputes arise that the Courts are asked to resolve, let us all remember that reforms, and the expectations they generate, require constant scrutiny and protection. Without it, we’ll be back in Sacramento sooner than expected.