Performance-Based Oversight April 19, 2006

Overview What is PBO? House Bill 7 Key Regulatory Goals Assessments Tiers Incentives Timelines

What is PBO? Encourages and rewards excellence and continuous improvement Fosters improved and timely communications Establishes performance objectives, measures and expectations Focuses on results rather than prescriptive requirements

Who is using PBO? Department of Energy  US Nuclear Regulatory Commission  Blue Cross/Blue Shield Texas  ex.htm Texas Commission on Environmental Quality  y/index.html

House Bill 7 4 basic goals of the workers’ compensation system  Each employee shall be treated with dignity and respect when injured on the job  Each injured employee shall have access to a fair and accessible dispute resolution process  Each injured worker shall have access to prompt, high- quality medical care  Each injured employee shall receive services to facilitate the employee’s return to employment

House Bill 7 9 legislative goals  Promote safe and healthy workplaces through appropriate incentives, education, and other actions  Encourage the safe and timely return of injured employees to productive roles in the workplace  Provide appropriate income benefits and medical benefits in a manner that is timely and cost-effective  Provide timely, appropriate, and high-quality medical care supporting restoration of the injured employee’s physical condition and earning capacity

House Bill 7  Minimize the likelihood of disputes and resolve them promptly and fairly when identified  Promote compliance with this subtitle and rules adopted under this subtitle through performance-based incentives  Promptly detect and appropriately address acts or practices of noncompliance with this subtitle and rules adopted under this subtitle  Effectively educate and clearly inform each person who participates in the system as a claimant, employer, insurance carrier, health care provider or other participant of the person’s rights and responsibilities under the system and how to appropriately interact within the system

House Bill 7  Take maximum advantage of technological advances to provide the highest levels of service possible to system participants and to promote communication among system participants

House Bill 7 § Develop and use key regulatory goals to assess insurance carriers and health care providers At least biennially, assess the performance of insurance carriers and health care providers Based on the assessment, develop regulatory tiers

House Bill 7 The tiers should distinguish among:  Poor performers  Generally average performers  Consistently high performers Develop incentives within each regulatory tier that promote greater overall compliance and performance Focus regulatory oversight on those identified as poor performers

DWC PBO Activities Internal cross- agency team  Strategic Plan  Concept Paper Research of Performance-Based Oversight Presentation from Blue Cross/Blue Shield Interview of TCEQ management

Working Group Assistance Identify key regulatory goals Define assessment mechanism Define tiers and tier placement strategy Develop incentives for each tier

Key Regulatory Goals Used to assess the insurance carriers and heath care providers Must align with the general regulatory goals of the division

Key Regulatory Goals Examples Timeliness of Income Benefits Timeliness of Medical Bill Processing Minimizing Disputes Return-To-Work Outcomes Workplace Safety

Assessments Conducted at least biennially Conducted through analysis of data  Maintained by Division  Self-reported data Data Accuracy

Assessment Sources EDI data ECS/837 data Division data  Dispute resolution figures  Complaints  Form filings Data calls

Tiers Poor performers Generally average performers Consistently high performers

Tier Examples Quantifiable measures – 90%, 95%, etc  Defined measures  Can be conducted at any time for any time period Bell Curve  Performance relative to peers on same duty  Consistent time period Defined Distribution  Known number of entities

Incentives Developed by rule Defined for each tier Publicly recognize high performers Allow high performer designation as a marketing tool

Incentives Examples Reduced penalties Self Audits Payment modifiers Faster payments Waiver of conference fees

Proposed Timeframes Develop Key Regulatory Goals – 5/31/06 Identify Assessment Mechanism – 7/31/06 Develop Incentives – 7/31/06 Identify Tiers and Tier Placement Strategy – 7/31/06 Initiate Assessments – 8/31/06 Complete Initial Assessments – 9/30/06 Tier Placement – 10/15/06

Discussion Topics

Timeliness of Income Benefits Area to MeasureHow to MeasureData Used to Measure

Timeliness of Medical Bill Processing Area to MeasureHow to MeasureData Used to Measure

Minimize Disputes Area to MeasureHow to MeasureData Used to Measure

Return-To-Work Outcomes Area to MeasureHow to MeasureData Used to Measure

Workplace Safety Area to MeasureHow to MeasureData Used to Measure

Area to MeasureHow to MeasureData Used to Measure

Area to MeasureHow to MeasureData Used to Measure