Workers Compensation Managed Care By: Laura Deterding, ACAS, MAAA Midwest Employers Casualty Company

Ratemaking Implications of Managed Health Care on Workers Compensation: Components and their Ratemaking Implications

The goal of Workers Compensation Managed Care is to integrate cost containment with optimal treatment to facilitate expeditious re- entry into the workforce.

TPA/ Claims Adjuster Injured Employee Minimal cost to Employer Medical Providers Case Managers Workers Compensation Managed Care Employer Utilization Review Specialist Vocational Rehabilitation Specialist “Participants”

Workers Compensation Managed Care Third Party Administrator (TPA)/Claims Adjuster –Role: Investigate compensability of the claim. Identify and assign appropriate case managers and vocational rehabilitation specialists. Set objectives and measure the results. Secure IME/Second Opinions.

Workers Compensation Managed Care Third Party Administrator (TPA)/Claims Adjuster (Continued) –Role: (Continued) Evaluate vocational rehabilitation involvement and return to work possibilities. Settle the claim. –Goal: Proper claims handling is essential to cost containment and indemnity mitigation.

Workers Compensation Managed Care Case Management –Definition: Case management is necessary to insure that proper medical protocols are applied for a specified injury type. The case manager is a registered nurse with professionally recognized designations and experience with industrial disability cases.

Workers Compensation Managed Care Case Management (Continued) –Role: Develop treatment plans and communicate those plans to: –Treating Physician –Injured Employee –Employer –TPA/Claims Adjuster.

Workers Compensation Managed Care Case Management (Continued) –Role: (Continued) Steer injured workers to industrial physicians/PPO/HMO networks –Industrial physicians have an in-depth understanding of the industrial disability process and the employer’s needs. They serve as “gatekeepers” directing the initial treatment avenues Work with employer and vocational rehabilitation specialist regarding light duty and return to work possibilities.

Workers Compensation Managed Care Case Management (Continued) –Role (Continued) Attend medical staffings and provide input regarding appropriate treatment protocols. –Goal: Effective case management results in medical cost containment and reduced indemnity costs.

Workers Compensation Managed Care Medical Provider System –PPO PPO networks involve pre-negotiated discounts for the employer by use of selected providers. Networks may include: –Hospitals –Physicians –Prescription Services –Physical Therapy Centers –Other Medical Services Caution: There is a potential for utilization abuse. Should evaluate treatment frequency.

Workers Compensation Managed Care Medical Provider System (Continued) –HMO HMO providers are paid a flat fee for each covered employee. Providers involved in an HMO are employees of that organization. Caution: There is an incentive for the provider to reduce the treatment frequency.

Workers Compensation Managed Care Medical Provider System (Continued) –Fee Schedules This involves a legislated schedule of fees payable by specified CPT codes. Fee schedules establish a schedule of maximum charges applicable to: Caution: Must verify adherence to fee schedules through in-house review or through an independent vendor who shares in the percentage of savings. –Physician charges –Hospital Charges –Prescriptions –Other medical services

Workers Compensation Managed Care Medical Provider System (Continued) –Goal: An effective medical provider system results in medical cost containment. Indemnity losses may be indirectly affected.

Workers Compensation Managed Care Utilization Review Definition: Utilization review is a system to manage, assess, and review the injured employee care. –Frequency –Duration –Medical reasonableness/necessity –Appropriateness –Role: Care is evaluated based upon the following criteria:

Workers Compensation Managed Care Utilization Review (Continued) –Goal: Effective utilization review results in medical cost containment. Indemnity losses may be indirectly affected.

Workers Compensation Managed Care Vocational Rehabilitation Definition: Vocational rehabilitation is a systematic tool utilized to facilitate re-entry into the workforce. Parameters for vocational rehabilitation are established by the TPA/claims adjuster include setting objectives and measuring outcomes within established time frames.

Workers Compensation Managed Care Vocational Rehabilitation (Continued) –Role: Provides vocational assessments for feasibility of return to work. Helps employer formulate light duty positions, both short and long term. Perform labor market surveys and job searches. –Goal: Effective vocational rehabilitation results in reduced indemnity payments.

Workers Compensation Managed Care Employer One of the fundamental principles of managed care involves employer participation. –Safety programs –Wellness programs –Procedures for reporting job-related injuries –Workers Compensation system –Light duty/Return to work programs –Role: Provide educational materials and training to personnel regarding:

Workers Compensation Managed Care Employer (Continued) –Role: (Continued) Formalize light duty programs. Communicate frequently with injured employees. Involved in the selection of industrial/panel physicians.

Workers Compensation Managed Care Employer (Continued) –Goal: The employer involvement results in both medical cost containment and reduced indemnity losses.

Workers Compensation Managed Care The End