1. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. Directing Care through the Illinois Workers’ Compensation Preferred Provider Program (IL WC PPP) Presented by: Elizabeth Kerr, HFN/Stratose March 10, 2016 Presented by: Elizabeth Kerr, HFN/Stratose March 10, 2016

2. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Who is HFN a Stratose Company Founded in 1985, we are the Midwest’s most comprehensive healthcare network, offering solutions for Group Health and Workers’ Compensation. We have been helping insurers, employers and employees meet their healthcare goals and control costs for over 30 years. Page 2 Regional Group Health and Workers’ Compensation PPO Approved WC PPP 317 hospitals and over 52,000 physicians under contract Our network is based on access and availability to meet the standards set by the Illinois Department of Insurance Our WC PPP network is based on savings, however we have developed a certification process for occupational medicine sites (COP sites) that focus on quality outcomes and return to work initiatives Our service area is Illinois NW Indiana, Wisconsin St. Louis Quad Cities Nationwide Access Our client base includes: Insurance Carriers Third Party Administrators Employers Taft-Hartley Funds Bill Review Firms Hospitals Physicians

3. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // IDOI 2015 Annual Oversight Report Overview of Illinois Workers’ Compensation  339 insurance companies wrote $2.75 billion in premiums in 2014 ―More insurance companies than any other state  Illinois ranks 4 th in premium dollars ―5.01% of total national premium (CA 20.79%, NY 9.58%, TX 5.18%)  NCCI 2016 advisory premium rates for Illinois are level with 2015, and 18.1% lower than 2011  135,530 workers’ compensation claims were opened in 2014 (2.52% increase from 2013)  63,729 claims included loss time ―57% < 3 days ―17% 3-14 days ―26% > 14 days  Lost time claims represent 25% of the total claim volume and 95% of total WC benefit costs  Medical only claims represent 75% of total claim volume and 5% of total WC benefit costs  The share of benefits paid for medical care exceeded 50% in 33 states National Statistics Page 3

4. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Workforce Composition  Silver Tsunami ―65 isn’t retirement age ―55+ workforce more than doubled 1994 – 2014; 20% increase by 2024 ―Higher salaries, injury severity, longer recovery time  Obesity ―Duration of lost income claims were 5x greater for severely obese workers than those not obese filing comparable claims  Co-Morbidities ―Medical costs almost double for workers with 1+ diagnoses for comparable claims Page 4

5. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // 5 Source: U.S. Bureau of Labor Statistics, U.S. Department of Labor, November 2013 Incidence rates and numbers of nonfatal occupational injuries by private industry sector, 2012

6. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Where are the Savings?  Direction of care through the WC PPP  Policies and Procedures  Communication  Provider Partnership Page 6 $$$

7. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // 2011 IL WC Reform - Effect of IL WC PPP Page 7 Direct Care Employers may direct injured employees to specific providers within the WC PPP and those employees can only choose providers that participate in the WC PPP Payment The employer is only responsible for payment to in-network providers and in- network referrals In-Network Providers can only refer WC PPP Patients to an in-network facility or specialist $

8. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // WC PPP Impact on Employer/Employee Provision of injury care Committed to appropriate and quality treatment Referrals and efficient care management that can get the injured employee back to work at the highest level of functionality WC PPP offers the ability to direct care to providers that are skilled in specific areas This only applies to injuries that occur after the employer’s effective date of WC PPP No transfer of care option for existing injuries When does this take effect Employee has 2 choices of WC PPP providers, and all of the resulting in-network WC PPP referrals from those providers, covered by the employers All of subsequent referrals in that provider’s referral tree must remain with the WC PPP as well. When an employer chooses to utilize a WC PPP the employee must choose an in- network provider/facility Page 8 The decision to utilize a WC PPP is determined at the employer level

9. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // No WC PPP? Status Quo  Illinois is an “Employee State” ―Employers could recommend specific providers to their injured workers ―Providers could refer to any facility, provider or specialist ―Employees had the choice of any provider Page 9 What options do you have? What is in our area? Who can help? What options do you have? What is in our area? Who can help?

10. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Introducing… Southern Illinois WC PPP!!!  SIH and HFN have partnered to offer the WC PPP in this market ―Injury Care and treatment management through SIH and other selected providers ―Local expertise, service and support ―Implementation and Administration through the HFN WC PPP Page 10

11. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Southern Illinois WC PPP Page 11 Access to CareReturn to work Providers proficient in injury care and RTW Prompt care Efficient testing and use of resources Integration with employer job demands, transitional and light duty options with communication and follow-up Focus on returning the injured worker to the job at the highest level of function in an efficient and cost effective manner

12. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Benefits of a WC PPP Page 12 Designating a WC PPP is beneficial for any employer interested in the ability to direct the care of injured workers. Depending on the specific client needs, SIH and HFN will work with any client to determine if a WC PPP is appropriate for their workforce.  Control costs and additional savings with increased provider penetration  Lower costs to employers ―Increased network penetration ―In network referrals ―Negotiated provider rates  Managed and credentialed provider network ―Board Certified physicians ―Accredited hospitals

13. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Implementation Page 13 If you chose to move forward with the IL WC PPP, the following steps are required to be completed Employer and Employee Demographics Mandatory Notice Form Policy and Procedures Opt-out Procedures Employer Implementation Steps: A Summary Use of Advisory Notice Roll out and Communication Plan

14. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Policies and Procedures Page 14 Safety Training Programs Key business goal New Hire/On Boarding process Routine Safety Meetings Timely Reporting Injuries $ Time = Money 2 weeks lag can increase costs by 18%, a 4 week lag by 42% Immediate reporting can reduce litigation by 42%, average costs by 7%, days a case is open by 12% Return to Work (RTW) Detailed job descriptions Set formal process Expectation setting Light Duty options at location or nonprofit RTW Benefits Lower indemnity payments Improved productivity and morale Faster recovery

15. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Communication Plan Page 15 Position as an employee benefit plan Improve employee literacy & engagement  New Hire,  Open Enrollment  Initial WC PPP Roll-out  All benefits meetings Post Injury Employee reach out plan Post Injury Employee reach out plan Pre Injury Meetings, documentation, education Pre Injury Meetings, documentation, education Absence of information breeds fear and mis-trust, which increases the potential of employee hiring an attorney

16. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Best Practices Page 16 Keep employees out of emergency rooms Medical providers educated in WC requirements Functional job requirements and RTW options during initial visit Utilize case management tools Develop an integrated approach to health, safety and wellness in the workplace Take advantage of additional occupational health services Job demand analyses Base line testing Drug testing Ergonomic evaluations

17. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Page 17 Source: 2015 Homelink Goal is to fit the most medically necessary hearing device for the Claimant while providing cost savings to the Payor. Average Savings: $2,200 per order $11,000 lifetime. Review and Initial Client Experience Initial Client Experience One large multi site client – active for two years 95% + WC PPP Utilization WC PPP claim cost is 4x less than the opt-out employees Illinois Work Comp Reform Potential issues being discussed in Springfield Initial Client Experience One large multi site client – active for two years 95% + WC PPP Utilization WC PPP claim cost is 4x less than the opt-out employees Illinois Work Comp Reform Potential issues being discussed in Springfield

18. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Next Step to Implement a WC PPP Page 18 Please contact:  Verlinda Henshaw 618-942-2171 ext 35479 Verlinda.Henshaw@sih.net  Colleen Musgrave 630-472-6512 Cmusgrave@Stratose.com

19. © 2016. This information is for the sole use of the intended recipient and may contain confidential or legally privileged information and is exempt from disclosure under applicable law. Any unauthorized review, use, retention, printing, disclosure, or distribution is strictly prohibited. // Page 19 Answer & Question Liz Kerr 630.472.8562 ekerr@stratose.com Localized Expertise with National Resources