1. Performance-Based Oversight April 19, 2006

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

3. 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

4. Who is using PBO? Department of Energy  http://www.orau.gov/pbm/initiatives/bmop.html US Nuclear Regulatory Commission  http://www.nrc.gov/what-we-do/regulatory.html Blue Cross/Blue Shield Texas  http://www.bcbstx.com/provider/bluechoice_solutions/ind ex.htm Texas Commission on Environmental Quality  http://www.tceq.state.tx.us/compliance/enforcement/histor y/index.html

5. 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

6. 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

7. 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

8. 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

9. House Bill 7 §402.075 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

10. 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

11. 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

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

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

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

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

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

17. Tiers Poor performers Generally average performers Consistently high performers

18. 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

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

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

21. 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

22. Discussion Topics

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

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

25. Minimize Disputes Area to MeasureHow to MeasureData Used to Measure

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

27. Workplace Safety Area to MeasureHow to MeasureData Used to Measure

28. Area to MeasureHow to MeasureData Used to Measure

29. Area to MeasureHow to MeasureData Used to Measure