Workers Compensation Managed Care

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Workers Compensation Managed Care

• By
• Laura Deterding, ACAS, MAAA
• Midwest Employers Casualty Company

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Ratemaking Implications of Managed Health Care on
Workers Compensation Components and their
Ratemaking Implications
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The goal of Workers Compensation Managed Care is
to integrate cost containment with optimal
treatment to facilitate expeditious re-entry into
the workforce.
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Workers Compensation Managed Care
Participants
TPA/ Claims Adjuster
Vocational Rehabilitation Specialist
Injured Employee
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Workers CompensationManaged 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.

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Workers CompensationManaged 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.

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Workers CompensationManaged Care

• Case Management
• DefinitionCase 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.

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Workers CompensationManaged Care

• Case Management (Continued)
• Role
• Develop treatment plans and communicate those
  plans to
• Treating Physician
• Injured Employee
• Employer
• TPA/Claims Adjuster.

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Workers CompensationManaged 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 employers 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.

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Workers CompensationManaged 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.

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Workers CompensationManaged Care

• Medical Provider System
• PPO
• PPO networks involve pre-negotiated discounts for
  the employer by use of selected providers.
  Networks may include

Caution There is a potential for utilization
abuse. Should evaluate treatment frequency.
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Workers CompensationManaged 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.
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Workers CompensationManaged 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.
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Workers CompensationManaged Care

• Medical Provider System (Continued)
• Goal
• An effective medical provider system results in
  medical cost containment. Indemnity losses may
  be indirectly affected.

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Workers CompensationManaged Care

• Utilization ReviewDefinitionUtilization review
  is a system to manage, assess, and review the
  injured employee care.

• Role
• Care is evaluated based upon the following
  criteria

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Workers CompensationManaged Care

• Utilization Review (Continued)
• Goal
• Effective utilization review results in medical
  cost containment. Indemnity losses may be
  indirectly affected.

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Workers CompensationManaged 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.
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Workers CompensationManaged 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.

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Workers CompensationManaged Care

• Employer

One of the fundamental principles of managed care
involves employer participation.

• Role
• Provide educational materials and training to
  personnel regarding

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Workers CompensationManaged Care

• Employer (Continued)
• Role (Continued)
• Formalize light duty programs.
• Communicate frequently with injured employees.
• Involved in the selection of industrial/panel
  physicians.

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Workers CompensationManaged Care

• Employer (Continued)
• Goal
• The employer involvement results in both medical
  cost containment and reduced indemnity losses.

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Workers CompensationManaged Care
The End