Managing Medical Treatment for the Employer

Sunday, August 18, 2002 | 0

Dramatically increasing workers' compensation prices are a fact, and have been for the past 3 years, with no relief in sight any time soon. The biggest cost driver in workers' compensation, according to several studies lately, is the medical component. There are several options available to the work comp savvy employer, and the key is to manage the treatment given to the injured worker as best you can.

In California, one medical management option is to enlist with a health care organization (HCO). Authorized by the Legislature five years ago via Labor Code sections 4600.3 through 4600.7, the thought was that an HCO could bring the cost-containment benefits of managed care to workers' comp. Some of the HCOs licensed to do business in California include Priority CompNet, Torrance; MedEx Health Care, Santa Monica; Medical Group at City Center, Oakland; CompPartners, Irvine; CorVel Corp., Gold River; Kaiser Foundation Health Plan, Oakland; and Sierra Health & Life, Las Vegas.

But HCOs won't always work for small to mid-size businesses. Many carriers that write small business accounts don't contract with an HCO. For example, the State Compensation Insurance Fund, which writes more than 70% of California's small businesses and more than half of the state's mid-size companies, does not contract with HCOs. SCIF, instead, has its own preferred-provider network and contracts with Kaiser Permanente to offer coordinated care for workers' comp cases through out California.

Private-sector work comp carriers don't all promote the idea of HCOs either. Some offer their own preferred-provider and case-management services and some agents don't want to saddle their business-owner clients with the paperwork involved in contracting with an HCO.

The paperwork involves the old cost-benefit analysis. It is not terribly overwhelming, mirroring that of a typical group health plan. Employee data, name, address, age, etc., must be gathered and reported. Time must be set aside to educate your employees on work comp under an HCO and once a year, you must offer them a 30-day open-enrollment period.

Your insurance broker can tell you about HCOs and whether your insurer (or another carrier the broker deals with) contracts with HCOs as well as what's involved in signing on. Also, premiums are typically discounted for employers that opt for HCOs so a cost analysis should also be a part of the education process.

Finally, take advantage of the case-management and workplace-safety services your insurer offers. Talk with the carrier's claims department on recommendations in your geographic location for physicians and other medical professionals who understand that the object is to get the worker well and back on the job as soon as possible.

Once a worker gets injured, it's easy to lose medical control. Setting up a medical management plan before the injury is one of the best ways to control your work comp costs.