Fee Schedules: The Savings Do Not Stop There

Thursday, September 6, 2012 | 0

The National Council on Compensation Insurance had lowered the loss costs or advisory rates for Illinois and Tennessee. The reductions were due to both states enacting fee schedules a few years ago. This will save employers in both states millions in workers' comp costs.

As I said in my post yesterday, there are many other additional savings beyond just a fee schedule. Self-insured employers will usually have their workers' comp third-party administrator also do their bill review. That is a good step, as almost all TPAs have a medical treatment network that will reduce the in-network medical bills by 15%.

The TPAs will likely offer pharmaceutical, physical therapy, radiological and many other types of networks.

The same 15% reduction will also be available to non-self-insured employers that are paying premiums for coverage with their carrier. The carrier will usually provide various networks similar to TPAs.

The one big difference between TPAs and carriers is that carriers will usually only provide one certain network for employers. Sometimes the TPAs will have multiple networks from which to choose. The self-insured employers will sometimes request the TPA interface with the employer's own choice of a network.

The 15% reduction is a big IF as the employer has to make sure the injured employees:

• Treat in-network and not roll the dice and hope wherever the employee treats is in-network. We have seen in our file review for employers the 15% offered savings was not used as often as possible. Throwing away 15% on med costs can be costly over time, especially in the medical cost-spiraling states, such as California.
• See the most competent industrial minded medical providers are being chosen out of the network. If a $75,000 questionable medical procedure is performed, then the 15% saving will seem puny at best.
• Treat with medical providers that are great communicators. As I have said often, communication is the largest cost saver in workers' comp Normal 0 MicrosoftInternetExplorer4 − no doubt about it. Return-to-work issues can often be resolved with an open dialogue between the employer, employee and medical provider.
• Rehab nurse recommendations Normal 0 MicrosoftInternetExplorer4 − very often the rehab nurse assigned to the file knows the local players in the medical treatment networks better than anyone else. If the rehab nurse has an open dialogue with the nurses of the medical providers that are in-network, you are reaping huge savings.