We belong to a lot of mailing lists for various groups that involve risk management and workers compensation. Many of them have discussed the future of how workers compensation will be handled, since many states have revamped the way benefits are handled and how they are paid. For example, in Michigan the employer previously could control where the claimant was treated for 10 days. After the 10 day period, a claimant was open to treat with anyone of choice, provided that the doctor abided by certain rules. Now, this has changed from 10 days to 28 days. This change is huge, since it adds on another 18 days worth of controlling where the claimant can treat. Since most minor injuries resolve within a few weeks anyway, this statute change was seen as a way for employers to retain more control over the outcome of the workers comp claims. Many other states are following this precedent, making the workers comp system more defense-oriented, and cost effective.
Here are a few more things the industry rumor mill is buzzing about:
Workers Compensation preferred provider networks
Similar to personal medical networks, the workers comp medical payment system has largely abided by the rule of preferred pricing for workers comp services. Seen as “cost containment,” this provides insurers with an incentive to send the injured employees to certain hospitals and clinics at a discounted rate usually run by ICD-9 codes. For example, a routine doctor visit may usually cost about $100, but if this clinic is in a preferred medical network, it may only cost $60 to the insurer.
The downside to this is the medical industry has to slash rates lower and lower tries to become more competitive. Insurers will often make these medical networks bid against themselves in order to try and find the cheapest rate with the medical facility having to scramble to find ways to reduce costs. For example, some clinics have used Physician Assistants instead of actual MD or DO physicians for minor injuries in order to reduce appointment cost. Other discounts include reduced rates for physical therapy, durable medical equipment, patient transportation services, diagnostic tests, and so on.
In order to combat bidding between hospitals and clinics, some vendor companies have arisen that provide a workers compensation “preferred provider network.” This will include a group of clinics and hospitals, at pre-discounted agreed upon rates. So instead of the insurer doing this bidding themselves, they can use this vendor as the go-to place to find numerous clinics at competitive rates. This saves the insurer time and money, without compromising medical care in the process.
These networks will state what services are included, such as only having an MD or DO treat a workers comp patient, guaranteeing that an injured worker will see an actual doctor and not a PA or a Registered Nurse for treatment. This is seen an as incentive, since the general public may feel adequate care from a physician assistant is not possible versus treatment from an actual physician. These vendors are becoming more and more popular, so I expect to see many insurers and TPAs using them in the future.
Updating the actual worker’s comp Statutes
Many states use workers comp statutes that are decades old, if not older. These laws are very dated with some not applicable to today’s workforce. In order to bring things up to speed, a lot of politicians are attempting to update the system.
Look again at the control of medical care increased from 10 days to 28 days in Michigan. Obviously the longer the employer has the direction to steer claimants towards occupational clinics, the more often they avoid prolonged workers comp exposure by an employee seeing a personal care physician unfamiliar with workers’ compensation. The consensus is that anyone can be taken off work by a personal care doctor. This extends the period a person could be receiving workers’ compensation pay when they could actually be working either full duty or on light duty with medical restrictions.
This statue change is seen as a positive to the insurer or TPA since they will see reduced costs associated with workers’ comp claims, both on the medical side and on the indemnity side. Other law changes to note include more aggressive vocational programs to get workers into new employment, a stronger defense on claims where pre-existing medical conditions are present, and an overall streamlined litigation process that speeds a claim to resolution. Again these are all to the benefit of the employer or insurer since they bear the financial burden in funding these workers comp claims.
The use of “debit cards” instead of actual hard copy workers comp checks
It is hard to go anywhere these days where people actually pay with cash. Everything is placed on a debit card linked to the individual person’s bank account and many of us carry little to no cash. It is also difficult to find anyone that receives an actual hard copy payroll check which calls for a trip to the bank for deposit. The workers comp system has lagged behind severely in this aspect. Most insurers and TPAs still issue a hard copy check, to be mailed to the employee every week. This results in the injured worker making a trip to the bank every week in order to cash the comp check. This also includes some lag time for the USPS to deliver the check. If the check is issued in Oregon, and the recipient lives in North Carolina, then the check has to travel across the US before it is finally received.
A lot of chatter has been going on about making it mandatory for Carriers and TPAs to make the move to either direct deposit, or to issue standard debit cards which can be loaded with the workers comp monies every week. This will save on postage costs, reduce lag time, and bring the dated pay system up to date. This change will not happen overnight, but it could in the not so distant future.
Summary
There is an air of change in the world of workers compensation. This is coming in the way of legal changes, medical changes, and indemnity pay changes. Workers compensation is never going to go away. In order to become more relevant to today’s needs, the system has to be updated. These are only three items that are currently trending in discussion, there will continue to be a lot more of these types of changes in the future.
To keep up to date with the happenings of Workers Compensation, please visit our website Lowerwc.com to watch the National News Feed and to see changing laws and regulations.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.
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