Five Costly Mistakes
Employers Make with Workers’ Compensation Managed Care Organizations
While Workers’ Compensation Managed Care is widely
viewed as a means of controlling expenses, the results are sometimes quite
different from what is expected. In fact, in many cases the consequences
are not only unintended but also undesirable and costly to employers. How
is it that a system developed to manage the utilization of care and costs
associated with Workers’ Compensation actually ends up costing employers
more than is necessary? Here are five common mistakes that are often made
when working with WCMCOs:
1. Employers assume that the goals of the Workers’ Compensation
Managed Care Organization (WCMCO) are aligned with their goal of safely
returning the employee to work as quickly as possible
When employers select a WCMCO, they believe they are engaging experts who
share their objectives, in the same way they choose an attorney or accountant.
On the surface this makes sense. When employees are injured, the goal of
the employer is to provide the right treatment at the right time by the
right physician so that the employees can safely return to work as quickly
as possible.
On the other hand, the aims of the WCMCO are more complex and require an
understanding of how they work. While they may share the employer’s
return-to-work goal, they also have to make a profit. As a result, when
the WCMCO recruits physicians, they negotiate fees lower than those mandated
by the state, bill at the mandated price and pay the discounted fees to
the physician. The WCMCO is paid a percentage of the savings and the balance
is reported as a savings to the employer.
This arrangement has two unintended and undesirable outcomes. First, top
doctors are not attracted to the network. Second, it encourages increased
utilization – more visits, more tests, etc. to make up for the loss
of income. The more treatments, the more that is billed, and the more the
WCMCO earns. It is well documented that utilization is a prime driver of
medical costs in Worker’s Compensation that are higher than in non-occupational
employee health insurance. Ironically, the “savings” to the
employer increases as more bills are processed.
2. Employers engage a WCMCO that does not have physicians who are
properly trained in occupational medicine
The treatment of job-related injuries requires an expertise that transcends
the medical model followed by physicians who are trained to treat pathology,
disease and impairments. In Workers’ Compensation cases, there needs
to be an understanding of the functional requirements of the job, care coordination
and communication with the employee and employer, a knowledge of the how
the employer can accommodate an injured worker, and a grasp of the important
psychosocial factors involved in returning to work.
Overworked physicians have little time or incentive to visit patients’
workplaces or explore alternatives with the employer to maximize functional
and vocational recovery. This responsibility falls to the nurse case manager
whose role is to consult with physicians, assist in reviewing treatment
plans and help facilitate the optimal and efficient recovery of the injured
worker.
Again, the system sets the stage for undesirable outcomes. First, case management
is in effect, a rework because the right work is not being done,
adding another layer and more expense. Second, doctors do not perceive nurses
as peer review. Lastly, many case managers are not properly trained, nor
do they have the skills to coordinate and guide this complex process. In
the white paper, The “Management” in Case Management,
Byran Chong, IBM Global Social Segment, notes, “Between 10% and 50%
of case managers in Workers’ Compensation organizations are considered
not fully effective at what they do. These employees lack knowledge and
skills, and many are not motivated to improve.”
The result is episodic care management with a focus on cases flagged for
intervention by the payer, rather than a holistic approach of managing all
those involved in the process to optimize outcomes.
In contrast, a study of Louisiana workers’ compensation claims, showed
how a specialized care network of occupational medicine physicians and other
specialists with experience in treating Workers’ Compensation patients
and expert knowledge of the physical demands of work, resulted in significantly
fewer lost days and 40% lower costs of care.
3. Employers don’t realize the importance of Evidence-Based
Guidelines
When concerns were raised with WCMCOs regarding over-utilization and higher
than expected costs, the companies developed “Utilization Reviews”
designed to monitor the care injured employees receive to ensure that it
is appropriate, necessary and efficient.
It makes sense to have proven medical protocols for injuries so that the
right treatments can be applied with the right schedule to get the injured
worker back to work. While these protocols exist, many WCMCOs do not use
them. Since the present system financially rewards the networks when a claim
goes bad, there is an understandable reluctance to adopt these important
measures.
The American College of Occupational and Environmental Medicine (ACOEM)
Practice Guidelines Committee publishes scientific, evidenced-based Occupational
Medicine Practice guidelines, commonly referred to as “ACOEM Guidelines.”
The ACOEM guidelines consider the frequency, duration, intensity and appropriateness
of all modalities and procedures that are most commonly used in the treatment
of injured workers and establish benchmarks for the return to work.
A study in the Society of Occupational Medicine, Evidence-based care
for low back pain in workers eligible for compensation, concludes that
those workers who had evidence-based care, had less time off work, spent
less time on modified duty, and had fewer reoccurrences compared with those
who had usual care.
While there is a body of research supporting the results of evidence-based
guidelines, there remains a significant gap between the scientifically supported
approaches to care and the day-to-day practice.
4. Employers don’t engage in relationships with medical providers
So much of managing the cost of disability claims is working with the right
doctor who can diagnose the injury correctly, knows the protocols for Workers’
Compensation injuries, and is able to put in place proper guidelines for
medical care and return to work. Rather than relying on discounts, employers
should provide incentives by extending the scope of services to include
post offer employment screening, drug testing and maintaining work wellness.
An appropriate fee schedule combined with evidenced-based guidelines will
ensure quality health care for injured workers, while reducing costs to
employers.
5. Employers don’t require quantitative measures of results
A crucial part of assessing the quality and effectiveness of any medical
program is the development of appropriate performance measures. There is
a surprising paucity of information on the results of care from WCMCOs.
A project by the Robert Wood Johnson Foundation Workers’ Compensation
Health Initiative found that a number of barriers exist to introducing standard
performance measures in WCMCOs, including the inadequacy of patient data
maintained by WCMCOs and the low demand from purchasers for the standard
performance measurers.
Employers need to be proactive and insist that they receive:
a. Qualifications of the physicians and nurse case managers: are they properly
trained experts in the care of occupational injuries?
b. Timely and appropriate care: are evidence-based guidelines used?
c. Outcomes: duration of disability, reduction in medical and indemnity
costs, return to work, employee satisfaction.
d. Disability prevention: is there a program to match fitness to job requirements,
post offer employment screening, etc.
WCMCOs were implemented to provide high-quality, cost-efficient service
to the injured employee and their employers. All too often the present system,
as structured, produces unintended bad results. Employers need to proactively
turn their attention to the way Workers’ Compensation Organizations
think about, implement and measure their performance. |