The Case for Medical Provider Networks (MPNs)
Stuart Baron has this to say about Medical Provider Networks (MPN), today's newest medical treatment solution for workers' compensation.
"Quality Medical Treatment is the Key to Controlling Workers' Comp Claims — I believe it is safe to say that there is at least one basic truth in workers' compensation. If you can keep your injured worker(s) treating with competent doctors, you have a better than even chance for their complete recovery and return to their usual and customary work with a minimum of little or no lost time.
On the reverse side, it is equally safe to say that if you lose medical control to a doctor/lawyer team who place their own interests above that of the injured worker, the claim will cost you a lot more money. There will be excessive temporary disability, outrageous medical bills from the injured worker's doctor(s) along with inaccurate medical reports that will have to be countered by your insurance carrier or third party administrator (TPA).
With no medical control, you can expect an inflated Permanent Disability (PD) rating as well as the potential need for Vocational Rehabilitation (VR) benefits. It is not unusual for an applicant-oriented doctor to find that the injured worker is unable to return to his/her previous occupation. And finally, there are the necessary legal fees incurred to settle the claim. What started out as a fairly simple injury has now progressed into a $25-$30,000 settlement and that is a conservative estimate."
How Did This Happen?
Since the middle 1970's, it has been the law in California (Labor Code 4600) that employers have 30 days absolute control over the treatment of work related injuries and illnesses. However, the problem is that less than 20% of all injury claims can be treated and closed (with the injured employee released to full duty) within the 30 days allowed by the statute.
This means that the injured worker (and his/her attorney if they have one) can simply wait 30 days and then select a doctor of his or her own choosing. This new doctor then becomes the Primary Treating Physician (PTP) and his/her diagnosis and findings control the claim. The burden of proving that the injured employee's new doctor is wrong then shifts to the insurance company or TPA, who must overcome the PTP doctor's report with their own credible medical report thereby adding to the cost of the claim. How do you prevent this from happening? Make sure that your carrier or TPA, if you are self-insured, has an effective MPN program in place.
An MPN Can Reduce Costs!
The MPN program was created by the California legislature as part of the 2004 Reform Act (SB 899). It is best described as a comprehensive medical treatment program for work related illness or injuries and is overseen by the state. It is similar to an HMO because it provides all services needed to cure the illness or injury and return the worker to his/her job. However, it pays no bills and is responsible only for the medical oversight of any given claim. The on-going overall responsibility for the management of the claim remains with the employer's workers' compensation carrier or TPA, if self-insured.
What is the Real Benefit of an MPN?
An MPN offers employers and their insurance carriers an extremely important benefit. It extends the amount of time they have to direct the medical treatment of the injured employee. Thus, with a well-managed MPN in place, an employer gains invaluable additional time to provide quality medical treatment to their injured worker. Labor Code ß 4616 extends the amount of time employers have to provide care to their injured employee from the current 30 days allowed by Labor Code ß 4600 to "cradle to grave" control.
For the past 10 years our first program (HCO Plus) gave us a minimum of 90 and up to 180 days of medical control. The number of claims that closed with a minimum amount of cost and lost time was outstanding. As noted above, with the traditional 30 days offered by LC 4600, we were able to close on average about 20% of all claims within that period of time. However, with 90/180 days within which to direct treatment, we saw an average of 80% closure rate.
Based on this experience, coupled with the new MPN "cradle to grave" control, we expect a closure rate of 95% to 99%. This simply means that if everyone does what they are supposed to do and controls the quality and quantity of medical treatment of the injured worker, all claims should close without the intervention of an applicant attorney.
This closure rate has translated into substantial direct dollars saved in temporary disability, permanent disability, medical and of course legal costs. For employers who were in our HCO program for a minimum of two years the average direct cost savings was 40% to 50% on indemnity claims. We expect even greater savings with the new MPN program.
The WCCC/Net-Work HCO Approach to MPNs and Medical Control
WCCC recognized the incredible value of extending the amount of time employers have to control medical treatment when the first legislation was passed authorizing HCOs in 1993. We installed our first HCO successfully in 1995 for an employer client with the full cooperation and support of their carrier, The Travelers Insurance Co.
We now have the new MPN program authorized in 2004 by SB 899. We feel this program will give us even greater results through our ability to provide quality care to injured employees throughout the entire life of the claim while keeping the costs associated with the claim at a reasonable level.
WCCC's approach to HCOs and now MPNs is quite different from the way others utilize the program. After listening to the many objections voiced by claims personnel and employers, we devised a method over the past 10 years that has:
What Makes the WCCC/Net-Work HCO MPN Approach Different?
- Significantly reduced the up-front costs to all parties while at the same time simplifying the administrative process.
- Allowed claims examiners to make informed, real-time decisions on each claim using the case management tools provided by our MPN.
- Provided active claims oversight by our MPN's highly experienced claims staff thereby ensuring that the claim is well handled from the outset.
- Provided unlimited phone/FAX access to our clients for answers to those day to day questions that may have an impact on your workers' compensation program. Examples would be questions on effective claims handling as well as how best to hire, discipline and fire an employee. Other issues could be whether or not you need to provide "reasonable accommodation" or modified/light duty work for an injured employee under ADA, FMLA and the new state requirements under AB 2222.
- The WCCC/Net-Work HCO aggressive, pro-active approach to the management of workers' comp claims coupled with unlimited access through our exclusive "Management Hotline" has proven to be the final piece in the puzzle of how to effectively manage your workers' compensation claims.
We all know that there is nothing free in this world. Therefore, we ask the insured employer to pay the first year's program cost either directly or through a billing by their carrier, with the assurance from their carrier that they will receive underwriting credit for all or part of the money spent on the MPN at next year's renewal.
We have found over the years that when an employer commits to paying for a program, it ensures the employer's active participation in the overall process. With their money on the table, employers are loath to leave the management of their claims to chance. Carriers welcome the increased medical control afforded by the MPN as well as the employers' active involvement and participation in the claims' process.
Our own experience with extended medical control over the past ten years has proven that this "team approach" works to reduce both the number of claims filed as well as their associated costs. To be more specific, with a properly installed and administered MPN program, the average time to close a claim has been reduced to 9-11 months as compared to the industry average of 18 - 24 months. This has translated into substantial savings in:
The following illustrates the benefits of installing an MPN for any employer:
- Total Temporary Disability payments.
- Medical costs because we have only one Primary Treating Doctor.
- Permanent Disability Ratings and Payments.
- Vocational Rehabilitation Costs.
- Medical/Legal Expenses.
Put the Net-Work HCO MPN to Work for You
- Without an MPN — The employer has only 30 days of medical control over an injured employee's medical care. About 20% of all claims are closed within this time period.
- With an MPN — Employers have absolute medical control from "cradle to grave" unless the employee has successfully pre-designated his/her Primary Care Physician.
Net-Work HCO continues to fine-tune our medical provider network. We are working towards a select and dedicated panel of quality providers who focus on the needs of the injured employee and their speedy return to full duty. Our commitment to our clients is at both the clinic as well as the specialist level. Our goal is to provide the very best care possible for the injured employee. Please visit our Net-Work HCO website at www.networkhco.com for more information on how this unique program can work for you.