SMARTCARE LAUNCHES NEXT GENERATION OF WORKERS' COMP MANAGED CARE IN CALIFORNIA.

NOVATO, Calif.--(BUSINESS WIRE)--Oct. 4, 1996--Fireman's Fund Insurance Company has brought the next generation of managed care to California workers' compensation customers by enhancing its SmartCARE(SM) program to include dual health care organization (HCO) options through a special arrangement with MetraComp(SM) Inc.

SmartCARE is Fireman's Fund's nationwide, comprehensive and integrated loss management program to reduce loss frequency and severity. Using state-of-the-art techniques in all areas, SmartCARE links accident prevention, claim preparedness, managed care and claim management.

Through the arrangement, Fireman's Fund will offer two state-certified HCO options in California: MetraComp's HCO Select and HCO Choice. HCO Select is a workers' compensation gatekeeper model featuring utilization management services and telephonic and field case management as well as prospective and concurrent medical management. HCO Choice is a free-choice network allowing workers to use any treating physician in the network without a referral from a gatekeeper physician. Both networks systematically select physicians skilled in occupational medicine and in returning injured workers to their jobs or appropriate modified work.

"Employee communication and participation mark the next stage of managed care for workers' compensation and are a natural step as we continually improve SmartCARE," said N. Brian Watanabe, vice president, managed care of Fireman's Fund. "We were delighted when MetraComp paved their way through the regulatory process to become the first managed care company with two state-certified HCOs. The HCO is a marvelous vehicle toward improving employee communications."

HCOs have not taken off in California, mainly because of regulations that require employers to offer two HCOs to employees if they offer one. Until recently when MetraComp obtained certification for its two separate HCOs, potential customers for the HCO had to deal with two managed care companies. Most employers declined taking on the additional administrative duties. However, according to Watanabe, HCOs mark a new phase in the evolution of workers' compensation.

"This is the first time that employers are required to give workers coverage information and ask them to make choices," Watanabe said. "This opens the door to education on all kinds of occupational health issues."

This awareness will promote better safety habits, better morale and ultimately fewer claims.

"As workers become participants in the process, managed care will not be something we do to them, it will become care we manage together," said Watanabe.

He pointed out that the employees are best positioned to know what kind of alternative work they could perform and are usually quite motivated to return to work.

Bruce Carlin, CEO of MetraComp HCO, explained that employers can exercise greater control over medical care by using the HCO option. Without an HCO, an employee can leave an employer-designated medical provider in 30 days. The HCO option can extend control up to from 90 to 365 days, depending on health care options at the job site and the employee's network selection.

Carlin added, "Greater employer medical control and enhanced employee communications of an HCO will drive down loss costs and related expenses. Even before HCOs, our network results have shown a 30% lower medical cost and much faster return to work versus non-network providers. In additional to the networks, we immediately involve highly skilled case managers who are backed by a physician peer review panel of 225 nationally recognized occupational medicine experts."

While praising the HCO option as a innovative managed care approach, Watanabe acknowledges that the HCO isn't for every employer. Fireman's Fund and MetraComp have many other techniques to improve the quality of care and employee communications.

"The key is that employers can't afford to get complacent. Higher premiums are not the motivating factors they were in the early '90s, but organizations need to realize that today's lower premiums won't continue unless they maintain their vigilance and use every available cost-saving technique," said Watanabe.

MetraComp is a United HealthCare company. United HealthCare is a national leader in health care management, serving purchasers, consumers, managers and providers of health care since 1974.

Fireman's Fund, based in Novato, CA, is a leading workers' compensation insurance carrier active in all 50 states. Its 8,000 employees and $3.8 billion of gross premiums written rank the 134-year-old company among the top 20 property and casualty carriers in the United States.

CONTACT: Media Contact:

Helen Knight, APR [phone]