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Workers' compensation.

According to the experiences of a number of firms, many of the medical cost containment programs used to reduce employee health payments can also be used to trim workers' compensation costs, said Gregory K. Myers, senior vice president at Becher & Carlson Risk Management Inc. in Woodland Hills, California. "These methods include developing in-house treatment programs, the use of direct contracting and preferred provider networks, and medical bill reviews."

In-house programs involve hiring and maintaining medical personnel on-site, said Mr. Myers. "Benefits of this approach include reducing care costs, providing prompt access for employees and an increased ability to manage claims." These programs also allow companies to customize care for injured employees, said Mr. Myers. "Because the medical staff is on-site, they can develop a thorough knowledge of employees' work tasks, increasing their ability to provide care for injuries as well as for developing appropriate return-to-work programs," he said.

Other firms join preferred provider networks in order to reduce their workers' compensation costs, said Mr. Myers. "Benefits to this approach include reduced fees and costs and improved access for employees," he said. Mervyn's Department Stores is one example of a company that has set up a preferred provider network for workers' compensation, said Michelle Patton, director of risk management for Mervyn's. "However, Mervyn's is careful to audit the network to ensure that its physicians are providing quality care," she said.

Some companies contract directly with outside providers in order to develop their own preferred provider networks. "The major advantage to this approach is that it allows the employer to gain complete control of the network," Mr Myers said. However, only large companies are likely to have the resources needed to create their own network, he added.

Also, firms that form networks have the added burden of selecting and screening the providers, said Mr. Myers. "The employer must manage the delivery of services and negotiate terms and fees," he said. "And since the company selects the providers, this increases its liability."

Mr. Myers pointed out that many states prevent employers from selecting providers for their workers. "However, firms in such states can offer employees non-financial incentives to use certain providers," he said. "These incentives can include furnishing employees with information demonstrating that the provider it has selected is easily accessible and offers quality care."

However, all employers, regardless of whether their states allow them to select providers, can benefit from provider bill reviews, declared Hugh Cone, principal at Corporate Health Concepts in Whittier, California. "Provider bill review involves examining medical bills in order to ensure that they accurately reflect the treatment that patients receive," he said. "It provides savings and a way to develop networks of efficient providers."

The information gleaned from bill reviews is used to examine the level of provider service, said Mr. Cone. "By examining this information, employers can see exactly what doctors are doing, and how often they are treating patients," he said. "If, for example, a patient has made what seem to be an excessive number of visits to a doctor, the employer can query the physician about the treatment."

When performing such reviews, risk managers must ensure that their claims administrator is converting the information into savings, said Mr. Cone. "Firms that use a third-party administrator should set up an audit system to randomly review medical payments to make sure the claims department is paying the reduced amount." Finally, once an employer has developed a network, bill review

can be used to manage it, added Mr. Cone.
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Title Annotation:RIMS Conference panel
Author:Christine, Brian
Publication:Risk Management
Date:Jun 1, 1993
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