AHM 530: Provider Networks for Workers’ Compensation

Issue #3: Duplication of Expenses

Issue #3: Duplication of Expenses10

Sometimes workers’ comp programs are administered separately from group healthcare plans,
even though functions such as record-keeping, claims, and customer service are similar for
both. As a result, resources are often used to provide duplicate functions. Administrative
duplication is further increased if the employer offers separate disability benefits. Additional
resources are required to keep work-related illness or injury separate from non-work-related
conditions.

Managing workers’ comp benefits and medical benefits under one plan, rather than separating
benefits into different plans, reduces administrative expenses. It also reduces the need to
distinguish between work-related illnesses and injuries and non-work-related conditions. In an
integrated system, the cause is irrelevant. The focus is on returning all employees to work as
quickly as possible. Health plans can offer this integration through a concept known as twenty-
four (24)-hour coverage.

Case Study: Duplication of Expenses

Ms. Smith was working within the scope of her employment when she slipped and hurt her
back. She will need medication and physical therapy to fully heal, but there is no permanent,
debilitating injury. Because she was injured on the job, she is entitled to workers’ comp. Ms.
Smith also has medical coverage from her employer-sponsored health plan, along with
disability income coverage through her work. How will she be treated?

• Within a 24-hour coverage scheme, Ms. Smith will receive coverage for both work-
related and non-occupational health care from the same provider
• This means that Ms. Smith can go to her primary physician, under her employer-
sponsored plan, to receive proper care and treatment for her injury. She will not have
to go through extra “administrative red tape” and will be back at work in a matter of
weeks
• This results in administrative cost savings, along with reduced litigation over workers’
comp claims

24-Hour Coverage

If managed workers’ comp offers the potential to improve quality and reduce costs, then many
believe that 24-hour coverage offers even greater potential. Twenty-four-hour coverage,
sometimes called comprehensive medical event management, is the integration of workers’
comp coverage—both the medical and the disability components—with non-workers’ comp
healthcare and disability coverage.

In 24-hour coverage, all an employee's health needs- whether work-related or non-

occupational-are covered by a single health care provider. Thus, coverage exists around the
clock

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Twenty-four-hour coverage offers several cost and quality advantages. Health plans offering
24-hour coverage can realize efficiencies and cut overall costs by combining administrative
services. They can also improve the quality of care members receive by maintaining
comprehensive information about patient care from all sources in one location. Providers
can use this information to coordinate services and ensure that patients receive
appropriate care. Health plans can gain control over utilization and can avoid unnecessary
costs. Members benefit from the convenience and simplicity of combined operations. They
have the same point of entry to the healthcare system (they call the same number or
contact the same person) whether their condition is job-related or not.

Double Dipping

Twenty-four-hour coverage minimizes the occurrence and effects of cost shifting. It can also
help the health plan to identify and avoid other forms of fraud. For example, UM and QM
programs that monitor the treatment delivered to plan members from all sources can help
prevent a practice sometimes called double-dipping, in which patients claim benefits for the
same healthcare services both from workers’ comp and from their group health coverage.

State laws vary on twenty-four-hour coverage and not all carriers offer both employer-
sponsored group coverage and workers’ comp. California stands out as one state which has
taken the lead and been a strong proponent of the integration of 24-hour health care
coverage with its workers’ comp system.

Workers’ Compensation Provider Networks

Developing and Managing Workers’ Compensation Provider Networks

Many workers’ comp network characteristics are similar to other provider network
characteristics. Like other provider networks, workers’ comp provider networks consist of
carefully selected, appropriately credentialed medical professionals who provide their
services to claimants at a discounted cost.

The network is designed to ensure quality and reduce medical costs. Providers who
participate in the network agree to accept the reimbursement specified by the health plan,
cooperate with the health plan’s quality initiatives, and participate in the health plan’s UM
efforts in return for increased patient volume. However, a managed comp network must
comply with certain legal requirements specific to workers’ comp. In addition, it must satisfy
a unique set of patient and sponsor needs and expectations.

Legal Considerations for Workers’ Compensation Provider Networks

Each of the 50 states and the District of Columbia has its own workers’ comp program. 11
Employers in all states, except Texas, are required to provide workers’ comp coverage for
their private-sector employees, with limited exceptions for small employers and workers in
specific classifications, such as agricultural or domestic employees.

State laws mandate the type of coverage that must be provided and the circumstances under
which benefits are payable. If an employee seeks treatment for a work-related illness or
injury, an employer cannot deny liability, even if it is not at fault. In return for this coverage,
employees are bound by the exclusive remedy doctrine, which requires them to accept

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workers’ comp benefits as their only compensation in cases of work-related injury or illness.
Employees cannot sue their employers for additional amounts, except in certain extreme
situations.

Laws governing workers’ comp differ from state to state, including as to who can provide
insurance, which injuries or illnesses are compensable, and the level of benefits provided.
These variables can create complexity for organizations offering workers’ comp coverage in
multiple states. However, certain requirements are uniform in all states. For example,
workers’ comp generally is first-dollar coverage, meaning that employees cannot be required
to contribute to the costs of their care through deductibles, coinsurance, copayments, or
disability waiting periods.

First-Dollar Coverage

Workers’ comp insurance tends to be written on a “first-dollar coverage” basis, which means
there is no deductible or another self-insurance component to the coverage. This means that
when a claim is filed in connection with a work-related injury, the insurance carrier will pay
the claim without the employee first having to pay a portion of expenses to trigger coverage
under the workers’ comp plan.

Example: Many of us are familiar with the use of deductibles in the automobile insurance
context, where a policy may require the policyholder to pay a specified amount (for example,
$500) out of pocket before contributing to automobile damage claims. In the case of minor
damage, like replacing a cracked taillight, the entire cost may fall within the deductible. This
type of structure is generally not a feature of workers’ comp insurance.

Last-Dollar Coverage

Health plans may not place limits on the benefits they will pay for a given claim, this is also
known as last-dollar coverage. In addition to first-dollar coverage, workers' comp can be
written on last-dollar coverage. From the health plan’s point of view, one major disadvantage
of first-dollar and last-dollar coverage is that employees are insulated from the cost of the
healthcare they receive and have little incentive to seek cost-effective care.

Other Consistent Features Across the States

Other consistent features of workers’ comp coverage across the states include: 12

• Lost-time compensation may be subject to a waiting period, typically three to seven

days, that may be retroactively waived if the disability involves hospitalization or a
longer duration of work absence
• Wage-replacement rates vary by state but are, on average, about two-thirds of a
worker’s pre-injury gross wage
• Lost-time compensation is tax-exempt and typically restricted by
minimums/maximums established under state law
• Most states permit deductible policies in workers’ comp insurance, but state
regulations vary regarding specifics, such as the maximum deductible allowed and the
minimum premium volume eligible for a deductible policy

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Basic medical benefits are treated the same in every state, with all statutes requiring medical
costs, surgical fees, nursing care expense, and medication costs necessary to “effect a cure
and give relief” to be fully paid by the workers’ comp insurer. 13 Additional medical benefits
also are available across the states but may differ based on jurisdiction. For example, every
state provides some form of rehabilitation benefit, but the extent/amount of the benefit
available may vary by state.13

Provider Choice

States differ regarding how provider choice is addressed. Twenty-one states require the
employee to use the physician picked by the employer from among a list of authorized
physicians, while the remaining 29 states and the District of Columbia allow the employee to
choose the physician (with some requiring periodic consultation with an insurer-selected
physician). But 19 of the “employee-choice” states limit the employee’s options to physicians
within a managed-care type network.13

When the employee has the option to choose a non-network provider, all the health plan
can do is encourage the employee to choose a network provider. In this situation, employee
satisfaction with the network is of extreme importance. An employee with the option of
choosing a non-network provider from the onset may be more likely to choose a network
provider if he or she knows of other employees who have been satisfied with the network.
An employee who is required to use a network provider during the initial part of his or her
treatment is more likely to stay with that provider after the initial period if he or she is
highly satisfied with the care received from the provider.

Idaho, South Carolina, and Vermont are examples of states that allow the employer to
choose the physician in the workers’ comp context, while Delaware, Virginia, and Wisconsin
are examples of states where the employee has the right to choose his or her own
physician.14

Case Study: Provider Choice

State regulations on provider choice may impact care, or quality of care, given to individuals
entitled to workers’ comp. Take, for instance, Ms. Adams and Ms. Bart, each of whom
injured her right leg at work. Ms. Adams lives in State A, where her employer chooses the
physician, while Ms. Bart lives in State B, in which the employee is given the choice of
physician. Ms. Bart may be more likely to see an out-of-network provider initially because
she has more freedom to choose one.

Provider Requirements for a Workers' Compensation

Provider Requirements for a Workers' Comp Network

For a health plan, supplying a network of providers to furnish healthcare to workers’ comp
beneficiaries is not simply a matter of reapplying a network that has already been cr eated for
a group health plan. Some providers who are suitable for the health plan’s other networks
may not offer the specialized services required to treat workers’ comp patients. Others may
not understand the clinical practice guidelines for occupational illnesses or injuries. As a
result, the composition of a workers’ comp network is different from the composition of other

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networks. The providers in a workers’ comp network will also need a different set of
experiences and skills and a different approach to practicing medicine than providers in other
networks.

Examples of Clinical Guidelines

Some examples of clinical guidelines focused on occupational injury or illness in the context of
rotator cuff injuries include the following:

• Diagnosis of rotator cuff syndrome requires a thorough history-taking, which should

include the following factors and consideration of their implications: age, occupation
and sports participation, medical history, mechanism of injury, pain symptoms,
weakness and/or loss of range of motion (body function impairments), activity
limitations, and social situation.
• Assessment of rotator cuff syndrome requires physical examination which should
include direct observation of the shoulder and scapula, assessment of active and
passive range of motion, resisted (isometric) strength testing, and evaluation of the
cervical and thoracic spine (as indicated).15

Case Study: Provider Requirements

Dr. Margolis spent 10 years in the U.S. Army treating musculoskeletal injuries, including those
sustained in combat/active fire situations, before establishing himself in private practice.
About 70 percent of war rounds are musculoskeletal injuries, with about 7 percent of those
with major extremity wounds also sustaining a loss of limbs. Dr. Margolis’ experience in the
Army is readily transferrable to treating traumatic musculoskeletal injuries in the workplace,
such as where an employee’s leg is injured during a car crash while making a delivery. 16 By
contrast, Dr. Glassman’s experience as a pediatrician has not provided her with specific
experience that is relevant to the treatment of musculoskeletal injuries in the workplace.

Future of Primary Care

Except for specialty networks, most provider networks emphasize primary care (subject to
primary care availability, which is leading to some changes in the way that provider
networks are structured).

According to data published by the AAMC (Association of American Medical Colleges), the
United States could see a shortage of up to 120,000 physicians by 2030, impacting patient
care across the nation. Primary care is still a focus of most provider networks, given the
realities of treatment for most patients, but new structures have emerged to allow for
timely access to quality care in the face of this reality. An ongoing trend involves the use of
“narrow networks,” which include a lower number of overall providers. The use of
“telemedicine,” which involves the remote diagnosis and treatment of patients through
telecommunications technology, is another growing trend employed in building and
maintaining a provider network.

A smaller number of specialists generally are available on referral from the primary care
provider. The predominant types of treatment delivered to workers’ comp beneficiaries
differ significantly from the types of treatment most often furnished to other health plan
members. In workers’ comp, musculoskeletal injuries, such as sprains, strains, inflammation,

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contusions, cuts, punctures, and fractures, account for almost three-quarters of medical
expenses, compared to about 10% of medical expenses in other member populations. Minor
injuries also account for about 20% of workers’ comp claims but only 1% of other groups’
medical expenses.17 These conditions often require the immediate attention of medical
specialists such as orthopedic physicians or emergency physicians.

The extended rehabilitation associated with workplace injuries and illnesses also requires
the services of physical and occupational therapists and chiropractors. To meet these
patient needs, a network serving workers’ comp patients typically includes a higher
concentration of specialists than do other networks.

Nature of Work

The nature of the work done by the covered employee group also influences the
composition of the network. Workers in certain industries may be prone to certain types of
illness or injury. For example, coal miners and textile workers are more likely to suffer lung
ailments than are most other types of workers, so their managed comp networks need to
include an adequate number of pulmonologists.

In addition to basic credentials, health plans typically have additional training and experience
requirements for their workers’ comp providers. Health plans often look for the following
credentials in providers for workers’ comp networks:

• Training or certification in occupational medicine

• A minimum number of years of experience in occupational medicine
• A minimum percentage of the provider’s practice devoted to occupational
medicine

Example: The right specialist does not necessarily need to be local. Access to telemedicine
allows providers to give fast, personalized, and efficient treatment from anywhere.
Telemedicine was the subject of a standalone panel at the 2019 Workers’ Compensation
Research Institute’s Annual Issues and Research Conference, demonstrating its increasing
relevance in the context of developing an adequate workers’ comp provider network.

Workers’ Compensation Philosophy

Philosophy

Workers’ comp provides three distinct types of benefits:

1. Medical: this includes medical expenses resulting directly from the relevant injury
2. Indemnity: this includes wage loss resulting directly from the relevant injury
3. Death benefit: this includes expenses associated with a death resulting from a work-
related injury or illness. A typical death benefit would include coverage of funeral and
burial expenses or provision of financial support for the deceased’s family. In fact,
workers’ comp policies are usually required to include coverage for funeral and burial
costs

With workers’ comp, employers are interested in minimizing the total costs of work-related
injuries and illness, which are the sum of the medical and indemnity components of workers’

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comp. The introduction of managed care techniques has allowed workers’ comp plans over
the years to better control and even reduce medical costs. The costs associated with lost
wages, because they are driven by external environmental factors, are more difficult to
control. Therefore, the goal of most workers’ comp treatment decisions is to reduce disability
costs by returning employees to restored health and work as quickly as possible.

The Appropriate Philosophy

When building a network for workers’ comp, a health plan looks for providers who
understand that the approach to treating workers’ comp beneficiaries should focus on rapid
recovery rather than cost. This approach contrasts with the approach generally taken by
other health plan providers, who base their treatment selection on medical necessity and the
cost-effectiveness of the appropriate treatment options.

To achieve faster recoveries, workers’ comp providers often administer intensive, high-cost
care early in the treatment of the employee.

Example: Suppose that a health plan member suffering from back pain visits a physician. If
the treatment is covered by a standard health plan (not workers’ comp), the physician would
begin with conservative approaches to easing the back pain, such as bed rest, medication, or
physical therapy. If these approaches are not successful, the physician might later
recommend a brief course of physical therapy. After exhausting more conservative
approaches, the physician might order a costly diagnostic test, such as magnetic resonanc e
imaging (MRI), in order to determine the cause of the pain and develop the next phase of
treatment. Depending on the severity of the injury, the process can be quite lengthy.

On the other hand, if the treatment is covered by workers’ comp and the employee is missing
work because of the back pain, the physician would likely send the employee for an MRI
during the first stages of treatment. The physician can then select a treatment appropriate to
the cause and, hopefully, make sure that the employee returns to work quickly. Studies show
that more costs generally are allocated for radiology and physical therapy in the first three
months following an injury when the payment is through workers’ comp, as opposed to an
ordinary group health plan.18 The higher up-front cost associated with this more aggressive
approach is likely to be offset by savings in lost wages.

Workers’ Compensation and Disability

Integrated Disability Management

Because returning employees to work is so critical in workers’ comp, providers need to

have experience and expertise in determining whether employees are disabled from the
standpoint of being able to perform their work duties. In many situations, providers must
also be able to decide whether an employee who is not ready to return to his or her original
job can instead return to light duty. Light duty is work that is less physically demanding
than the employee’s original job. Many occupational medicine providers also have
expertise in determining disability status.

Health plans and many employers have begun to address disability issues by implementing
integrated disability management (IDM) programs that include guidelines on the expected
duration of various types of disabilities, clinical practice guidelines, return-to-work protocols,

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and guidelines for reducing the number of work-place accidents. Most employers, health
plans, and providers rely on disability duration guidelines to estimate how long an employee
will be absent from work. Integrated disability management programs require the
participation and cooperation of all the network’s providers.

Case Study: Integrated Disability Management

Ms. Carson is employed as the sole administrative assistant at TelCo, Inc., and a substantial
portion of her duties involve word processing and work on a computer. After years on the job,
Ms. Carson develops carpal tunnel syndrome, a condition that causes numbness, tingling and
other symptoms in the hand and arm due to compression of nerves in the carpal tunnel, a
narrow passageway on the palm side of the wrist. TelCo, Inc. has implemented an IDM
program, which states in relevant part that the duration of disability for carpal tunnel syndrome
should be approximately 7 weeks. Because this injury Bill directly affects Ms. Carson’s ability to
perform a major part of her job (word processing), the protocol requires her to return to work
on light duty until she has made a full recovery. TelCo., Inc. will likely hire a temporary
employee to assist with Ms. Carson’s workload throughout her planned recovery so that the
company can continue to function without overburdening Ms. Carson.

Interaction with Social Security Disability Benefits

Employees can file a claim for workers' comp and Social Security Disability (SSDI) benefits
simultaneously, but there are some important caveats.

First, workers’ comp and SSDI benefits are separate programs with different qualifications.
While workers’ comp programs vary from state to state, this kind of insurance generally is
designed to deliver temporary care, whereas SSDI benefits are more focused on long -term
care.19 Thus, generally, an employee will be approved for SSDI benefits only if his or her
impairment is severe and is expected to last a year or more, preventing the employee from
doing any kind of substantial work. The health care provider’s treatment plan for such an
employee obviously would differ from the kind of plan used where an employee’s injury can
be treated relatively quickly, to permit the employee to return expeditiously to the
workforce.

Further, while it is true that an individual can receive both workers’ comp and SSDI benefits
at the same time, claiming workers’ comp may reduce SSDI benefits. This is because the total
income received from workers compensation and SSDI cannot be more than 80% of the
employee’s previous income.

Reporting and Communication Capabilities

Providers with occupational medicine backgrounds should have experience generating the
reports that are required for workers’ comp. The state, the health plan, and the employer must
be kept apprised of the employee’s treatment and progress toward returning to work. Often
these reports must be in a specified format.

When deciding whether to include a provider in a workers’ comp network, a health plan must
consider whether the provider has the knowledge and information system capability to create

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the necessary reports. The health plan must also consider the provider’s skills at
communicating the employee’s status to the various interested parties. These parties may
include the employee, the employee’s supervisor and other representatives of the employer,
such as an occupational health nurse or disability case manager, representatives of the health
plan, and state authorities.

Required Reports

Physicians are required to complete various reports while treating a patient who has sustained
injuries on the job and is receiving workers’ comp benefits. One of these forms is the Progress
Report.

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Workers’ Compensation: Compensation Systems

Compensating Providers

Like other health plans, workers’ comp plans may use alternatives to the fee-for-service
compensation system to help control costs and to increase quality. Such compensation
systems include:

• Fee schedules: lists the maximum amounts that providers may provide for specific
healthcare services
• Discounted fee-for-service (DFFS): provider accepts a discount from his or her usual
rates or the state fee schedule
• Risk-sharing bonuses: provider is rewarded with additional funds (a bonus) based on
productivity
o Capitation payments are payments agreed upon by a health insurance
company and a medical provider. The payments are fixed and made on a pre-
arranged monthly basis to a physician, clinic, or hospital, per patient enrolled in
a health plan. The payments are made regardless of whether the patient
sought care
• Case rates: a form of risk-sharing, and are fixed, flat amounts arranged before an injury
arises
• Bonuses based on achieving certain outcomes

Fee Schedules and Discounted Fee-for-Service

Many states have tried to curb rising workers’ comp healthcare costs by instituting fee
schedules. Each fee schedule lists the maximum amounts that providers may charge for
specific healthcare services rendered under the state’s workers’ comp program.

Many health plans reimburse workers’ comp providers according to state workers’ comp fee
schedules or state schedules for Medicare and Medicaid. Fee schedules allow health plans to
regulate increases in medical care by limiting how much medical fees may increase each year.
They also ensure that the fees paid to various providers for workers’ comp benefits are
consistent.

As of 2007, all but eight (8) states had instituted fee schedules.

Other health plans may use discounted fee-for-service (DFFS) arrangements. Under a DFFS
agreement, the provider accepts a discount from his or her usual rates or the state fee
schedule. In return for this discount, the provider gains a potential increase in patient volume
from participation in the health plan’s workers’ comp network. The health plan may also pay
the provider a bonus if the provider meets certain cost-reduction goals for workers’ comp
cases.

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Sample Fee Schedule: Medicaid

Review the following Sample Fee Schedule for Medicaid it provides the Procedure Code,
Description, and Medicaid Fee.

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Risk-Sharing Arrangements

Some health plans use a modified form of capitation or some other risk-sharing
arrangement to compensate workers’ comp network providers. Case rates is one form of
risk-sharing compensation arrangement used under workers’ comp. For example, with case
rates, a provider would receive the same fee for each instance of carpal tunnel syndrome
treated.

In some cases, health plans capitate occupational health provider groups or clinics.
However, certain features of workers’ comp coverage tend to make capitation rates
difficult to establish:

• Difficulty in establishing actuarially sound capitation formulas

The variation in claims experience among different industries and occupational groups is
much greater in workers’ comp than in group health, making it difficult to determine
meaningful utilization averages.

• Exposure to higher levels of risk

Because of the long “tail” on workers’ comp claims, a workers’ comp claim can result in
treatment that continues for many years. 20 Workers’ comp provides benefits for a covered
medical condition for as long as the condition requires treatment. An employee who
changes jobs during treatment may be entitled to continued benefits even though he or
she is no longer an active employee or a member of the original employer’s group
healthcare plan. This contrasts sharply with the risks associated with treating isolated
disease episodes.

Because of these factors, capitation and other risk-sharing arrangements are used far less
frequently in managed workers’ comp than in other types of health plans.

Case Study: Capitation in Workers’ Comp and Elsewhere

Fred, the owner of a large furniture company, is in the market for a workers’ comp plan for his
employees in case anybody is hurt on the job. His broker provides him with a choice of plans
using either case rates or capitation. His personal insurance uses capitation, which is
convenient for him, as he frequently requires health care. This way, whether he visits a
medical provider once, twice, or seven times within a month, he is paying the same rate.
However, for someone who rarely needs to see a medical provider, Fred’s capitation payments
could be considered high.

Fred is aware that a workers’ comp plan using case rates for compensation would have a flat,
fixed rate for each different type of injury, only payable after an injury arises. Fred feels
confident that employee injury will be an infrequent problem, based on workplace history and
his knowledge and experience in the industry. Even though his personal insurance uses
capitation, he decides that using case rates would be a better choice for the workers’ comp
plan, because payment would only be required once there is an injury, as opposed to

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periodically, and there would be a set, agreed upon amount, with no need to negotiate each
time an employee requires workers’ comp.

Outcomes Bonuses

Some health plans give providers bonuses for achieving certain outcomes. For example, a
provider might receive an outcomes bonus if a specified percentage of injured workers
return to work in advance of or by their predetermined target dates. Target dates are set
according to established guidelines for the expected duration of different disabilities.

Tools to Manage Workers’ Comp Provider Performance

Tools to Manage Workers’ Comp Provider Performance

Although not all network management principles are applicable for use with workers’ comp
networks, some health plan concepts offer a clear potential to reduce costs and improve
quality. The tools that may be applied to workers’ comp networks include the following:

1. Case management
2. Clinical practice guidelines
3. Utilization review
4. Prevention programs

Case Management

Case managers for workers’ comp are generally registered nurses or physicians with
experience in occupational medicine or disability management. The case manager
coordinates the care furnished to the employee by various types of providers. The case
manager can improve the quality of care and facilitate the return-to-work process by
ensuring that the care provided is appropriate and by verifying that the care conforms to
available guidelines. The case manager can also reduce the overall costs of care by making
sure that the different providers furnish services that are complementary and non-
duplicative. The case manager can also discourage unnecessary care.

Clinical Practice Guidelines

Clinical practice guidelines are gaining increasing prominence in workers’ comp. Many states
have instituted or are creating mandatory workers’ comp guidelines. Workers’ comp plans
may also create or adopt their own guidelines, which help to ensure that employees receive
appropriate, evidence-based treatment and they discourage under- and overutilization.

Example: The American Academy of Orthopedic Surgeons (AAOS) has adopted clinical
practice guidelines in the area of diagnosis and treatment of carpal tunnel syndrome, which
is another type of injury that frequently appears in the workplace.

By way of example, one of the “Observation” clinical practice guidelines i n this area is as
follows: “Strong evidence supports Thenar atrophy is strongly associated with ruling-in
carpal tunnel syndrome, but purely associated with ruling-out carpal tunnel syndrome.”

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A clinical practice guideline in this area relating to “Physical Signs” is as follows: “Strong
evidence supports not using the Phalen Test, Tinel Sign, Flick Sign, or Upper limb
neurodynamic/nerve tension test (UNLT) criterion A/B as independent physical examination
maneuvers to diagnose carpal tunnel syndrome, because alone, each has a poor or weak
association with ruling-in or ruling-out carpal tunnel syndrome.”

Utilization Review (UR)

Utilization review is another tool that can be used in a workers’ comp setting to ensure that
employees are receiving quality, appropriate care and to identify instances of
overutilization. Health plans use utilization review results to educate providers concerning
improvements they can make in their practice patterns.

Preventive Care Initiatives

Like other health plan products, workers’ comp plans promote good health through
preventive care initiatives. Workers’ comp prevention initiatives often include these
following components:

• analysis of the work site for safety or health hazards

• injury-prevention programs
• programs to increase employee awareness of safety and health issues 21

Impact of the Affordable Care Act on Workers’ Compensation

Impact of the Affordable Care Act on Workers’ Compensation

The Patient Protection and Affordable Care Act of 2010 (also known as the Affordable Care
Act (ACA), Healthcare Reform, or Obamacare) has had a major impact on the health insurance
landscape. A recent study suggests that ACA’s coverage expansions may serve to broadly lower
costs in the workers’ comp system.

In a study conducted by the University of Pennsylvania and RAND, the following parameters
and results were examined:

• Study parameters: researchers examined ACA’s young adult dependent coverage

expansion to measure the effect of health coverage expansions on workers’ comp claim
frequency and severity.
• Study results: using millions of hospital records drawn from four large states –
California, Florida, New Jersey, and New York – with distinct workers’ comp systems,
researchers found that a 10-percentage point reduction in uninsurance rates in the
target population was associated with a 6% to 9% drop in workers’ comp bills. This
decrease was driven by harder-to-verify conditions, like strains and sprains, as well as
more expensive workers’ comp claims.

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Notes:

1 Christopher J. Boggs, Benefits Provided Under Workers’ Compensation Laws, Insurance Journal, March 23, 2015,
at 1-2; accessible at https://www.insurancejournal.com/blogs/acade my-journal/2015/03/23/360655.htm
(accessed May 2019).
2 Workers’ Compensation: Benefits, Coverage and Costs, October 2017, National Academy of Social Insurance,

Washington, DC, at 7.
3 Pamela B. Peele and David J. Tollerud, Managed Care in Workers’ Compensation Plans, Annu. Rev. Pub. Health,

2001, 22:1-13, at 1.
4 Edward J. Bernacki, MD, MPH & Shan P. Tsai, PhD, “Ten Years’ Experience Using an Integrated Workers’

Compensation Management System to Control Workers’ Compensation Costs,” 45 -5 J. O CCUPATIONAL & ENVTL . MED.
508, 2003,
https://journals.lww.com/joem/Abstract/2003/05000/Ten_Years__Experience_Using_an_Integrated_Workers_.11
.aspx; Case study: how Macy’s saved on workers’ compensation costs, 2018 Kaiser Permanente; available at
https://www.google.com/search?q=how+macy's+saved+on+workers+compensation+costs&rls=com.microsoft:en -
US:IE-Address&ie=UTF-8&oe=UTF-8&sourceid=ie7&rlz=1I7GUEA_enUS629&gws_rd=ssl (accessed May 2019).
5 Workers’ Compensation Managed Care: What Risk Managers Really Need to Know, January 2014, Lockton

Companies; available at https://www.lockton.com/whitepapers/Rosenblum_ Managed_Care_Jan14_Final.pdf

(accessed May 2019).
6 What is a Case Manager?, Case Management Society of America (2017), https://www.cmsa.org/who-we-

are/what-is-a-case-manager/.
7 Jackie Payne, Back to the Basics: Cost Control and the Role of Precertification and Utilization Review in Workers’

Compensation, MPower (Jun. 11, 2018), https://www.mpower.mitchell.com/precertification-utilization-review-

workers-compensation/.
8 See FALSE CLAIMS A CT, 31 U.S.C. §§ 3729-3733 (2006).
9 A Roadmap for New Physicians: Fraud & Abuse Laws, O FFICE OF INSPECTOR GENERAL , U.S. DEP ’T OF HEALTH & HUMAN

SERVS. (visited July 2019), https://oig.hhs.gov/compliance/physician-education/01laws.asp.

10 Workers’ Compensation: Benefits, Coverage and Costs, October 2017, National Academy of Social Insurance,

Washington, DC, at 5. Separate U.S. government programs cover federal civilian employees and workers in specific
high-risk occupations.
11 Workers’ compensation insurance is optional for employers in Texas. Construction companies on contract for

governmental entities, however, must have coverage.

12 Id. at 5, 7.
13 Christopher J. Boggs, Benefits Provided Under Workers’ Compensation Laws, Insurance Journal, March 23, 2015,

at 2; accessible at https://www.insurancejournal.com/blogs/academy-journal/2015/03/23/360655.htm (accessed

May 2019).
14 Fred L. Hubbs, Jr, Employee Rights on Initial Medical Treatment, USLAW (Hall Booth Smith, P.C., 2015),

http://www.uslaw.org/files/Compendiums2015/Employee%20Rights%20on%20Initial%20Medical%20Treatment/E
mployee%20Rights%20on%20Initial%20Medical%20Treatment%20Compendium%20of%20Law_2015.pdf.
15 Kate Hopman, et al, Clinical Practice Guidelines for the Management of Rotator Cuff Syndrome in the Workplace,

The University of New South Wales, Medicine, Rural Clinical School, Port Macquarie Campus, 2013; av ailable at
https://rcs.med.unsw.edu.au/sites/default/files/rcs/page/RotatorCuffSyndromeGuidelines.pdf
16 https://ota.org/education/patient-education/psas/military-and-civilian-medicine
17 SHERYL TATAR DACSO AND CLIFFORD C. DACSO, M.D., Health Plan Answer Book, 2nd ed. (New York: Panel

Publishers, 1997), 11-6.

18 John Robertson & Dan Corro, WORKERS COMPENSATION VS. GROUP HEALTH: A COMPARISON OF UTILIZATION 9

(NCCI Holdings, Inc., Nov. 2006).

19 Can I get Both Workers’ Comp and Social Security Disability?, Disability Benefits Center (2019),

https://www.disabilitybenefitscenter.org/faq/workers-compensation-and-social-security-disability.

22
 AHM 530: Provider Networks for Workers’ Compensation

19 How Workers’ Compensation and Other Disability Payments May Affect Your Benefits, SOCIAL SECURITY
A DMINISTRATION (July 2017), https://www.ssa.gov/pubs/EN-05-10018.pdf.
20 Gerry Dumke, “Managing Long-Tail Workers’ Compensation Claims,” Caitlin-Morgan (Mar. 14, 2017).
21 Michael B. Stack, “Develop an Injury Prevention Program to Reduce Workers’ Comp Costs,” Workers Comp

Resource Center, https://blog.reduceyourworkerscomp.com/2018/03/develop -injury-prevention-program-reduce-

workers-comp-costs/ (Mar. 22, 2018).

23