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WCIRB Study Links Treatment Delays to Higher Claim Costs

  • State: California
  • Topic: Top
  • - Popular with: Legal
A recent study by the Workers’ Compensation Insurance Rating Bureau of California found that c…

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Steve Cattolica Nov 18, 2020 a 8:11 am PST

There is no question speedy care is critical, but effective care is equally important. Fee schedule savings and denied care are often the only index of savings. Value based care and shared responsibility are rarely a part of this conversation that must occur.

A value-based delivery system considers the effectiveness of the treatment provided and totality of savings, not just what is saved from fee schedule discounts and misplaced throttling of services via UR. Most networks, particularly those specializing in delivery of what might be considered "ancillary services," are paid based on how much is saved below the fee schedule and they crank down contracted provider rates to fatten their own bottom lines. These networks appear to deliver great "savings" but aren’t willing to be remunerated based on overall claims cost savings which considers, among other factors, how proper care can lower temporary disability costs because the injured worker gets back to work rather than staying out due to the network’s ineffective care. Episodic savings below fee schedule is their only metric. To these networks, ineffective care at dirt-cheap rates equate to “savings.” Their field of vision is short term, episodic and not oriented to partnering based on injured worker recovery and total claim cost savings. Network revenue depends highly upon "through-put" of services. More services, more discounts, more revenue. This is one of the major contributors to what one highly respected employer representative told me was the 54% of each premium dollar going to costs rather than benefits. A value-based model rewards the injured worker, the employer and the medical provider team based on overall costs of the claim, not how cheap the care can be delivered. This is not a futuristic ideal, these programs already exist.

Tom Martin Nov 18, 2020 a 9:11 am PST

UR/IMR is a failed experiment in desperate need of reform. Injured worker's recoveries are delayed. Businesses lose productivity while they wait for their employee to return to work. TTD is needlessly prolonged. Businesses pay more for coverage because claims are open longer. PD outcomes are worse.

If these massive losses were quantified, California businesses would be joining injured workers in the demand for reform. Unfortunately, there is no study that shines daylight on these realities.

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