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Higher doctor fees may get injured workers back to work faster

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Some state workers compensation systems and payers are increasing provider payments to ensure that injured workers are treated quickly and effectively.

In North Carolina, increased provider reimbursements take effect in July and are designed to “cut down on treatment delays, allow injured workers to recover sooner and facilitate a safe return to work,” North Carolina Industrial Commission Chairman Andrew T. Heath said in an email.

Noting that both payers and injured workers had expressed concerns about access to care, Mr. Heath said delaying treatment often prolongs disability claims.

Under the new rule, maximum reimbursement rates for professional services are between 140% and 195% of the current Medicare base amount. The professional services fee schedule was previously based on the 1995 Medicare reimbursement rates, according to the commission.

Meanwhile, the Industrial Commission of Arizona recently proposed increasing reimbursements to health care providers an average of 4.54%, according to a WorkCompCentral analysis.

In January, the National Council on Compensation Insurance Inc. said potential changes to Florida's medical fee schedule, which include increasing medical costs related to physician payments by 2.6%, could increase its workers comp costs by $61 million.

Other states that are currently contemplating changes to medical benefit provisions include Indiana, Montana, New Hampshire, South Carolina, Utah and Virginia, said Raji Chadarevian, manager and associate actuary at Boca Raton, Florida-based NCCI.

While low fee schedules can reduce injured workers' access to care, the real gauge is how comp rates compare with Medicare and group health plans, said Joe Pagano, Norristown, Pennsylvania-based executive vice president of managed care services at Healthcare Solutions Inc.

In most states, the overall workers comp fee schedule rates for physician services are higher than Medicare rates by 30% or more, Dr. Rebecca Yang, senior public policy analyst at the Workers Compensation Research Institute said in an email. However, workers comp fee schedule rates for certain services in some states do fall below the Medicare rates, Dr. Yang added.

For example, of the 42 states that have workers comp fee schedules, seven states — including California, Florida and New York — have rates for office visits that are lower than the state's Medicare rates as of July 2011, she said, citing a WCRI study from June 2012.

“Across the board, workers compensation is a much better payer than group health,” said Joe Paduda, principal of Madison, Connecticut-based Health Strategy Associates L.L.C.

When fee schedules dip below Medicare or group health plan rates, providers no longer have a financial incentive to continue treating injured workers, sources said.

“Workers comp is a more complex, cumbersome and difficult process” for physicians, Mr. Paduda said. “There's a lot more paperwork. You have to deal with return-to-work (issues). You have to deal with employers.”

If states increase their fee schedules but the rates are just comparable to Medicare or group health plan rates, it might not greatly increase access to care, Mr. Pagano said. “If it's way above (those rates), it's obviously going to increase access to care because (doctors) are businesspeople as well.”

But fee schedules that reduce provider reimbursement rates may prompt physicians to increase the number of office visits to make up the revenue, said Mike Farrand, vice president of medical cost containment and director of workers compensation cost containment and area practice leader at Willis North America Inc. in Radnor, Pennsylvania.

For example, if physical therapists now get $30 per visit and they previously were paid $50, “they're going to make up their money,” Mr. Farrand said

In addition, preferred provider organization discounts that often are applied to fee schedule rates further lower reimbursements, said Darrell Brown, Long Beach, California-based chief performance officer at Sedgwick Claims Management Services Inc.

“We want really good medical outcomes, we want faster return to work, and sometimes that doesn't come at the cheapest price,” Mr. Brown said.

To maintain access to quality care, Sedgwick pays its highest-rated providers the maximum rates on fee schedules and does not apply PPO discounts, said Kimberly George, Chicago-based senior vice president and senior health care adviser.

Spreemo L.L.C., a managed care tool that connects payers such as Marriott International Inc. and CNA Financial Corp. with radiologists, also offers higher reimbursements — “maybe a 30% increase” — to providers who adhere to its quality guidelines, said Spreemo CEO Ron Vianu.

Mr. Vianu said most of the payers Spreemo works with are willing to spend more on quality radiologists to ensure that patients are diagnosed correctly and promptly so they can get the most appropriate care.

“Their ultimate goal is getting (their employees) better and back to work, and they understand that better physicians may be more capable of doing that,” Mr. Vianu said.

Instead of looking to see if a provider has decreased medical costs, “which they may have done correctly or not,” or decreased disability time, “which could be manipulated,” payers should focus on the quality of care, said Dr. Kathryn Mueller, medical director for the Colorado Division of Workers' Compensation, president of the American College of Occupational and Environmental Medicine, and a professor at the University of Colorado Denver's Anschutz Medical Campus.

Payers could reward providers who operate under evidence-based guidelines and whose requests are almost always approved by not conducting unnecessary utilization reviews, Dr. Mueller said.

“That's a reward that gets money back into the system where it should be,” he added.

A best practice for payers concerned about limited access to care is developing partnerships with quality medical providers.

“Often I see a situation where there's a manufacturing facility. It's in a rural area. You have one doctor in town. And the client says the doctor never releases anybody to return to work,” Mr. Farrand said. “I ask, 'Have you talked to the doctor? Have you had them out (to the facility)?'”

Developing a relationship with the physician can speed return-to-work decisions since the doctor is better informed about the skills needed at a particular business, he said.

Establishing a relationship with quality medical providers is essential, Mr. Paduda said.

“That involves directing their injured workers to them, not requiring all kinds of utilization review, paying bills promptly, paying them fairly, maybe paying them above the fee schedule,” he said.

In return, payers can demand rapid communication, no physician-dispensed drugs and that providers facilitate the return-to-work process by releasing workers to appropriate light-duty jobs.