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Medical provider networks losing their luster for payers of comp claims

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The majority of California workers compensation physicians are now part of medical provider networks, but the benefits to payers — whether insurers or self-insured employers — using such networks have diminished over time, the California Workers’ Compensation Institute said.

From before medical provider networks were introduced to the time they were fully implemented, the use of network physicians to treat injured workers increased from 55% of all claims to about 80% of all claims, the Oakland, California-based CWCI said in a report released Tuesday.

The report, which measures the effect of medical provider networks in the California workers comp system, was compiled using more than 1.8 million claims from accident year 2000 through June 2011, the institute said in a statement.

The preferred provider organization period spanned accident year 2000 to 2002; the medical provider network transition period took place during accident year 2003 to 2007; and the full medical provider network period spanned accident year 2008 through June 2011, CWCI said in the statement.

While the report found that network indemnity claims had a lower attorney involvement rate than non-network claims, the involvement rate rose over time, increasing from 38% in the PPO period to 45% in the full medical provider network period.

The report also found that network claims had higher claim closure rates. However, for network claims at 12 months post-injury, claim closure rates decreased from 73% in the PPO period to 61% in the full medical provider network period, according to the report.

Opioids on the rise

Alongside these trends, the percentage of claims with opioid prescriptions also is on the rise, the report states.

Network indemnity claims with at least one opioid prescription increased from 39% in the PPO period to 55% percent in the full medical provider networks period, according to the report.

“Overall medical cost savings associated with network-managed claims have dwindled,” the CWCI said in the statement. “Despite the reduction in cost savings associated with network managed claims overall, the study did find considerable variation among individual networks in the study sample, with just as many networks generating lower costs per claim as higher costs per claim when their results were compared to those of claims with non-network (primary treating physicians).”

In California and other states, the use of medical networks to treat injured workers has grown in the last 20 years, the report states. With that growth comes “the need to understand the impact of networks on workers compensation medical utilization and costs, other benefit costs, disability outcomes and patient satisfaction,” according to the report.