Medical provider networks can help reduce medical costs for workers compensation claims when employers work with doctors to ensure that workers receive appropriate care, experts say.

The key is communicating with physicians about how employees should be treated under workers comp-related care, compared with treatment under a group health medicine model, said Paul Braun, managing director of casualty claims for Aon Global Risk Consulting in Los Angeles.

“By everyone knowing what the objective is and working together, you're going to get a better outcome rather than just going down the street to a family physician,” he said.

Most medical networks formed by insurers and third-party administrators typically are based on assembling a group of doctors who agree to charge discounted rates in exchange for receiving business from employers who send their injured workers exclusively to network physicians, said Mark Walls, St. Louis-based senior vice president and workers compensation market research leader at Marsh Inc.

“They're very much focused on penetration and discount,” said Mr. Walls, who called networks an “essential component” of successful workers comp programs.

Some networks also are comprised of doctors that have been recognized for better-than-average outcomes in treating occupational injuries.

Harbor Health Systems L.L.C. is an Irvine, Calif., company that manages and assembles outcome-based provider networks nationwide. President Greg Moore said some models managed by his company include a structure where doctors who provide the best care are asked to take less of a discount than peer physicians, or can sometimes see their discount eliminated.

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The incentive of providing full-price payments to top doctors has helped Harbor Health networks to see cost savings of 16% to 26% on long-term workers comp claims, Mr. Moore said.

“We are very happy to pay somebody full-fee schedule when they're working well with us … and providing the kind of care that we know will cure the patient population more efficiently and effectively,” he said.

There can be challenges to working with networks. For instance, networks can sometimes provide a limited choice of physicians for employers in rural locations, said Mike Farrand, Radnor, Pa.-based vice president of Willis North America's risk control and claim advocacy practice and national technical director of Willis' workers compensation cost containment practice.

It can also be difficult to get top doctors to join a network and accept discounted fees if they are already seeing sufficient workers comp business, Mr. Farrand said.

“They don't want to take the discount because they know they're the only game in town that does workers comp sometimes,” Mr. Farrand said.

Sources say it's important to ask insurers and TPAs about outcome averages for their network providers. Marsh's Mr. Walls believes that such information can be difficult to come by, as many networks demonstrate their effectiveness based on a reduction in medical costs rather than return-to-work times or claim durations.

Additionally, Mr. Walls said that some network physicians could try to make up for discounted fees by scheduling patients for additional appointments and treatments.

“The savings are really defeated if you're not closely monitoring the utilization that goes along with it,” Mr. Walls said.

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Companies can take several steps to ensure that their employees are getting effective care from network providers while maximizing network discounts, sources say.

Willis' Mr. Farrand said doctors that regularly treat an employer's injured workers should be invited to visit the company's facility and learn about the company's job functions. That can help doctors learn how to best treat employees who come to them, he said.

“Let them see what you do as a business, have them sit in on a safety committee meeting,” Mr. Farrand said.

Conversely, Aon's Mr. Braun said employers should visit treatment facilities where they regularly send injured workers for care. This can help employers learn whether employees are visiting physicians that will handle their injuries promptly and effectively — key components in keeping workers well and helping to avoid litigation, Mr. Braun said.

“You can't visit every (facility), but you can certainly visit the one that the primary group of employees is going to and see what it's like,” he said. “Find out if you'd want to be treated there.”

Messrs. Braun and Farrand recommend providing doctors with information about employees' job responsibilities, as well as types of modified duties that the company provides for injured workers. This can include giving the employee a document that details his or her job duties and can be brought to the worker's initial appointment with a treating physician.

That information can allow doctors to provide treatment that helps the worker to return to work, Mr. Farrand said.

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“They do need to understand that the employers are providing a light-duty position for them, so you don't want them to just say (the worker is) totally disabled,” he said.

Companies that are deciding whether to join a network should work with their nurse case managers and claims adjusters to evaluate network physicians who would be most likely to treat the company's injured workers, Marsh's Mr. Walls said.

Since claims handlers typically become familiar with doctors via various cases, they can usually assess whether certain doctors in a network will properly treat employees, Mr. Walls said.

“If suddenly you start seeing a lot of physicians and providers in the network that you're not comfortable with, it's probably not a network you should be utilizing,” he said.