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PPOs for workers comp coming to Illinois

Posted On: Oct. 9, 2011 12:00 AM CST

SPRINGFIELD, Ill.—Illinois could start rolling out preferred provider organizations for workers compensation care early next year as the state implements reforms passed during the spring.

The Illinois Department of Insurance is finalizing its workers comp network program, such as provider network rules, said Mark Denzler, a member of the state Workers' Compensation Advisory Board.

The state is expected to clarify those issues in the coming weeks, with networks starting operations as soon as January.

“You already use networks for health insurance, so you're not necessarily starting from scratch,” said Mr. Denzler, who also is vp of government affairs and chief operating officer of the Illinois Manufacturers' Assn. in Springfield.

Illinois' workers comp reform bill, passed in June, allows employers to use specialized PPOs for workers comp care.

The networks, which need approval from the state Department of Insurance, aim to lower workers comp costs by directing injured employees to providers who specialize in such claims. In turn, the networks are intended to lower costs by improving care and helping employees return to work faster.

Illinois had not approved any workers comp networks as of last week.

In a statement, the department said it has held a series of meetings with providers, networks, employers, insurers and other stakeholders in workers comp reform.

The department is using feedback from those meetings to develop fact sheets and revise Illinois' requirements for provider networks.

Mr. Denzler said he believes the networks are a critical element of workers comp reform for Illinois employers.

“We think (there) will be a significant reduction in costs for the employers while making sure employees have access to quality health care,” he said.

Jay Shattuck, executive director of the Illinois Chamber of Commerce's Employment Law Council, said network approvals could extend into the first quarter next year.

“I think it's going to be an education process on behalf of employers to ensure to their workforce” that the networks will provide quality care and that medical providers “are looking out for the best interest of the employees as well as they employer,” he said.

Kimberly George, senior vp of the managed care practice and client services for Sedgwick Claims Management Services Inc., said the third-party administrator plans to apply for network status once Illinois irons out its application process.

“We would be ready to go live sooner, but we understand that there are some complexities,” Ms. George said.

Sedgwick plans to select providers for its network that have a history of favorable return-to-work outcomes, among other criteria. Ms. George said the company is talking with providers now, because many are concerned about a 30% reduction in the state's medical fee schedule as part of the workers comp reform legislation.

She expects competition for workers comp networks will come from companies that already have PPOs in Illinois. “The networks that exist today will exist tomorrow in 2012,” she said. “There may be a couple new solutions that come in the market, but I don't know that it will significantly change.”