Texas Tries To Lasso Workers' Comp Costs

A novel medical network concept and a host of other changes are slated for the Texas workers compensation market as the state launches the biggest revision to the system in a decade, insurers and state officials said.

The recently enacted law, these sources explained, includes a beefed up monitoring effort designed to put a halter on record breaking medical costs, as well as improving the sort of care that is delivered.

Action to carry out the various provisions of HB 2600, which took effect on June 17, is expected to take from two-to-four years. State Rep. Kenneth “Kim” Brimer, R-Fort Worth, the key sponsor of the omnibus measure, said he is “hoping to see 15 percent savings as these laws go into effect.”

Mr. Brimer said the process of hammering out the new law involved 120 hours of negotiations with as many as 40 different stakeholders taking part, including representatives of labor, the business community, doctors and insurance carriers.

Before drafting legislation, the state paid over $1 million for a careful study of the system that showed where the problems were, Mr. Brimer noted. It included a rundown on high costs for elements such as back surgery, pharmaceuticals and chiropractic medicine.

Among the key elements of the new law are provisions to upgrade doctor monitoring, improve communication with workers on return-to-work issues, boost medical dispute resolution, and change fee and treatment guidelines to base them on Medicare reimbursement methodology.

However, the most “novel approach to medical cost control” is a provision for the state to set up its own medical treatment network, according to David Anderson, vice president and assistant director for workers' comp and health at the Downer's Grove, Ill.-based Alliance of American Insurers.

As outlined by the Texas Research and Oversight Council on Workers' Compensation, creation of any regional healthcare delivery networks would be proceeded by a feasibility study and the naming of a governor-appointed Health Care Network Advisory Committee to set standards for any new network. The committee is due to hold its first meeting by Oct. 1. Its membership is to include voting members representing business and labor, and non-voting members from the insurance and health care industries.

If the network scheme is found to be viable, the first one is due to be created by Dec. 31, 2002, with one or more additional networks added each year in large metropolitan areas where it would be feasible to operate them.

The workers who choose care under the proposed network system could still make their own choice of doctor, but would have to pick one from a network list. Besides data about the networks performance, employees who used it would get a financial sweetener–temporary income benefit maximums would be raised 50 percent, and benefits would be received for the first week of lost time after two weeks rather than after four weeks of lost time.

If a network is created in a region, carriers can participate at their option. The law provides that networks operated by private carriers could continue as long as they meet the same minimum standards set for state operations.

“Were grateful they didnt unduly restrict the industrys own use of managed care networks. Its important that, as the state goes forward, they not mess up what was already there,” said Mr. Anderson. Texas, he noted, leaves the choice of medical care with the employee.

Studies have shown that the cost of providing treatment for injured employees through the Texas workers comp system are 20-to-200 percent higher than other states, according to Scott McNally, executive director of the Research and Oversight Council on Workers' Compensation, an Austin-based state agency that monitors and assesses the effectiveness of the Texas workers' comp system.

Mr. McNally said workers comp claimants in Texas tended to have a higher incidence of surgery and have a longer duration of medical treatment than in other states. Although some point to a higher number of patients being treated by chiropractors in Texas as a cost factor, Mr. McNally said that the type of doctors “who dont seem to get people back to work falls into all different categories of medicine.”

He said that on the cost-control front, carriers are lacking in consistency in medical management and are “all over the board as to what they will approve and when they will approve.”

To bring consistency to medical costs and create quality control, the new law creates the job of medical advisor for the Texas Workers Compensation Commission. In doing so, it formalizes the post held by Dr. William Nemeth, an orthopedic surgeon hired by the TWCC a year ago to advise them.

The new statute creates a Medical Quality Review Panel of doctors to assist the advisor. The TWCC is required to develop rules for training and quality-of-care monitoring for doctors in the system, and set sanctions for doctors or insurers who violate its new rules. A registration process for doctors will be established to help manage the system's Approved Doctors List.

The TWCC is also required to collect information on return-to-work outcomes, patient satisfaction, and the cost and utilization of health care for use in monitoring medical care.

Rep. Brimer noted that surveys found that Texas workers, even though they were treated longer and their medical costs were higher than other states, “were still not satisfied with the remedy they had in the system.”

Now, despite the legislative revisions to the system, arguments are expected in another forum as the TWCC begins holding hearings on directives to implement the new law. “The rulemaking process promises to be one of competing interests working to shape the new rules,” said Steve Nichols, workers comp service manager for the Insurance Council of Texas in Austin.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 27, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

Contact Webmaster

Special Reports /

Texas Tries To Lasso Workers' Comp Costs

Related Stories

Recommended For You