Many employers could be paying inflated costs because a majority are not fully aware of how their workers' compensation arrangements work with third party administrators or managed care organizations, according to a consulting firm.

"The fact that employers do not know if their TPAs or MCOs are paid on a percentage-of-savings basis or fee-for-network access is disturbing," said Susan S. Toussaint, president of Injury Management Partners. "This is a huge concern because some payment methodologies create misaligned incentives and actually drive up claim costs."

Injury Management Partners consulting firm, Palm Harbor, Fla. and Occupational Health and Safety Group Magazine of Chatsworth, Calif. reported that an online survey of 91 employers found 60 percent of them are unsure how their third-party administrators or managed care organizations were compensated for medical provider network development.

According to the poll there was even more ignorance about compensation arrangements for TPA and MCO bill review services, with 74 percent of employers saying they did not know what they were.

The survey team said the employers representing a variety of workers' compensation programs, participated in the survey, and 48 percent of them were self-insured.

Another concern was that more than half of the employers indicated that their TPA/MCO did not conduct injured worker satisfaction surveys, and 32 percent of the respondents were not sure.

"The industry forgets who the ultimate customer is," Ms. Toussaint said. "We spend millions of dollars trying to restore injured employees to health and full capacity, and we don't even ask them, 'How is this working for you?'"

The survey also probed injury management processes and learned that a little less than half of the respondents knew their physicians were committed to practicing evidence-based medicine.

The use of a post-offer, pre-placement medical screening prior to hiring employees was nearly 50-50 among respondents, and a full 82.9 percent had job descriptions specifying the physical demands and essential functions of the job.

According to the survey groups, the "best" survey news was that more than 56 percent of the companies said that injured employees returned to work, including modified duties, within four days. A large number, more than 78 percent, were found to have written and communicated return-to-work programs for injured workers.

"We believe that most of our readers have effective safety programs in place and are now focusing on new ways to reduce workers' compensation-related costs," said Susan Stilwill-Gentry, group publisher of Occupational Health & Safety. "This survey helps us identify areas that can be improved and to develop education and programs to help employers achieve their goals."

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Employers Found Ignorant On TPA, Care Group Pay

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