Window of opportunity: from May 5 to May 30, Ohio employers can save money during MCO open...

[ILLUSTRATION OMITTED]

Every two years in Ohio, employers have a window of opportunity in which to make a choice regarding who handles their workers' compensation claims: either keep their current managed care organization, or toss that MCO out while the window remains briefly open.

This time around, that window opens May 5 to May 30, also the only period during which employers can receive multiple marketing pitches and decide whether to engage a new MCO or keep the current. New-to-Ohio employers also have a choice; either choose an MCO themselves or the Ohio Bureau of Workers' Compensation will do it for them.

But how are employers to make that choice and why shouldn't they just default to either keeping who they have or, in the case of new employers, letting the bureau assign an MCO for them?

Well, for one thing, paying premiums to the BWC (who pays the MCOs) is an expense for the employer. So taking this time to assess the performance of your MCO represents "an opportunity to assess this bottom line issue," says Joel Donchess, director of managed care operations at BWC.

"If MCOs do a good job and get workers rehabbed and back to work quickly, they can help reduce the employer's premium," Donchess says.

Typically, not a lot of employers do make a change. Last open enrollment period about 10 percent of employers switched, according to Donchess. But that doesn't mean employers shouldn't delve into it.

[ILLUSTRATIONS OMITTED]

"This is an opportunity for employers to evaluate the quality of service they are receiving from their current MCO, and to research and analyze other MCO options," says Richard J. Poach, president and chief operating officer of CareWorks. "How well a MCO consistently achieves successful return to work should be a primary concern in deciding whether to maintain the current MCO or select a new one."

"An employer should evaluate whether they are where they want to be in terms of Workers' Compensation premium," says Joe Mercurio, vice president of regional accounts at 3-Hab. "An MCO's performance in facilitating safe release or return to work for Ohio employers is going to directly impact their out of pocket expense.

"Unnecessary lost time claims, delays in treatment, and unnecessary appeals can negatively impact an employers' experience," Mercurio says. "In Ohio, an employer's experience is impacted by the oldest four of the last five years' claims activity--therefore if a claim is handled inappropriately, it can impact premium costs for four years."

The open enrollment period is the best time for employers to do their homework on MCOs because "once you've elected your MCO, for better or for worse, when that injury happens, it's too late, you're stuck," says John B. Dumas III, vice president at Sheakley UniComp.

Yes, once that claim comes in, but actually employers do have an out if they need one outside of the open enrollment period, but it doesn't happen often, Donchess says. If an employer becomes dissatisfied with its MCO in the two years between open enrollment periods, it can make a complaint to the bureau to pursue an MCO change.

That's a little-known fact that most MCOs won't be willing to advertise, but Deborah Curry does on behalf of her MCO, Mercy Work Solutions Inc. Curry virtually guarantees her employer clients won't need that escape plan.

"We tell (employers), 'If what I'm telling you is not true (of the service we'll provide), you can ask for a release,'" says Curry, who adds, "Even if (employers) don't choose to switch MCOs, they should at least expect more out of their current MCO."

COMMUNICATION IS KEY

Curry also advises giving the current MCO a chance to respond to the questions employers would ask of prospective MCOs. Among the questions she'd ask is who performs your services? Do you outsource any of it, such as the billing or the case management?

"Communication is key," Curry says of optimal MCO service.

"Is the MCO communicating with the injured worker's provider on medical requests?" Mercurio adds. "Communication should not be limited to a call notifying the provider of a decision--the MCO should be working with the provider to understand why certain services are deemed necessary before rendering a treatment determination.

"This will alleviate some of the antagonistic views providers may have in dealing with Workers' Compensation and eliminate unnecessary appeals for inappropriate denials due to a misunderstanding," Mercurio says. "Communication is key in achieving a successful return to work without unnecessary procedural delays."

Mercurio says it is important to ask who at the MCO is communicating with the provider? Is the MCO utilizing nurse case managers, physicians, non-clinicians, or administrative staff to complete treatment negotiations? He adds that "it is vital to work with the providers to develop a unique treatment plan with reasonable and obtainable goals for developing optimal release/return to work strategies which are measured by BWC."

THE MCO REPORT CARD

To help employers make their choice, each year the BWC issues a report card evaluating the performance of the state's 24 MCOs. The report card, due by the end of April, lists all of the MCOs and the number of employers and claims they service; it also shows the efficiency each MCO has had in reporting injuries and submitting claims, which can affect the rate at which the injured worker can get treatment and return to work.

The report card also reflects the DoDM (degree of disability management), shown on a bar scale to indicate how well the MCOs manage the return-to-work objective. This measure takes into account the injury and the kind of work the person does and then adjusts the expectations accordingly. For instance, a broken arm for someone in the construction field would require more time off than for someone at a desk job.

"THE BIG 3"

To control employer's premiums, the BWC focuses on what it calls "The Big Three": frequency, severity and lag time. Frequency is the total number of claims filed against an employer's risk in a given measurement period.

MCOs can impact both severity and lag time, Donchess says. Severity measures how long an injured worker is off work and lag time is the time between when an injury happens and when it's reported to the Bureau.

The way premiums are levied begins with the way employers classify their workers. Each employer reports their employees based on manual classifications, meaning the type of workers they have (trucker, clerical, carpenter, etc.). The bureau has a base rate for each of those manual classifications, Donchess says.

"If the employer has a good experience (no or few injuries) compared to others in the manual classification, he is merit-rated and has a lower premium," Donchess says. "If his experience is worse than his peers, he is experience-rated and can expect a higher premium than his peers."

[ILLUSTRATION OMITTED]

CLUES TO SERVICE

Beyond the performance statistics, MCOs give other clues to the level of service they'll provide, according to Michael Pulsfort, senior account executive with Health Management Solutions.

"How easy is it to get in touch with someone when you call in?" Pulsfort says. "Do you have somebody you trust working on your claims, somebody who knows the ins and outs of your business?"

Given some 280,000 employers in the state, with varying businesses from office environments to steel factories and agricultural work, "there are so many different variables that you want someone who really knows your claims," Pulsfort says.

Other service indicators may include whether or not the MCO has a medical director accessible to the employers (and not just the claims staff). Sheakley offers custom reports that identify trends in their employers' injuries with the aim of addressing safety problems and preventing further injuries. It also offers job-site therapy for injured workers.

"It really is a question of customer service," Poach maintains.

The questions he'd pose of an MCO include: Does the MCO dedicate unique staff to an employer's account? Does the MCO support and facilitate early return to work strategies? Does the MCO provide comprehensive claim and bill payment history reports? Does the MCO make on-site visits? Will the MCO customize its services to work with an employer?

"And, how well does the MCO deliver the critical communication among employer, healthcare provider, TPA and BWC to achieve positive, healthy claim outcomes?" Poach continues.

Mercurio adds that managed care organizations should be: acting as a liaison ensuring all parties of the claim understand the clinical rationale for treatment reimbursement decisions; working with HPP-certified providers to facilitate prompt, accurate payment while continuously looking to expand the HPP provider network by enrolling willing providers; and explaining the various options available to Ohio employers, many of which can result in a reduction in premium for participation.

"Employers should have a general idea about what type of service they need and communicate that to the MCO," Mercurio says. "For example, employers may need (request) biweekly or monthly staffing, on-site training, or specific tracking and reporting requirements.

"Their selection of an MCO should consider first the historical ability of that MCO to obtain their primary objective--returning employees to work, then which MCO is able to accommodate requests outside the scope of what is required or measured by the Ohio Bureau of Workers' Compensation," he continues. "To keep it simply for Ohio employers, the primary responsibility of any MCO (to the employer) is to return employees to work. The only Bureau measurement capturing this data is published on the report card under Degree of Disability Management. This is where MCOs have the ability to reduce (or increase) out of pocket expenses depending on their performance."

KNOW YOUR TPA

Employers might get their MCO recommendations from their third party administrator (TPA). Unlike the MCO, which is contracted by the government as an arm of the BWC, the TPA is an arm of employers' HR departments, typically, and paid by the employer.

TPAs manage the legal ramifications of claims and create group rating plans that provide premium discounts for companies. Trade organizations and chambers of commerce are typical sponsors of group rating programs.

Group rating lets employers in the same or similar industries pool together their claims experience to affect their rating. As a group, the pooled companies with positive claims experiences will get a better rate than they could have as individual companies. The system was designed as an incentive for promoting and rewarding safe working environments.

On the legal side, TPAs provide risk management advice, litigate injury claims the employers believe to be unwarranted, and works with MCOs in getting injured workers back to work. Although MCOs and TPAs work together, and some are affiliated through parent companies, a firewall exists between them ensuring they operate separately, according to BWC rules.

WHERE IT ALL BEGAN

The Health Partnership Program, which ushered in the use of MCOs in the mid-90s, has been "a hugely successful program that has saved the workers comp program nearly half a billion dollars," says George Smith, director of the MCO League of Ohio.

YOU'RE #1? PROVE IT!

[ILLUSTRATION OMITTED]

Employers on the receiving end of numerous marketing pitches may have noted a pattern in past open enrollment periods: A preponderance of "we're number 1" claims by the managed care organizations (MCOs) advertising themselves.

How is that possible? How can all 24 MCOs be No. 1?

The Bureau of Workers' Compensation (BWC) thought of those questions and requires MCOs to specify the measure and time frame for which they earned a number one spot.

"They're not allowed to make broad generalizations," says Joel Donchess, director of managed care operations at BWC.

BASIC SERVICES REQUIRED OF ALL MCOs

[ILLUSTRATION OMITTED]

Managed Care Organizations (MCOs) provide a number of services, all to assist Ohio employers and their injured employees with workplace injury claims, says Richard J. Poach, president and chief operating officer of CareWorks. The core MCO functions include:

* collecting initial injury reports

* management of any medical treatment received by injured workers

* treatment authorizations

* medical review and bill payment

* accessing provider networks

* return to work services

* utilization review

* processing treatment appeals

* training and education

There also are a number of customer service and communication functions MCOs provide that are essential to delivering the timely and appropriate medical care necessary to reach healthy and successful claim outcomes.

THE TPA ROLE

Third party administrators (TPAs) are responsible for:

* Hearing representation--TPAs are a party to the claim and available to attend hearings to represent the employer

* Claims administration--assistance in determining compensation and ensuring timely resolution

* Actuarial analysis

* Group rating programs

Source: Ohio Employee Health Partnership

THE BWC ROLE

When an injury occurs, the Ohio Bureau of Workers' Compensation (BWC) is responsible for:

* Assignment of claim numbers

* Determination of allowed conditions

* Paying compensation

* Identification of fraud

* Education of injured workers, employers and health-care providers about HPP (Health Partnership Program)

HELPFUL WEBSITES

BWC Website

www.ohiobwc.com

BWC 2007 Annual Report

www.ohiobwc.com/downloads/blankpdf/AnnualReport.pdf