Worker's Compensation ReformSB 899/227/228/749

Presented by

Mike Cohen MDSutter Health @ Work

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Overview

• Employer pays first $10K of delayed claims

• Employees can not pre-designate Chiropractors

• Apportionment now applies to CAUSATION

• Employers required to have Utilization Review

• ACOEM Guidelines are presumed correct for ALL dates of injury

• Permanent Disability (PD) Rating per AMA Guidelines 1-1-05

• Pharmacy Fee Schedule is Medi-Cal

• Outpatient Surgery Fee schedule reimbursement @ 120% Medicare

• Employer with MPN has lifetime medical control 1-1-05

• Employer entitled Diagnosis and Work Status HIPAA does NOT

apply to WC

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Agenda

I.Background

II. Medical Provider Network (MPN) Vision

III. Creating an MPN

IV. MPN Value

V. Key Dates

VI. Summary

VII. Questions and Answers

Appendix A – MPN Provider Requirements

Appendix B – Contact Information

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SB 899 is a comprehensive bill designed to tackle many of the cost drivers behind rising Workers’ Compensation costs in California.

SB 899 is a comprehensive bill designed to tackle many of the cost drivers behind rising Workers’ Compensation costs in California.

To reduce the cost of Workers’ Compensation injuries, SB 899:

» Provides incentives to employers who offer return to work programs.

» Redesigns the legal process for resolving disputed claims.

» Reduces benefits for minor permanent disabilities.

» Limits employer liabilities to the portion of injury caused by work.

» Authorizes Employers to establish an MPN. An MPN is defined as:

» A network of providers able to provide all the necessary goods and services to “cure and relieve” the effects of an industrial injury.

» A network with providers selected by employers or insurers.

» Employees will be limited to seeing only providers in their employers’ MPN.

I. BackgroundIntroduction to SB 899

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I. BackgroundCompetitive Response

Worker’s Compensation costs rising exponentially

Loss of competitiveness in WC insurers due to bankruptcies and withdrawals

SCIF now dominates market with 60% share

Employers downsizing, relocating, outsourcing

Pre-SB 899 system rewards over-utilization, fraud and inflated disability

Post SB 899 puts Employer on equal footing with vested interests

An MPN has strategic value to Employer. MPN Defends against excessive medical utilization and promotes best

outcomes to lower cost.

An MPN has strategic value to Employer. MPN Defends against excessive medical utilization and promotes best

outcomes to lower cost.

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Sutter MPN provides an integrated care network and cost savings.Sutter MPN provides an integrated care network and cost savings.

Satisfies legal requirements for insurer or employer MPN.

Delivers quality care to employees.

No cost to Employer

No Discount to Provider

Provides cost savings over the alternative of purchasing access to another MPN

» Fewer lost work days Fewer provider visits

» Lower UR Costs Lower Case Management Cost

» Lower PD Lower Premiums

By not requiring provider discounts, the MPN will:

» Retain quality providers incentivized to deliver premier medical care.

» Facilitate Employee access to specialists

» Close claims FASTER.

I. BackgroundSutter MPN Attributes

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Each Employer could develop its own MPN; however, there are significant cost and operational advantages to a single MPN.

Each Employer could develop its own MPN; however, there are significant cost and operational advantages to a single MPN.

Sutter MPN has capacity and resources to provide all the necessary goods and services to “cure and relieve” from the effects of an industrial injury

MPNs must be approved by the Administrative Director of the Division of Workers’ Compensation; a single MPN affords significant administrative savings.

Sutter MPN provides software able to follow claim progress through MPN and report to Employer and Insurer.

Sutter MPN is equipped to provide the full complement of care.

Employees will have a greater geographic choice in Sutter MPN.

Sutter will serve regional employers with a centralized MPN.

I. BackgroundIntegrated MPN Advantages

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Create a tightly managed alliance of physicians who are skilled in aggressively treating the Workers’ Compensation population in a

manner that minimizes the costs of medical claims and lost work days.

Create a tightly managed alliance of physicians who are skilled in aggressively treating the Workers’ Compensation population in a

manner that minimizes the costs of medical claims and lost work days.

Create an integrated, high-quality care delivery network for Employers/employees.

Provide effective medical care and case management.

Lower employer costs through aggressive injury management.

Defend Employer against litigation and labor issues.

II. MPN Vision

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Sutter’s MPN will ensure Employer post SB 899 Workers’ Compensation market stability

Sutter’s MPN will ensure Employer post SB 899 Workers’ Compensation market stability

As SB 899 reads, only HCOs, HMOs, and group health insurers are automatically approved as MPNs .

Employers and insurers are being allowed to create MPNs.

As a result of the confusion created by this legislation, several outcomes are expected:

» Most employers recognize the effort required to create and manage an MPN and would rather not do it themselves.

» Insurance companies will charge employers $$ for the service.

» Many employers and providers will be left scrambling to enter into MPN contracts.

II. MPN VisionFirst-Mover Advantages

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While the provision for MPNs does not take effect until January 1, 2005, the MPN must be submitted for approval by November 11,

2004 and must meet the following requirements:

While the provision for MPNs does not take effect until January 1, 2005, the MPN must be submitted for approval by November 11,

2004 and must meet the following requirements:

75% of MDs must be primarily engaged in treatment of occupational injuries.

25% of MDs must be engaged in treatment of nonoccupational injuries.

There must be an adequate number of all types of MDs and allied health professionals.

» Full complement of services to treat Workers’ Compensation injuries.

» Minimum of three providers in each service.

» Maintain continuity of care.

Medical treatment must be readily available at reasonable times.

The network must utilize and follow ACOEM guidelines.

III. Creating an MPNStructural Requirements

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III. Creating an MPNNetwork Composition

The MPN includes Employer’s current occupational health (OH) providers. The MPN will be supplemented by providers from other groups as necessary to provide

requisite levels of coverage in geographic areas. The providers in the network will be handpicked based on:

» Quality of care (clinical care and case management).

» Conformance to Workers’ Compensation standards (ACOEM and Sutter MPN).

» Adherence to stringent criteria including: patient access, treatment protocols, and reporting requirements.

» Cost-effectiveness.

Medical Partners @ Work provides superior service to Sutter employees and employers through a select group of specially trained providers.

Medical Partners @ Work provides superior service to Sutter employees and employers through a select group of specially trained providers.

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The MPN can be tailored to meet EMployer needs. To ensure quality of care and case management in the network, a stringent credentialing process is in

place to add providers to the MPN.

The MPN can be tailored to meet EMployer needs. To ensure quality of care and case management in the network, a stringent credentialing process is in

place to add providers to the MPN.

Employers will be asked to submit a list of additional preferred providers, as well as their current OH providers.

Additional providers will be reviewed based on their conformance to MPN standards.

Providers who meet predetermined levels of care and case management will be approved.

Employers will participate in provider selection and addition to the MPN.

A process will be provided to resolve issues between employers and the network regarding the inclusion of specific providers.

III. Creating an MPNNetwork Customization

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Medical Partners @ Work will be funded by Sutter Health for its first 2 years. This will allow the MPN to demonstrate the value

that will validate future fee arrangements.

Medical Partners @ Work will be funded by Sutter Health for its first 2 years. This will allow the MPN to demonstrate the value

that will validate future fee arrangements.

For the first 2 years there will be no fee for employers, insurers, or providers (Sutter or non-Sutter) to use the network.

After 2 years, once value has been demonstrated, Medical Partners @ Work will establish fee arrangements with its clients. Examples of potential arrangements include:

» Fee-for-service and risk sharing for employers

» Fee-for-service for insurers

» Subscription fees for providers.

The immediate value of the MPN will be decreased claims costs.

III. Creating an MPNBusiness Model

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Sutter has identified an IT solution enabling the MPN to provide unparalleled clinical management and communication with providers and clients.

Sutter has identified an IT solution enabling the MPN to provide unparalleled clinical management and communication with providers and clients.

III. Creating an MPNIT Infrastructure

Track the status of a claim.

Track a patient’s progress through the system.

Track and report on the total medical cost of a claim.

Provide real-time information to employers and insurers, including:

» Medical reporting.

» Work status.

» Access to claim data (within HIPAA guidelines).

Track outlier patients/doctors based on established criteria.

Electronically manage the referral process between providers.

MedfoNet

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With the assistance of MedfoNet, Medical Partners @ Work will provide regular reporting to affiliates, employers, and insurers

on preestablished quality indicators, such as:

With the assistance of MedfoNet, Medical Partners @ Work will provide regular reporting to affiliates, employers, and insurers

on preestablished quality indicators, such as:

Percentage of patients returned to full work duty in 30 days.

Average number of modified and lost work days

Average time to close a claim.

Average medical cost of a claim.

PD rating per Diagnosis by provider.

Time to access Specialist

Complication rate

2nd/3rd opinion request rate

Medical utilization rate (PT, MRI )

IV. MPN ValueReporting of Quality Indicators

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Medical Partners @ Work allows EMployer to more closely manage Workers’ Compensation injuries, thereby minimizing

the cost of injuries while ensuring quality outcomes.

Medical Partners @ Work allows EMployer to more closely manage Workers’ Compensation injuries, thereby minimizing

the cost of injuries while ensuring quality outcomes.

IV. MPN ValueCost and Outcomes

Monitoring providers’ compliance with MPN standards will encourage providers to more actively manage cases, thereby:

» Returning patients to work sooner, reducing the cost of lost days.

» Reducing patient visits, which then reduces the cost of medical treatment.

MPN protocols and case management will also ensure quality patient outcomes and improve patient satisfaction.

+ =

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By November 1 the MPN application must be submitted to the Administrative Director, complete with a list of providers and contracted employers.

By November 1 the MPN application must be submitted to the Administrative Director, complete with a list of providers and contracted employers.

September – Requests for preferred providers to participate in the MPN.

October – Employer forums; sign-up for Sutter MPN.

November 1 – The employer or insurer shall submit a plan for the MPN to the Administrative Director of the Division of Workers’ Compensation for approval.

January 1, 2005 – An insurer or employer may establish or modify an MPN for the provision of medical treatment to injured employees.

V. Key Dates

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VI. Summary

Significant savings can be realized through a single Sutter MPN.

An MPN composed of the best doctors will deliver cost savings to employers through fewer lost days of work, less medical treatment and less permanent disability.

Sutter MPN will collect and analyze medical treatment data during treatment in order to effect optimum outcomes.

Sutter MPN Executive Director and Medical Director are experienced and committed to providing successful cost containment solutions while simultaneously providing optimum medical care to employees.

Medical Partners @ Work will allow Employer, Insurer and Provider to partner together to optimize outcomes.

Medical Partners @ Work will allow Employer, Insurer and Provider to partner together to optimize outcomes.

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VII. Questions and Answers

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The MPN must include all providers necessary to treat Workers’ Compensation injuries.

The MPN must include all providers necessary to treat Workers’ Compensation injuries.

Primary treating physicians. Specialists. Chiropractors and acupuncture. Psychologists, dentists, and podiatrists. Ancillary care providers (PT, OT, audiologist, speech pathologist). ED/inpatient/outpatient services, including surgery. Pharmacy. Laboratory. Diagnostic imaging. Home health services. Durable medical equipment (DME).

Appendix AMPN Provider Requirements

A-1

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Appendix BContact Information

Ms. Judi Monday/CEO916-565-8660MondayJ@sutterhealth.org

Mike Cohen MD / Medical Director916-565-8613CohenMi@sutterhealth.org

Jeff Lanterman JD/ Executive Director 916-565-8773

Matt R. Sturm/Project Manager206-689-2200MSturm@ecgmc.com

B-1