Transcript Sutter Health @ Work Development of a Medical Provider Network

Worker's Compensation Reform
SB 899/227/228/749
Presented by
Mike Cohen MD
Sutter Health @ Work
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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I. Background
Introduction to SB 899
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.
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I. Background
Competitive Response
An MPN has strategic value to Employer. MPN Defends
against excessive medical utilization and promotes best
outcomes to lower cost.

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
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I. Background
Sutter MPN Attributes
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.
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I. Background
Integrated MPN Advantages
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.
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II. MPN Vision
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.
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II. MPN Vision
First-Mover Advantages
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.
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III. Creating an MPN
Structural 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.
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III. Creating an MPN
Network Composition
Medical Partners @ Work provides superior service to Sutter employees and
employers through a select group of specially trained providers.

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.
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III. Creating an MPN
Network Customization
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.
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III. Creating an MPN
Business Model
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.
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III. Creating an MPN
IT Infrastructure
Sutter has identified an IT solution enabling the MPN to provide unparalleled
clinical management and communication with providers and clients.

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.
MedfoNet
» Work status.
» Access to claim data (within HIPAA guidelines).

Track outlier patients/doctors based on established criteria.

Electronically manage the referral process between providers.
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IV. MPN Value
Reporting of Quality Indicators
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 )
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IV. MPN Value
Cost and Outcomes
Medical Partners @ Work allows EMployer to more closely
manage Workers’ Compensation injuries, thereby minimizing
the cost of injuries while ensuring quality 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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V. Key Dates
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.
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VI. Summary
Medical Partners @ Work will allow Employer, Insurer and
Provider to partner together to optimize outcomes.

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.
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VII. Questions and Answers
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Appendix A
MPN Provider Requirements
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).
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Appendix B
Contact Information
Ms. Judi Monday/CEO
916-565-8660
[email protected]
Jeff Lanterman JD/ Executive Director
916-565-8773
Mike Cohen MD / Medical Director
916-565-8613
[email protected]
Matt R. Sturm/Project Manager
206-689-2200
[email protected]
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