The Pennsylvania House of Representatives is currently considering a bill that would allow employers to direct treatment of their injured workers to coordinated care organizations (CCOs). Employers’ ability to direct injured workers to certified networks of physicians with proven track records of success has been shown to positively affect both medical costs and return-to-work rates.
Sedgwick supports and encourages our clients with Pennsylvania workers’ compensation exposure, and any others who feel it may impact their business, to stand behind this employer medical control bill. Contact your local Pennsylvania legislators and voice your support for House Bill 467; we have drafted a sample letter to use. To identify your Pennsylvania legislator, click here.
Let’s take a deeper dive into what the bill is about. Many employers note high medical costs and long disability durations associated with their Pennsylvania workers’ compensation claims. Studies support this finding; according to the Workers Compensation Research Institute (WCRI) CompScope Medical Benchmarks for Pennsylvania, released October 16, 2014:
- Medical payments per claim increased 5.8%in the years 2012-2013, driven by hospital inpatient and outpatient payments
- Longer temporary disability durations and larger settlements drove higher than typical indemnity benefits per claim in the years 2009-2012
- Litigation expenses were higher in Pennsylvania in the years 2009-2012 relative to other states studied
In an effort to address these concerns, HB 467 was recently introduced before the General Assembly of Pennsylvania. This bill would provide employers who establish a list of one or more designated CCOs for the treatment of employees the ability to require treatment only with participating providers for the duration of their injuries. Currently, Pennsylvania law requires only that an employee incurring a workplace injury seek treatment through a panel of providers (which must be designated by the employer and can include up to four CCOs) for 90 days following the initial visit.
In a memo to all members of the Pennsylvania House of Representatives, Rep. David Hickernell wrote, “Unfortunately, CCOs have never been implemented as intended because they are subject to the same 90-day limit that governs provider panels, so employers have always preferred to simply establish a panel.”
Other states which give employers similar ability to direct care to certified networks have seen successful results. For example, the Texas 2014 Workers’ Compensation Network 2014 Report Card Results showed that:
- Overall, networks have improved cost performance relative to non-network
- Networks tended to have lower utilization of hospital services than non-network
- Networks reported higher return-to-work rates than non-network and had lower average numbers of weeks off from work than non-network.
HB 467 is currently being vetted by the Labor and Industry Committee. If the bill makes it out of committee and passes the House, it will be sent to the state Senate for further caucus/committee discussions and finally a floor vote. Similar legislation proposed in 2013, HB 1646, died in committee.
We will continue to monitor the progress of this bill and keep you apprised of any significant developments. Should you have any questions, please contact your Sedgwick client services representative.
Eddy Canavan, VP, Workers’ Compensation Practice & Compliance