The latest on the work comp managed care world…

There’s been so much activity on the national health care scene involving managed care, medicare, provider reimbursement, consumer-directed health plans and Part D, I’ve neglected another loyal readership, the brave souls who toil in the workers comp managed care business.
Apologies, and let’s catch up.

Aetna’s workers comp network initiative (Aetna Workers Comp Access, AWCA) appears to be pleasing some and not pleasing others. The big managed care company has been working hard to become an alternative to the comp network offerings of First Health, CorVel and Concentra/Focus, and achieved some early successes, at least in terms of customer commitments. However, as those experienced in managed care sales know all too well, a “commitment” may not translate into appreciable revenue for many months, and some commitments never do. While many deals have been announced, sources indicate Aetna’s sales force has been scrambling of late to encourage potential customers to implement by making concessions on contract terms and pricing.
A relatively recent success has been the decision by Concentra to incorporate Aetna’s network into the Focus PPO. For now, Aetna is in 13 states. Given Concentra’s market share in the combined network/bill review sectors, this may be a significant win for AWCA.
The company’s deal with the Hartford to provide networks in many jurisdictions appears to be moving in fits and starts. Evidently six states have been implemented to date and several more are in “test” mode. AWCA missed its implementation dates in a couple of states due to regulatory complications and difficulty contracting enough providers. One of the tougher states is Florida, where it is notoriously tough to sign up providers in the Panhandle and north central parts of the state. That said, the Hartford folks are none too pleased with the missed deadlines, as the expected savings were baked into the company’s 2006 budgets.
Aetna’s WC technology has also been a challenge; sources indicate the company’s reliance on multiple systems (likely a result of its acquistions of PPOM in Michigan and other health plans in other jurisdictions) and decision to stay out of the bill repricing business may be costing it business or slowing down implementations. In defense of Aetna, most of its initial customers are bill repricing firms who would likely not find more competitiion to their liking, and the WC payer world is not exactly known for its technological sophistication…
Meanwhile, UnitedHealthcare’s Ingenix subsidiary has begun selling access to a “workers comp network” offering in the Maryland area. The network contracts, which at least in theory included workers comp as an authorized payer, are on MAMSI’s paper (MAMSI is a regional health plan purchased by UHC several years ago). This represents UHC’s first venture into work comp networks since it sold MetraComp to NHR (which was then bought by Concentra) several years ago. No news on any customer signings yet, and they have yet to get around to putting any info on their website about the WC product offerings…
First Health, which was struggling to compete against Aetna at this time last year, has made some significant progress of late and may be the primary beneficiary of Aetna’s failure to complete network development in some states (FH is the incumbent network at the Hartford). Notably, FH signed a deal with specialty managed care firm MedRisk (a Health Strategy Associates consulting client) that provides FH clients with the ability to access MedRisk’s best-in-class physical medicine EPO (Expert Provider Organization). Reports indicate Bluebell PA insurer PMA is the first FH customer to implement the new program, going live today. The benefits to FH are significant; MedRisk’s savings are two to three times greater than FH’s previous physical medicine solution, and as FH customers pay based on a percentage of savings, FH generates a lot more revenue, while outsourcing all the work (and probably a good bit of expense) to the acknowledged industry leader in physical medicine management. Other FH clients include St. Paul/Travelers, the Hartford, SRS, AIG, and Broadspire.
Notably, before signing the deal with MedRisk, FH first tried to develop their own PT answer internally via First Health Priority Services, a venture that was quite unsuccessful, delayed their entry into this lucrative sector, and deeply frustrated a couple of large customers who were brave enough to sign up for the experiment.
FH still has not officially announced a new leader for the WC business. Rob Gelb continues in his role as VP with responsibility for strategy and product development, a public promotion to the top spot does not appear imminent. Industry veteran and long-time sales leader Art Lynch remains as SVP in the WC division. Both report up to Jim McGarry at Coventry.
What does all this mean for you?
Aetna remains a work in progress, but it appears to be delivering on its initial promise to be a viable alternative to First Health.