A panel at the WCRI conference discussed the TX workers comp reform initiatives aka House Bill 7; here are my impressions in chronological order.
The (relatively) new WC fee schedule, (new as of 8/2003), set reimbursement at Medicare +25%, and allowed for employers to direct injured workers to specific health care providers. The change was a significant decrease for surgery, and an increase for Evaluation & Management services. Surgical prices dropped 31%, while E&M prices jumped by over 23%.
Non hospital payments were already decreasing before the new fee schedule, but medical payments per claim were up due to increased physician utilization. However, utilization actually decreased after the new fee schedule was implemented, especially for surgery.
My take is this was due to many surgeons deciding to drop out of WC. No surgeons, no surgery. According to the head of the Texas Orthopedic Ass’n, a panel membe, a third of surgeons have dropped out of managed care. The gentlemen also cited onerous paperwork and documentation requirements, as well as networks’ requirements that providers give them a discount below what is already a very low fee schedule.
First Health’s representative responded to the physician’s comments by citing the fast ramp-up schedule, noting that FH has fewer than half of the providers they want to have. I’m really really not surprised; FH wants a discount off an already low fee schedule, so its no wonder they can’t find enough providers.
The representative from the self-insurance association said that they never wanted the networks to be discount-driven, but rather quality driven.
The state’s WC Public Counsel said that the biggest problem injured workers had was lack of access to providers.
See a pattern here? The low reimbursement rates, coupled with First Health (and other networks’) need to get docs to give a discount off those low rates, has severely limited the number of docs who accept WC patients.
Other tidbits
Chiropractic costs zoomed, or rather payments to chiropractors zoomed. Much of what chiropractors do is actually physical therapy. It also turns out that the fee schedule changes treated chiropractors differently; the Medicare fee schedule was not used as a basis for chiro.
The network certification process has resulted in 17 networks certified to date, although the process has been tedious at best. This may be due in part to the regulatory body that does the certification – it is done by Texas’ HMO regulators, folks who are not known to have deep and broad knowledge of WC.
Specialist participation in Texas may be limited because Concentra also has an MSO that bills/collects for its specialists.
Any specialist that is not a part of the Concentra MSO has no incentive to sign on to the Concentra network as referrals are going to be diverted away from non-MSO specialists by Concentra’s primary care providers and centralized schedulers.
This may not be a good model for improving health care access or improving network participation.
The FH situation does not surprise me; we are observing similar changes in NM. The challenge with the networks being quality driven rather than price driven is by apply a discount; the network takes a portion of the discount, that’s how they make their revenue. No discount, no revenue, no network. To be quality driven, the WC payer would have to be willing to pay to be part of a quality driven network – not likely to happen. If you compare the situation to the non-occupational networks, the Health Plans (payer) controls most of the networks – physicians want to be part of their networks, which in turn gives them business. Most non-occupational networks are quality driven with formal controls for billing and payments as well as a venue for provider complaints. Seems we have a long way to go on the WC side.