What’s Up with Outcomes-Based Networks?
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Some studies have shown workers’ compensation medical costs increasing by as much as 6% annually since 2002. When looking at opportunities to control dollars spent on workers’ compensation claims, many companies turn to medical management. Historically, medical management strategies included preferred provider organizations (PPOs), utilization reviews (URs), nurse case management and medical peer reviews. While these resources have made an impact, there didn’t seem to be a consistent, significant offset to the increasing costs.
In response to these continued concerns, the industry introduced “outcomes-based networks” – which aim at identifying workers’ compensation providers who have statistically shown effective patient outcomes and claims costs. These programs were developed in response to the market’s desire for smaller occupational health-focused networks, whereby clients can increase utilization with doctors who are associated with their most desirable incomes.
While this isn’t yet offered industry-wide, studies have demonstrated the following results when implemented:
- 40% faster resolution of claims
- 60% reduction in medical costs
- 70% reduction in indemnity costs
- 50–70% reduction in lost work days
With these anticipated outcomes, employers cannot afford to overlook this opportunity. So, how can your company capitalize on this concept? Start with the following steps:
1. Check with your carrier and PPO network to see if an “outcomes-based network” is available
2. If it isn’t offered, there are a couple of ways to develop an outcome based network:
- Contract with a provider who will offer this outside of the internal carrier program
- Determine what analytical tools the carrier has available to track the outcomes of claims presently and then develop a list of providers accordingly
3. Provide the network list to the front line managers and make this list available to all employees
4. Ensure the reporting or triage program being used are aware of these referrals, so they can direct care in states that call or provide soft referrals in those employee choice states
Reduction in dollars, time lost and duration will not only reduce overall workers’ compensation costs, but also increase employee satisfaction with the outcome.
- Back to Basics Workers’ Compensation Seminar
- Workers’ Compensation: A Deep Dive
- Workers’ Compensation: Bottom Line Impact
- I Should Have Seen That Loss Coming
- 5 Steps to Building a Risk Culture
- Riding Out Your Workers’ Comp Options
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