Stu Baron, President of HCO Plus has this to say about today's newest medical treatment solution for workers' compensation - Health Care Organizations (HCOs)....

Quality Medical Treatment is The Key to Controlling Workers' Comp Claims

I believe it is safe to say that there is at least one basic truth in workers' compensation. If you can keep
your injured worker(s) treating with competent doctors, you have a better than even chance for their speedy recovery and a return to their usual and customary job with a minimum of little or no lost time.

On the reverse side, it is equally safe to say that if you lose medical control to a doctor/lawyer team who place their own interests above those of the injured worker, the claim will cost you a great deal of more money. There will be excessive temporary disability, outrageous medical bills from the injured worker’s
doctor(s), along with inaccurate medical reports that will have to becountered by your insurance carrier or third party administrator (TPA).

With no medical control, you can expect an inflated Permanent Disability rating as well as the potential need for Vocational Rehabilitation benefits. It is not unusual for an applicant oriented doctor to find that the injured worker is unable to return to his/her previous occupation and therefore needs to be retrained. And finally, there are the necessary legal fees incurred to settle the claim. What started out as a fairly simple injury has now progressed into a $25-$30,000 settlement and that is a conservative estimate.

You ask how did this happen?

Since the middle 1970's, it has been the law in California (Labor Code SB 4600) stating that employers have 30 days absolute control over the treatment of work related injuries and illnesses. However, the problem is that less than 20% of all injury claims can be treated and closed (with the injured employee released to full duty) within the 30 days allowed by the statute.

This means that the injured worker (and his/her attorney if they have one), can simply wait 30 days and then select a doctor of their own choosing. This new doctor then becomes the Primary Treating Physician (PTP) and his/her diagnosis and findings are presumed correct.
The burden of proving that the injured employee's new doctor is wrong then shifts to the insurance company or TPA, who must overcome that doctor's report with their own medical report, which only adds to the cost of the claim. So you ask, is there an answer? YES, and it is called an Health Care Organization (HCO).

But just what is an HCO and what can it do to reduce my costs?

The Health Care Organization (HCO) program was created by the California legislature as part of the 1993 Reform Act. It is best described as a comprehensive medical treatment program for workers' compensation injuries that is overseen by the state. It looks very much like an HMO because it provides all services needed to cure the injury and return the worker to his/her job. However, it pays no bills and is responsible only for the medical oversight of any given claim. The on-going overall responsibility for the management of the claim remains with the employer’s workers’ compensation carrier or TPA if self-insured.

So what is the real benefit of an HCO?

An HCO offers employers and their insurance carriers an extremely important benefit. It extends the amount of time they have to direct the medical treatment of the injured employee. Thus, with a well managed HCO in place, an employer gains invaluable additional time within which to provide quality medical treatment to their injured worker. Labor Code § 4600.3 extends the amount of time employers have to provide care to their injured employee from the current 30 days allowed by LC 4600 to a minimum of 90 and up to a maximum of 365 days.
In the six years we have offered the program, the number of claims that are now being closed with a minimum amount of cost and lost time by the injured worker is outstanding. As noted above, with the traditional 30 days offered by LC 4600, we are able to close on average about 20% of all claims. However, with 90 days of directed treatment we are seeing an average 80% closure rate. And with 180 days control, the number rises to 95% - 97% claims closed within the medical treatment control period.

This closure rate has translated into substantial direct dollars saved in temporary disability, permanent disability, medical and of course legal costs. For employers who have been in the HCO program for a minimum of two years, we are seeing an average cost savings of approximately 40% - 50% on indemnity claims.

The HCO Plus Approach to HCOs & Medical Control

HCO Plus recognized the incredible value of this unique tool when the legislation was first passed and signed into law in 1993. We installed our first HCO successfully in 1995 for one of our employer clients with the full cooperation and support of their carrier, The Travelers Insurance Co.

Our approach to HCOs is quite different from the way others have utilized the program. After listening to the many objections voiced by claims personnel and employers, we devised a method over the past six years that has:

(1) Significantly reduced the up-front costs to all parties while at the same time simplifying the administrative process.

(2) Allowed claims examiners to make informed, real-time decisions on each claim using the case management tools provided by HCO Plus.

(3) Provided active claims oversight by the HCO Plus highly experienced claims staff thereby ensuring that the claim is well handled from the outset.

(4) Provided unlimited phone/FAX access to our highly trained staff for answers to those day to day questions that may have an impact on your workers’ compensation program. Examples would be questions on effective claims handling as well as how best to hire, discipline and fire an employee. Other issues could be whether or not you need to provide "reasonable accommodation" or modified/light duty work for an injured employee under ADA, FMLA and the new state requirements under AB 2222.

HCO Plus's aggressive, pro-active approach to the management of workers' comp claims coupled with unlimited access through our exclusive "Management Hotline" has proven to be the final piece in the puzzle of how to effectively manage your workers' compensation claims.

What Makes The HCO Plus Approach Different?

We all know that there is nothing free in this world. In our program, we ask the employer to pay the first years up-front costs with the assurance from their carrier that they will receive underwriting credit for all or part of the money spent on the HCO at next year's renewal. Some carriers have gone so far as to give partial premium credit with the completion of the initial installation of the HCO leaving
the remaining credits to be applied on renewal.

We have found over the years that when an employer commits to paying for a program, it ensures the employer's active participation in the overall process. With their money on the table, employers are loath to leave the management of their claims to chance. On the other side, the carriers welcome the increased medical control afforded by the HCO as well as the employers active involvement in the claims' process.

Our own experience with the program over the past six years has proven that this "team approach" works to reduce both the number of claims filed as well as their associated costs. To be more specific, with a properly installed and administered HCO program, the average time to close a claim has been reduced to 9 - 11 months as compared to the industry average of 18 - 24 months.
This has translated into substantial savings in:

• Total Temporary Disability payments
  
• Medical costs because we have only one Primary Treating Doctor
  
• Permanent Disability Ratings and Payments
  
• Vocational Rehabilitation Costs
  
• Medical/Legal Expenses
  

The following illustrates the benefits of installing an HCO for any employer:

WITHOUT AN HCO

The employer has 30 days absolute medical control over an injured employee's medical care. About 20% of all claims are closed within this time period.

WITH AN HCO BUT NO MAJOR MEDICAL INSURANCE

The employer has 90 days absolute medical control over an injured employee's medical care. About 80% of all claims are closed within this time period.

WITH AN HCO AND MAJOR MEDICAL INSURANCE OFFERED

The employer has 180 days absolute medical control over an injured employee's medical care. The employer must be willing to pay 50% of all the major medical plan if the employee elects to be covered. About 95% of all claims are closed within this time period.

The HCO Plus Approach to Managed Care In Workers’ Compensation.

HCO Plus has joined forces with two of the premier HCOs thereby enabling us to offer the program throughout California. These HCOs have been leading participants in the evolution of the program. Both of them have the necessary two licenses as required by the statute.

Together we continue to expand our current medical provider panel to cover the major population centers as well as outlying regions of California. This dedication to the development of a quality panel of primary treating doctors supported by an extensive panel of recognized specialists allows us to offer the program in both urban as well as rural areas.

We welcome your inquiries. Please feel free to e-mail us at:

info@wcccusa.com

or call us at
562-596-6333.

We look forward to hearing from you.

Workers' Compensation Claims Control 3377 Cerritos Avenue, Los Alamitos, CA 90720 Phone: 562/596-6333 - Fax: 562/596-8090 Email: info@wcccusa.com