Survey: HMOs struggle with workers’ comp
Fewer HMOs offering managed workers’ comp
The "Fifth Annual Milliman & Robertson Survey of HMOs: Integrated Disability Management and Managed Workers’ Compensation Strategies and Products" report found a more than 20% drop in the total number of health maintenance organizations offering managed workers’ compensation and integrated disability management services.
Milliman & Robertson’s fifth annual survey was mailed to HMOs with a minimum group enrollment of 20,000 members, representing roughly 85% of the total national HMO marketplace. It asked HMOs what strategies and services they were currently offering or considering offering specific to managed workers’ comp and integrated disability management.
Summary of findings
The report was co-written by William L. Granahan, CIC, LIA, CMC, a senior consultant and practice manager with Milliman & Robertson’s Boston office. Key findings include:
1. HMOs are backing away from managed workers’ comp programs. Active participation in those programs dropped from 70% of respondents in 1996 to 63% of respondents in 1997 to 41% in the recent 1998-1999 survey.
2. HMOs reported continued interest in integrated disability management services. However, most respondents reported little active participation in these programs at this time. Slightly more than 40% of respondents reported they were considering providing integrated disability management services, but only 11% reported offering any disability management services for nonoccupational claims.
(The box on p. 145 breaks down the types of managed care services HMOs offer to managed workers’ compensation and integrated disability management clients.)
3. Larger HMOs with more than 250,000 group health members continue to be the most likely to offer managed workers’ comp and integrated disability management services.
4. Seventy-nine percent of HMOs identified the desire to increase their current health care employer client base as their primary motivation for offering managed workers’ comp and integrated disability management services.
5. Seventy-one percent of HMOs reported increased revenue as their primary motivation for offering these services.
6. Forty-three percent of HMOs reported greater market penetration as their primary motivation.
7. HMOs actively providing managed workers’ comp and integrated disability management services reported that occupational injuries and lost-time claims represented less than 10% of their revenue.
8. Roughly 50% of HMOs actively providing managed workers’ comp and integrated disability management services reported that 70% or more of their group health primary care physicians were included in occupational health networks. (The box at left breaks down the types of payment mechanisms HMOs use to reimburse providers.)
9. Roughly 65% of the HMOs actively providing managed workers’ comp and integrated disability management services reported linking up with external vendors to supplement their programs. Of those, roughly 40% reported partnerships with workers’ comp insurers, 23% reported partnerships with third-party administrators, and 30% reported partnerships with case management firms.
10. Total medical and indemnity cost savings estimated by HMOs actively providing man-aged workers’ comp and integrated disability management services were between 20% and 30%. However, the authors note that it is unclear what data were used to determine those employer savings.
11. Most HMOs listed tracking patient outcomes as a key objective, yet a majority did not provide data on the average duration of lost-time cases.
"Duration of lost-time cases is a key measure of the true efficacy of a managed workers’ comp program, and HMOs offering these services aren’t able to measure the most important cost savings generated by their intervention — the replacement wage benefits saved by a more rapid return-to-work program," Granahan says.
(For information on Milliman & Robertson’s fourth annual survey, see Case Management Advisor, March 1999, pp. 45-47. For a discussion of business opportunities for case managers in the current workers’ compensation market, see cover story.)
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