Do laws directing injured workers to providers matter?

It’s about the details.

Anyone reading the quick headline from WCRI’s just-published analysis of employer direction may well draw the conclusion that there’s no difference in costs between states where the employee or the employer has the ability to choose the treating physician – a conclusion that would superficially right – but actually wrong.

A summary of the study notes it addresses “injuries that occurred mostly between 2007 and 2010 across 25 states in which either employers or workers control the choice of provider. It excludes states where workers can choose a provider within their employers’ established network.”

(I’m not sure if we’d see a difference if more current claims data were used as after 1/1/2014, full implementation of ACA may have affected claim allocation to work comp or non-work comp insurance.)

Note the nuance here; WCRI is careful to describe the “direction” metric as one dividing states into those where employers or employees have the MOST control. The “line” between employer-choice and employee-choice is really not a line at all, but rather a shading of white to black, with many permutations of grey.

For example, there are states where the employer can direct the patient to a specific doctor, others where the patient can choose from a panel, and still others where direction is only allowed if the employer has some sort of state certification.

Then there’s the ability of the patient to “opt out” for a course of treatment (Illinois) or change physician to another one, perhaps inside the panel or maybe completely outside the employer panel – after some defined period of time.

And let us not forget that employers can suggest, soft-channel, encourage, provide transportation to, or otherwise get an injured worker to a particular doc or facility in almost every state without violating the law – they just can’t FORCE the employee to go to a doc or choose from a panel of docs.

Or, as authors David Neumark and Bogdan Savych state; “it is common for employees to choose the medical provider when policies give employers control over provider choice, and for employers to choose the provider when workers have the right to direct this choice.”

A key statement: states that give “workers the most control over the choice of provider were associated with higher medical and indemnity costs among the small share of the most expensive back-related injuries…” In other words, claims that are harder to diagnose and where there is less unanimity in agreement on preferred treatment tend to be more expensive in employee-choice states. 

What does this mean for you?

My main takeaway is as it’s been for years – employers should do their damndest to get their employees to high quality physicians who know and understand workers comp.  And then get out of their way.

10 thoughts on “Do laws directing injured workers to providers matter?

  1. Thanks for pointing this out. I was really disappointed to see the “headlines” about this study. Texas has seen very positive results from use of networks/panels where employees choose from a list of contracted providers. I agree that the conclusion is inaccurate.

  2. Joe,
    This is not like the WCRI that I’ve known for years? I was scratching my head last week when this came out https://www.linkedin.com/hp/update/6263726492593778688

    WCRI just does not make these kinds of errors…. Any thoughts on what’s driving this? WCRI also dumped on employers controlling/chaneling employer control of medical care at the annual conference, too. Is this driven by something bigger than the debate on employer opt-out options, time to report an incident under the plan, etc…?

    The issue is important as I believe there are two things that will increase the WC employer/employee relationship on ‘choice’ of medical care (WCRI may want to measure)… 1) Our advocacy approach with injured employees; 2) Telephonic Nurse Triage we are using — as first impressions DO matter. http://www.businessinsurance.com/article/20170403/NEWS08/912312696/First-impressions-positive-communication-trust-matter-in-workers-compensation-cl

    Both of these will positively increase the chaneling/control when managed correctly, as injured employees will ‘trust’ (and appreciate) a nurse on the phone (and sometimes a doc on video thanks to tele-health technology) to help take care of them vs call center employees (discussion is needed later about potential abuse by using ‘self-treatment percentage’ goals to measure ROI on Nurse Triage).

    • Hello John – Not sure I follow you in terms of an error on WCRI’s part. The press release and full study describe in detail key and subordinate findings and how those findings could be used by policymakers. I didn’t note any methodological errors or mistakes in interpretation. a few were discussed in the blog post. If you can clarify what you mean by an error that would be helpful.

      • Error being the headline not reflecting much of the details in the study (or my real world experiences) “… – but actually wrong” as you outlined in your first paragraph.

        Although pulling certain parts of the 109 page study out of context is not right to do with these studies, there are several findings at issue for me that seem to be polar opposite of the headline. I don’t have the time/energy/space to outline/debate them all, but the two that jump out are at the bottom of page 49 under the INDEMNITY COSTS section “… For indemnity costs… Table 4.5 suggests higher costs in states where policies give workers more control over the choice of provider…costs are higher by about 20 percent (!)….these estimated cost differentials are not statistically significant…”; and the other at the bottom of page 61 “The one exception….category including back and neck…higher medical cost differential is significantly significant”. The key issue on the second is that we know this “back and neck” category includes the most costly and highest disability days for WC and should carry significant weight. But probably why I’m not a research scientist!

        • Hi John – I’d suggest headlines by their nature can’t give a full picture, so this one isn’t in error. Rather my contention is the potential interpretation of the headline is the issue here – and shows why reading more than a headline is critical, especially in these days of alt facts.

          Like many studies, there are many potential interpretations and implications, and the findings you cite aren’t polar opposites bur rather add depth. Notably these findings represent a relatively small number of claims, and thus do not refute the headline’s validity.

  3. Many employers are not sending their patients to the highest quality physicians, they are sending them to the cheapest physicians.
    In California, most employers/insurance carriers will only put a doctor on their MPN if doctor agrees to accept fees below fee schedule.
    This is the problem with employer/carriers controlling choice of physician

    • Agreed, its all about bottom line. Been in the business since’94, we have many providers retiring many no longer accepting injured workers. So we have folks treating via the MPN that end up with preceived untreated injuries that wind up with attorneys who then refer the to a ‘pill mill’ while awaiting multiple QME panels. Many MPN are not properly maintained nor staffed so you call an MPN provider and they will tell you the do not accept injured workers and we are talking major corporate nationally based MPN. CA has always been chaos and mayhem, boom and bust in this business.

      • I think we all agree CA is indeed a monster that ever-changing strategies must be utilized.

        JG is right – key is QUALITY providers not CHEAPEST providers. I can’t speak for the industry, but country-wide I can tell you that the cheapest privider strategy died 7 years ago back (for us) back when we stopped casting an all-inclusive wide provider net. Instead, strategies looking at much bigger picture QUALITY factors with custom networks based on outcomes are impacting utilization and TOTAL outcomes for our customers, not just a beat-down on ‘cost’.

        My favorite saying is that we have a UTILIZATION problem, not a COST problem… (i.e. Pharmacy – it’s not the ‘cost’ of the pill itself…. it’s the UTILIZATION ripple effect).

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