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Texas workers comp reform bill signed

Texas Governor Rick Perry signed a Workers Comp reform bill into law yesterday, authorizing the use of networks for treatment of injured workers.
To quote the Dallas Star Telegram;
“The revised law will create physician networks like those in commercial health plans and provide a small boost in benefits paid to injured workers. Texas has the country’s third-highest workers compensation costs and the highest rate of injured employees not returning to work. The law replaces the Workers’ Compensation Commission with a single, appointed commissioner housed in the Texas Department of Insurance and creates an Office of Injured Employee Counsel as an advocate for workers.”
What does this mean for you?
At long last, perhaps meaningful reform of the one of the nation’s worst workers comp environments. I’ll be taking a much closer look at this legislation and potential impacts of same in the near future.

5 thoughts on “Texas workers comp reform bill signed”

  1. This is bad for the Work comp providers. Now we have to take a 15-25% cut because of the provider networks in the middle. The quality providers that have been treating injured workers for many years will now be reimbursed less for their work. The system could have been reformed without giving the networks a financial boost. As we loose up to 25%, the networks make their percent, while saving the insurance companies money. I really doubt that the savings with be passed on to the employer. It’s all about the insurance companies making money.

  2. The problems in Texas include highly excessive utilization of physical therapy and chiro. The number of visits for both types of services are substantially above the national mean. While one can point the finger at insurance companies, managed care firms, and the like, the fact remains that providers have taken advantage of the lax system in Texas to overtreat and thus drive up medical and indemnity expenses.
    There are undoubtedly many providers in Texas who do not treat inappropriately. If these providers are able to make a solid, fact-based case to payers that their outcomes are better, they will be able to charge a fair price.
    Bottom line – you can complain and point the finger, but the new reality is here, and succesful providers will flourish at the expense of those who choose to put their heads in the sand.

  3. Joe, have you heard anything about the formation of these managed care networks or regional worker’s comp networks? Or is this something that will go into effect in September?

  4. Zoot – Yes, networks cannot officially start until 1/1/06. there are networks forming now, primarily built around existing ones and there is some evidence of regional or local networks. If FL and other states are any indication, the local networks will not pan out over time, the large nationals will gain significant market share, and there will be one or two state-wide networks that will do the best job and capture a good chunk of the market.

  5. I was told today by a payor that the networks go into effect 9/01/05. I don’t know. I agree about the over utilization of physical therapy and chiro, but the networks will not contribute to slving this problem. The networks benefit the longer the patient is in treatment. The insurance company has always had utilization companies who control the length of treatment for the employees. The networks will just decrease the provider’s revenue.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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