Managed care organizations (MCOs) and third-party administrators (TPAs) play very distinct and different roles in the Ohio Workers’ Compensation System, but they do share a common goal.
“Everyone wants the injured worker to return to work,” says Richard DeStefano, consultant for Ohio Employee Health Partnership. “That’s the bottom line. It’s a win-win situation for the employer and the bureau.”
Many organizations retain a TPA to assist them with claims management, but the TPA does not need to be tied to your MCO. In fact, MCOs that are not owned by a TPA or insurance company can focus on working with all TPAs equally and successfully.
Smart Business spoke with DeStefano about how MCOs and TPAs coexist and how their relationship affects business owners.
What are the differences between MCOs and TPAs?
From an objectivity standpoint, the MCO’s focus is on the injured worker. The MCO is a neutral party, so it shouldn’t be concerned with, ‘Do we allow this claim; do we want to fight it?’ The MCO separates itself from claims issues and focuses on the medical issues and treatment plans submitted by the attending physician of record or any associated treatment plans from specialty providers. If these do not fit the injury or contain issues not related to the injury, the MCO will take appropriate steps to control costs via medical peer reviews, negotiations with the treating provider or alternative dispute resolution. MCOs also can refer the injured workers to vocational rehabilitation programs or other sources to help expedite a successful return to work.
The TPA’s focus is on the employer, because the employer hired the TPA to protect its interests. The TPA will look at every claim and advise the employer whether to accept or reject the claim. If allowed, the TPA will look for reasons to reject certain issues throughout the life of a claim. Every time a claim occurs, it affects the employer’s rates. The TPA’s job is to continually monitor that claim and try to control it as best as possible to protect the employer’s experience rating.
Sometimes there may be a conflict between the TPA and the MCO. The MCO may indicate a person needs a medical procedure and the TPA may disagree. That leads to a difference in how they achieve their goals. An MCO’s goal is to medically manage the injured worker to get back to work. A TPA would sometimes rather litigate the injured worker back to work. The TPA’s goal is to protect the employer and reduce its exposure enough to put it into a group rating program with significant savings on the employer’s bottom line. To get an employer in that group, you have to protect its experience. One or two claims could eliminate the employer from being eligible for group rates.
