No question is ever silly. Never hesitate to ask about anything you don't understand.
Which brings us to field this one: Why does Ohio operate with MCOs and health partnership programs (HPP) at all? Isn't that just adding more layers to the system and making things more complicated?
The answer is that HPP allows competition and secures freedom of choice, which should drive up the quality of health care and contain costs. The state of Ohio is convinced that HPP will reduce overall health care costs to treat injured workers, and that lower claims costs will translate to lower premium costs for employers.
And the system is working. Since HPPs and MCOs began providing medical claims management, employers have saved hundreds of thousands of dollars in health care costs and premiums. Employers must expect that their managed care vendor continually stay abreast of their business-specific situations and watch for opportunities that will help them save money.
Early reporting of claims can help cut costs. Statistics show that the quicker a claim is filed and a determination made, the lower the total costs of that claim will be. In the long run, early reporting results in lower workers' compensation costs overall. And lower claims costs translate to lower premiums for the employer.
Lower costs can also be achieved through group or retrospective rating programs, transitional work grant programs and a strong commitment to safety. Is your workers' comp managed care vendor educating you? Are value-added services being offered to you and your staff?
Group rating plans allow employers who operate similar businesses to group together to potentially achieve lower premium rates than they could on their own. Each group is sponsored by an organization, such as a trade association or chamber of commerce.
The sponsoring organization must submit a safety plan to the Bureau of Workers' Compensation each year, and the group must demonstrate common purpose and possess results from safety and loss-control practices. The sponsoring organization forms the group and has control over which members will participate.
BWC adjusts rates for group members taken as a whole, as if the group were one big company. Each year, BWC reviews each group rating application to ensure that it meets the criteria for group rating. In 2002, the average discount for participation in group rating was 70 percent.
Another option is a retrospective rating plan that allows an employer to assume a portion of the risk in return for a possible reduction in premiums. The greater the assumed risk, the greater the potential reduction in premiums.
The plan is an excellent match for the employer who was thrown into a penalty-rated status due to only one or two employee injuries, possibly catastrophic ones. Those who have a consistent claims history and proven safety practices will benefit the most from retrospective rating.
The employer can customize the retrospective rating plan to control the amount of risk assumed and the potential savings by selecting the maximum premium and maximum claims costs he or she is willing to pay. Employers may benefit from retrospective rating because of lower initial premiums and realized cash flow advantages, which increase as premiums are saved.
Management teams are facing new workers' compensation challenges every day that significantly impact their business as a whole. The quality of production, the margin of profitability and the ability to provide service at its finest are only a few of the paramount concerns.
What can you do to help secure your company's' fate? Looking at the factors that impact the workers' compensation systems is the place to begin.
Is your workers' comp managed care vendor starting at the beginning? Is your business as important to it as it is to you? Is it providing customer service or just servicing customers?