Companion Property & Casualty whose parent company is Blue Cross & Blue Shield of South Carolina was established in 1984.

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1 Companion Property & Casualty whose parent company is Blue Cross & Blue Shield of South Carolina was established in Headquartered in Columbia, S.C., Companion Property & Casualty Insurance Group is an "A" (Excellent) rated organization by A.M. Best Co and is considered a national leader in property and casualty insurance and services. Companion offers workers compensation insurance (Assigned Risk, Voluntary, & TPA self insured), a variety of commercial package policies, commercial auto insurance, commercial property and commercial liability policies, third-party administration services (for workers compensation, liability and property coverages), and insurance for residential condominiums. Companion Property & Casualty does business in 47 states through a network of independent agents, brokers and business partners. 1

2 Network Development Demographics of Policy Holders Adequate specialty mix to meet needs of the population served Federal or State Requirements Network Maintenance Geo-mapping (policy holder locales compared to medical provider demographics) Establish rapport with provider office staff to assure timely provider updates Credentialing and Re-credentialing by an accredited credentialing verification organization Bill Review System 2

3 Incentives/Disincentives In-Network Providers first choice for directing care where allowed Adjusters/Nurse Case Managers have a good experience with the provider office will utilize them again Fee Schedules UCR Utilization Protocols Pharmaceuticals, Physical Therapy, Pain Management 3

4 Network Adequacy That includes: Medical Providers who have existing experience in Workers Compensation patient care and claims processing Geographically Accessible Timely Availability 4

5 WC Provider Network Walt Disney World Co. Who We Are 25,000 Acres = 40 square miles 8,700 Acres set aside for conservation ,500 Cast Members ,000 Cast Members 22 Resorts with over 24,000 rooms 784 Camping sites 4 Theme Parks 2 Water Parks Downtown Disney Disney s Wide World of Sports

6 Quality Standards Safety Courtesy Efficiency Show Our Environment On-Site Occupational Clinic Physician - Medical Care Coordinator Concentrated Population Insured with Large Deductible Self-Administer Claims Opted out of Managed Care

7 Why a Network? Quality of Providers Fee Schedule versus Contract Rates Balance Number of Providers with Demand Contractual Service Expectations Maximizing Benefits Clear Expectations Provider Education to Understand Roles Cost and Utilization Analysis Metrics Internally Generated Provider Relations Ancillary Services

8 The End!

9 WC PPO s: Panacea or Problem? Jennifer Christian, MD, MPH Webility Corporation Why a Network, Originally? Workplace injuries create a stream of workers needing health care. Injured workers and their employers expect / need help from insurers / TPAs to figure out where to go for care. Employers [often] and risk holders [always] want to keep work comp costs as low as possible. Healthcare provider revenue depends on patient volume, so they want to increase it. Insurers / TPAs are experts in insurance transactions: adjudication and paying claims. Setting up provider relationships takes

10 Today, most PPOs: Look for willing providers (mass mailings) Supplement with nominations from employer/tpa Get signed application / contract Enter information into provider database Negotiate discount on fees Check the credentials of the provider Provide demographic [and fee] data to payer [Apply discounts to provider bills] Handle updates and complaints Charge payer a % of savings Why The Focus on Discounts? High variability in charges among providers Provider fees assume single unit sales Low visibility of provider pricing to purchasers No incentive for workers to shop for value Employers feel unprepared to shop for value -- but want to minimize costs Dislike of highway robbery Why pay MSRP? An opportunity for middlemen to create a margin

11 How Well Is It Working? Focus on unit cost discounts ignores the impact of utilization (# of units provided) on total cost. Economic brutality approach and emphasis on money as the basis for relationship encourages providers to overutilize and play games. Healthcare costs are rising relentlessly. How Well Is It Working? Traditional PPO business models put them at odds with payer customers interest: reducing total medical costs reduces PPO income. Payer practices [ cherry picking rates among PPOs] are increasing friction with providers PPOs are: In a passive financial and data business; Not seen as part of the medical delivery

12 Why a Network, Now? Fewer workplace injuries create a smaller stream of workers needing health care. Injured workers and their employers expect / need help from insurers / TPAs to figure out where to go for care in order to get good outcomes. Employers [often] and risk holders [always] want to keep total work comp costs per episode as low as possible. Why a Network, Now? Healthcare provider revenue depends on patient volume, so they really want to increase it. Insurers / TPAs are experts in insurance transactions: adjudication and paying claims. Setting up provider relationships takes resources. Realigning incentives, optimizing utilization and focusing on improving outcomes requires a different approach and skill set.

13 New Approaches Different pricing models: PEPM (per employee per month) Network access fees Network management fees Different tools: Evidence-based guidelines Situation management tools: Communications with employer, payer, etc. Care coordination Tracking episode events and outcomes Provider report cards, feedback, coaching Different emphasis New Approaches Assembling the team of providers who will care for population of injured workers Coordinating team effort and collaboration with employer and insurer Emphasis is on supporting providers in delivering EBM care and achieving good outcomes Money is the provider s logical reward for doing this well Reduced costs are the employer s / TPA s reward for doing this well

14 New Approaches Different provider reimbursement models Pay full fees to providers who consistently contribute to good overall episode outcomes (ALL medical care PLUS indemnity) Greatly increase fees for initial care and for time spent on coordination and communication Reduce fees for procedures that have weak EBM support Sliding fees for procedures depending on their advisability per EBM guidelines /situation Monthly fees and case rates a la Prometheus Payment, Medical Home Model, etc. Different Skills New Approaches Evidence-managed management Evidence-based medicine Data interpretation Training, skill development Different name Maybe it s not a network

15 Examples Employer-specific MPNs, Florida & California Injury Net, Australia Centers of Occupational Health Excellence, Washington