Quality-Based Care

Bundled Care’s Place in Workers’ Comp

Bundled care programs are one alternative care model emphasizing quality over quantity.
By: | August 8, 2016 • 5 min read

Medicare continues wielding its leverage to push the nation’s medical systems away from fee-for-service arrangements toward alternative payment models expected to improve care quality.

But one mainstay alternative medical treatment model — bundled care— is off to a slow start in workers’ compensation as implementation hurdles remain.

Very few bundled care models have emerged for treating injured workers. Yet workers’ comp experts expect that the bundled payment concept will eventually flow into more treatments for workplace injuries.

Jacob Lazarovic, senior VP and chief medical officer, Broadspire

Jacob Lazarovic, senior VP and chief medical officer, Broadspire

“I think we will get there,” said Jacob Lazarovic, senior VP and chief medical officer at Broadspire, a third party administrator with a large workers’ comp book of business.

“There will be models that work,” he continued. “There will be entities that manage to put it together. I am pretty sure we are going to see an expansion of programs,” including a potential bundled care program Broadspire is developing for injured worker outpatient surgeries.

Bundled care and bundled payment refers to the coordinated delivery of all medical provider services needed to address a specific illness or injury. A medical group or hospital, for example, would bundle all services including imaging, anesthesia, surgery, follow-up doctor visits and physical therapy for repairing a knee or hip.

They would do so for one single bundled fee that includes financial incentives holding providers accountable for quality outcomes.

In contrast, under fee-for-service arrangements that dominate U.S. health care, claims payers receive bills for each patient interaction with a provider, encouraging treatment quantity over quality.

But Medicare is aggressively pushing nationwide adoption of value-based care delivery models, including bundled care. By the end of 2018, Medicare wants half of its payments flowing to alternative payment models.

The Centers for Medicare and Medicaid Services continues unfurling mandates to make that happen. In July, it announced that hospitals in nearly 100 markets would be accountable for the financial and quality outcomes associated with bypass surgeries and heart attacks.

By bundling care for those treatments Rising provides insurers, TPAs and self-insured employers greater cost predictability, administrative efficiency, and “concierge” level of service” for injured worker.

That follows a 2015 announcement impacting nearly 800 hospitals with a mandate for bundled programs for hip and knee replacements.

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Experts frequently cite the government efforts among reasons they expect bundled payments will eventually spread from Medicare arrangements to private contracts such as those arranged to care for group health and workers’ compensation claimants.

Medicare’s efforts, for example, should help accustom medical provider groups to contracting with each other to arrange bundles.

“With Medicare we’ve seen quick diffusion of bundled payments,” said Shawn Matheson, a manager at Leavitt Partners, a health care consultant and intelligence firm. That will help private industry claims payers evaluate CMS challenges and successes as a base for additional program designs, Matheson added.

Developing Bundled Programs

For now, though, several workers’ comp observers said they can only cite two or three existing bundled care programs for treating worker injuries while other efforts are under development.

Treatment at the University of California Los Angeles’ Center for Behavioral & Addiction Medicine, for instance, is available through a bundled care program that R&Q Healthcare Interests arranged for workers’ comp claims payers.

“But it is important to recognize there are some difficult problems to be solved in comp that start with return to work and how you hold people accountable.” — David Deitz, managed care expert, David Deitz and Associates

R&Q’s program for injured worker pain and addiction treatment is the first bundled offering the company expects to develop under an existing contract it has with the entire University of California system, said Bill Lape, CEO at R&Q Healthcare, a unit of Randall & Quilter Investment Holding Ltd.

Broadspire, meanwhile, teamed up with a medical network provider to explore developing a pilot program of ambulatory surgery facilities offering bundled services for injured-workers, Lazarovic said.

Robert Evans, VP of repricing solutions, Rising Medical Solutions

Robert Evans, VP of repricing solutions, Rising Medical Solutions

Ideally, the arrangement would allow the collection of metrics for measuring outcomes such as patient satisfaction and return to work.

And Rising Medical Solutions now offers workers’ comp surgery care programs in regions of Illinois, Florida, New Jersey and Georgia. Those regions generally experience greater variation than normal in the pricing of routine surgeries for treating problems such as knee injuries and carpal tunnel syndrome, said Robert Evans, VP of repricing solutions at Rising.

By bundling care for those treatments Rising provides insurers, TPAs and self-insured employers greater cost predictability, administrative efficiency, and “concierge” level of service for injured workers, Evans said.

Evans will speak in November at the National Workers’ Compensation and Disability Conference & Expo in New Orleans as part of a panel discussion on strategies for bringing value-based care, like bundled arrangements, to workers’ comp.

Broadspire’s Lazarovic will also speak at NWCDC during a presentation titled “How to Use a Medical Expert So You Don’t Get Burned on Causation.” The conference agenda is available at www.wcconference.com.

Fee-for-service’s entrenchment in workers’ comp medical care, meanwhile, and work comp’s emphasis on issues that don’t exist in group health, like return to work, are slowing adoption of bundled care for injured workers.

David Deitz, managed care expert, David Deitz and Associates

David Deitz, managed care expert, David Deitz and Associates

Bundling care for ailments commonly diagnosed among injured works, like carpal tunnel syndrome, would be straight forward, said David Deitz, a managed care expert at David Deitz and Associates. But holding medical providers accountable for return to work remains a challenge.

Accountability could be difficult to enforce if, say, medical providers repair a worker’s injury as expected, but for some other reason the employee decides not to return to the job, Deitz elaborated.

“I think there is a really difficult problem here [but] it’s not insolvable,” Dietz said. “But it is important to recognize there are some difficult problems to be solved in comp that start with return to work and how you hold people accountable.”

Other obstacles to implementing bundled programs for injured workers include work comp’s state-by-state regulation and entrenched reliance on medical fee schedules based on fee-for-service arrangements.

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

More from Risk & Insurance

More from Risk & Insurance

2017 Risk All Stars

Immeasurable Value

The 2017 Risk All Stars strengthened their organizations by taking ownership of improved risk management processes and not quitting until they were in place.
By: | September 12, 2017 • 3 min read

Being the only person to hold a particular opinion or point of view within an organization cannot be easy. Do the following sound like familiar stories? Can you picture yourself or one of your risk management colleagues as the hero or heroine? Or better yet, as a Risk & Insurance® Risk All Star?

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One risk manager took a job with a company that was being spun off, and the risk management program, which was built for a much larger company, was not a good fit for the spun-off company.
Rather than sink into inertia, this risk manager took the bull by the horns and began an aggressive company intranet campaign to instill better safety and other risk management practices throughout the organization.

The risk manager, 2017 Risk All Star Michelle Bennett of Cable One, also changed some long-standing brokerage relationships that weren’t a good fit for the risk management and insurance program. In her first year on the job she produced premium savings and in her second year is in the process of introducing ERM company-wide.

Or perhaps this one rings a bell. The news is trickling out that a company is poised to dramatically expand, increasing the workforce three- or four-fold. Having this knowledge with certainty would be a great benefit to a risk manager, who could begin girding safety, workers’ comp and related programs accordingly. But things sometimes don’t work that way, do they? Sometimes the risk manager is one of the last people to know.

The Risk All Star Award recognizes at its core, creativity, perseverance and passion. The 13 winners of this year’s award all displayed those traits in abundance.

In the case of 2017 Risk All Star winner Steve Richards of the Coca-Cola Bottling Company, the news of an expansion spurred him to action. He completely overhauled the company’s workers’ compensation program and streamlined its claim management system. The results, even with a much higher headcount, were reduced legal costs, better return-to-work experiences for injured workers and a host of other improvements and savings.

The Risk All Star Award recognizes at its core, creativity, perseverance and passion. The 13 winners of this year’s award all displayed those traits in abundance. Sometimes it took years for a particular risk solution, as promoted by a risk manager, to find acceptance.

In other cases a risk manager got so excited about a solution, they never even considered getting turned down. They just kept pushing until they carried the day.

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Butler University’s Zach Finn became obsessive about what he felt was a lackluster effort on the part of the insurance industry to bring in new talent. The former risk manager for the J.M. Smucker Co. settled on the creation of a student-run captive to give his risk management students the experience they would need to get hired right out of college.

The result was a better risk management program for the university’s College of Liberal Arts and Sciences, and immediate traction in the job market for Finn’s students.

A few of our Risk All Stars told us that the results they are achieving were decades in the making. Only by year-in, year-out dedication to gaining transparency about her co-op’s risks and learning more and more about her various insurance carriers, did Growmark Inc.’s Faith Cring create a stalwart risk management and insurance program that is the envy of the agricultural sector. Now she’s been with some of her insurance carriers more than 20 years — some more than 30 years.

Having the right idea and not having a home for it can be a lonely, frustrating experience. Having the creativity, the passion and perhaps, most importantly, the perseverance to see it through and get great results makes you a Risk All Star. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and passion.

See the complete list of 2017 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]