Workers' Comp Reform

Reform Impacts ASC Costs

Reforms have caused payments to ambulatory surgery centers to plunge — even further than expected.
By: | April 24, 2014 • 2 min read

California’s efforts to reduce costs in its workers’ comp program have apparently been successful in at least one area. Average facility fee payments to ambulatory surgery centers (ASCs) have declined 26 percent per episode and 28 per procedure — more than researchers had projected.

S.B. 863 included provisions to reduce the maximum facility fees for services performed in ASCs from a maximum of 120 percent of the Medicare fee to 80 percent. Analysts had predicted the change would reduce ASC payments by 25 percent.

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“Thus far, the change in the ASC fee schedule has achieved its intended objective of reducing one aspect of workers’ compensation medical costs,” according to a new study. “Moreover, the study found no evidence of changes which would potentially undermine the fee schedule savings.”

The study included two independent sets of data from the California Workers’ Compensation Institute and the California Workers’ Compensation Insurance Rating Bureau. The authors measured average amounts billed and paid for workers’ comp outpatient surgery services rendered in the year before adoption of the revised fee schedule and the first six months after.

The researchers looked for:

  • Fees billed
  • Fee schedule adjustments
  • Network discounts
  • Payment per episode
  • Mix of services
  • Service intensity
  • Sites of service

The savings came despite an increase in the average amount billed per ASC procedure — $3,183 to $3,386, a 6.4 percent increase. However, when the conversion factor multiplier from 1.20 to 0.80 was applied, the average ASC fee schedule allowed declined by nearly 31 percent from $977 to $674. The result was a wider spread between the billed and scheduled amounts for ASC services from $2,206 in 2012 to $2,711 in 2013.

The authors also looked at per episode costs. Episodes of care were defined as all procedures and ancillary services on a specific claim, specific bill, and a specific date of service. For example, an arthroscopy episode could include data for both the arthroscopic procedure as well as a debridement procedure, or removal of tissue from the surgical area, that was performed on the same date and included in the same bill.

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“The average amount paid for ASC services per episode declined 26 percent from $3,291 to $2,443 following the adoption of the fee schedule changes in January 2013,” the report said.

The mix of services changed little after the fee schedule change. The researchers found only minor shifts in the distributions of outpatient procedures, indicating the fee schedule changes had little effect on the types of ASC procedures performed.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]