Eliminating Third-Party Reviews Lowers Workers' Compensation Costs

Getting rid of third parties when handling workers' compensation cases can reduce missed workdays and lower health costs, according to a study published in the September issue of the Journal of Occupational and Environmental Medicine.

Dr. Edward Bernacki of Johns Hopkins University School of Medicine in Baltimore led a team of researchers to analyze how management by a specialized statewide network called Omnet Gold affected the care and outcomes of Louisiana workers' compensation claims.

Researchers found that claims managed by Omnet Gold were associated with significantly less missed work time than cases managed by networks that used a "utilization review" or oversight by the workers' compensation insurance company. Average number of missed workdays was 53 for workers managed in the network, compared to 99 days for traditionally managed claims.

The costs of care were also lower for claims managed in the network: about $12,500, compared with $20,400 for traditional claims. Average costs for medical care were $3,995 with Omnet Gold as opposed to $9,850 for traditional care. Other costs, such as management fees and legal expenses, were also lower with Omnet Gold.

"Utilization review seems to have little impact on the behavior of experience health care providers pre-selected for their ability to appropriately treat and manage workers' compensation cases," said Bernacki in the study.

Several studies have suggested that specialized health care networks can lower costs and disability in workers' compensation cases. Omnet Gold was created to see if such a network could produce similar savings on a statewide basis. A previous evaluation suggested that Omnet Gold did produce savings but, at the time, most of the cases were not yet closed the problem was not yet resolved or the injured worker was still receiving treatment.

This follow-up study supports the initial results by showing reductions in costs and missed work time for cases managed by a specialized network of health care providers. Early management by a specialist in treating injured workers most of whom were occupational medicine physicians resulted in significant reductions in lost time and costs in workers compensation.

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