WCRI Study: Few New Initiatives Launched in Workers' Compensation Arena

The adoption of new managed care and medical cost containment initiatives for workers compensation slows as the focus shifts to evaluating programs now in place.

The adoption of new managed care and medical cost containment initiatives in the nation's workers compensation system has slowed in recent years as the focus has shifted to evaluating programs now in place, according to the Workers Compensation Research Institute (WCRI).

The institute recently released the seventh edition of "Managed Care and Medical Cost Containment in Workers' Compensation: A National Inventory, 2001-2002." The National Inventory also found:

  • There have been few new utilization management initiatives enacted or promulgated since 1997.
  • No new jurisdiction has mandated the use of managed care in workers' compensation since 1997 and, in fact, some states have eliminated such a mandate.
  • There is a large and increasing variability of fee schedule levels across states, particularly those states with high fee schedule rates while those at the low end remain static.

"The rapid growth of workers' compensation medical expenditures in the early 1990s led to growth in the number and variety of medical cost containment laws and regulations adopted between 1992 and 1997," said Dr. Richard Victor, executive director of the Cambridge, Mass.-based WCRI. "However, since 1997, there have been few new initiatives."

For example, since 1997 only a handful of new utilization management initiatives have been implemented by law or regulation. Also since 1997, no jurisdiction has mandated the use of managed care and no new jurisdiction has added treatment guidelines as a cost-containment method.

In fact, Florida eliminated its managed care mandate system-wide and Vermont dropped its managed care mandate for the residual market.

The National Inventory comprehensively documents what strategies are currently authorized and in use in each jurisdiction as well as the programs in place to evaluate "what works."

Examples of evaluation efforts include the development and pilot test of a patient evaluation survey in California; the measurement of the effect of treatment guideline usage on medical outcomes and costs in Colorado; the identification of measurable indicators to determine the effect of managed care plans on the quality of care in Florida; and a project on quality of care outcomes in Washington.

"These evaluation efforts, in combination with the lack of new types of cost containment initiatives, suggest an emerging tendency to take a close look at the effects and results of past innovation before moving forward with a new round of activities," observed Ramona Tanabe, the report's lead author. "Another area of interest is the impact of cost containment initiatives on the quality of care received by injured workers," she said.

The new edition of the National Inventory updates information on initiatives in place or planned as of May 2001. The cost containment strategies reviewed by jurisdiction include: medical few schedules, regulation of hospital charges, medical and hospital bill review, choice of provider, treatment guidelines, utilization review/management and managed care.

For more information about the National Inventory, visit the WCRI Web site at www.wcrinet.org/whats_new.html.

edited by Sandy Smith ([email protected])

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