Workers Comp Medical Provider Networks Absence = Losing $1 Million

Workers comp medical provider networks can usually provide injured employees with the utmost care while saving medical treatment dollars.  A win-win-win situation between the injured employee, medical provider, and employer can be attained if a preset workers comp medical provider network is in place.

The most popular slide that I have used in presentations is below.  The names refer to no individual provider.  The names were changed for privacy concerns.

I was assigned this file as a troubleshooter in 1993 with the TPA that I was working with at the time.  The claim was a few years old.  That claims department had spent well over $420,000 when I took over the handling of the claim. The path of medical treatment is highlighted in green.

I converted the  1993 to 2022 dollars.  The converted dollars totaled $1 million.  That is paid dollars, not reserved dollars.  How did this happen?

(c) J&L Risk Mgmt Consultant -author’s own work-all fictitious names for privacy

Above Example – Wrong or No Use Of Workers Comp Medical Provider Networks

One of my first articles written on this website was Six Secrets To Saving On Workers Comp Costs.  The hallmark of that list is Medical Provider Networks.  I will borrow from my presentation on this slide.

How Does A Biofeedback Specialist Become A Treating Provider?

The green path is what happened on the claim.  An employee came into the employer’s office after wrenching their back while lifting some oilfield equipment.  They were complaining of numbness and tingling in their right lower leg.

As the green path above shows, the employee was told that the employer was too busy and to seek treatment on their own.

There is nothing wrong with biofeedback as a treatment.  The treatments were much more popular in the late 1980s and early 1990s.   The biofeedback specialist became the treating physician – of sorts.

Let us look at how that happened.

1. The employee goes home.  This is one of my consulting rules – if an employee has to stop their work, see that they go to one of the providers in your workers comp medical provider network.
2. The injured employee calls their family physician.  The family physician does not see them.  They are wisely immediately referred to a neurologist. That is why the family physician was not a green box.
3. The neurologist orders an MRI of their lower spine.  Two herniated disks are present.
4. The neurologist refers the injured employee to an orthopedic surgeon.
5. Due to the level of disc damage, the orthopedic surgeon brings in a neurosurgeon as the injury was considered severe.
6. A disc fusion surgery was also necessitated due to multiple levels of herniation.
7. The adjuster receives a Twilight Zone Phone Call from the surgery scheduler.  The first report of injury (FROI) was not yet filed by the employer with their TPA.  The adjuster had to call and ask for the FROI.
8. The injured employee requires 6 months – at a minimum- of physical therapy.
9. A pain management physician takes over the care due to the level of pain.  The pain management physician sees the employee three times a year.  The pain management physician is to treat the injured employee until they can be released back to the surgeons.
10. The pain management physician refers the injured worker to a biofeedback specialist that now becomes the main medical treatment provider on the file.   The physical therapist seldom sees the injured worker.

This is where I reviewed the file – $445,000 spent (not counting reserves) in 1993 dollars on a 1990 claim. 

What would you do with this file?  My answer will be in the newsletter next week.  Feel free to comment below on this interesting file that involved workers comp medical provider networks.

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.

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