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Press Release

Contact:

Bob Young
510-251-9470

For Release:

December 17, 2008

Medical Provider Networks and Medical Benefit Delivery AY 2002 - 2007

Use of physician networks in California workers' compensation, which nearly doubled in the first year after the state lawmakers passed reforms in 2004 that allowed development of Medical Provider Networks (MPNs), is continuing to increase, and is starting earlier in the life of a claim, according to a new California Workers' Compensation Institute (CWCI) Research Update. CWCI's analysis of medical visit data from nearly 1.1 million California work injury claims with accident year (AY) 2002-2007 injury dates, found that use of networks to treat injured workers rose from 1 in 3 first-year outpatient doctor visits for 2002 job injuries to nearly half of all visits for 2004 injuries-the first claims in which treatment in the initial 12 months could have shifted to MPNs. The rate then rose to 60% of doctor visits for 2005 work injuries, and to 63% of the doctor visits for 2006 injuries.

Prior to MPNs, employers usually directed injured workers' treatment for the first 30 days post injury, but under reform, employers with MPNs retain medical control for the life of the claim. To gauge the impact of expanded medical control on network utilization, CWCI measured the proportion of first-year visits to network providers within and beyond 30 days of injury. Even before the reforms, PPO and Workers' Comp Health Care Organization networks represented roughly 2/3 of physician-based inpatient medical visits in the first 30 days post injury. That rate inched up to 68.2% for 2005 injuries and to 69% for 2006 injuries, but the AY 2007 result pegged network utilization for the first 30 days at more than 74%, a move that suggests that employers may now be focusing more on getting workers into networks from the start of the claim. Meanwhile, use of networks for post-30 day visits rose from about 23% for AY 2002 claims to nearly 36% for AY 2004 claims, then climbed to almost 59% for AY 2006 claims, pointing to greater medical control under MPNs as the key to increased network utilization in California worker's compensation.

The growth in network utilization is also evidenced by the growth of payments to networks, which rose from less than 1/3 of first-year visit reimbursements for 2002 job injuries to 38% for 2004 injuries, then jumped to about half of all first-year visit payments for 2005 and 2006 injuries - an increase that also was driven by the growth in payments to networks for treatment beyond 30 days. The study notes that networks account for a lower percentage of payments than of visits, which is due at least in part to discounts offered by network providers.

CWCI's study, "Analysis of California Workers' Comp Reforms: Part 2: MPNs and Medical Benefit Delivery AY 2002-2007 Experience," features tables with AY 2002-2007 network utilization and payment rates for all physician-based treatment visits within and beyond 30 days of injury, as well as separate data for six treatment categories. The full report is posted in the Research section at www.cwci.org.