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Southern Association of Workers’ Compensation Administrators Convention 2007. A Texas Perspective Lisa Corless Texas Mutual Insurance Company. Agenda. Introduction Texas Workers’ Comp System The Case for Change House Bill 7: Changes the System Health Care Networks

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southern association of workers compensation administrators convention 2007

Southern Association of Workers’ Compensation Administrators Convention2007

A Texas Perspective

Lisa Corless

Texas Mutual Insurance Company

agenda
Agenda
  • Introduction
  • Texas Workers’ Comp System
  • The Case for Change
  • House Bill 7: Changes the System
  • Health Care Networks
  • Other Texas initiative; eBilling
  • What Does the Future Hold?
  • Questions
about texas mutual
About Texas Mutual
  • Texas Mutual has been serving the state of Texas since 1991 after the Texas Legislature first chartered the Texas Workers’ Compensation Fund.
  • In 2001, the Legislature redesigned the company’s charter and the company was renamed Texas Mutual Insurance Company.
  • Texas Mutual is the largest workers’ compensation underwriter in Texas; underwrites approximately 28% of the Texas market.
top 10 workers compensation carriers in 2006
Top 10 Workers’ Compensation Carriers in 2006

Source: Best’s Statement File Supplement – Insurance Expense Exhibit (IEE) – P/C 2006

texas employment factoids
Texas Employment Factoids
  • Texas population: 23,507,7831
  • # of Texas employers: 426,8462
  • # of Texas employees: 9,932,4842
  • Total Texas

WC premium: $2,726,560,3623

  • Texas injury rate

per 100 employees: 3.64

1 – Source: United States Census Bureau (July 2006 estimate).

2 – Source: Texas Workforce Commission Quarterly Census of Employment and Wages, 4th quarter 2006. Non-government employers with Texas UI Coverage.

3 – Source: Texas Department of Insurance Quarterly Legislative Report on Market Conditions, 4th Quarter 2006.

4 – Source: Texas Department of Insurance, Division of Workers’ Compensation (2005 Nonfatal Injury Rate Data).

texas workers comp system
Texas Workers’ Comp System
  • Only state in nation without mandatory comp
  • Employers have the choice; Insured or “Non-subscriber”
  • Who cannot non-subscribe?
    • Public employers
    • Certain entities licensed or regulated by TxDOT
    • Construction companies – public project
  • Approximately 107,000 Texas businesses are non-subscribers1

1 – Source: TXANs website

percentage of texas employers that are non subscribers 1993 2006
Percentage of Texas Employers that are Non-subscribers, 1993-2006

Source: Survey of Employer Participation in the Texas Workers’ Compensation System, 1993 and 1995 estimates from the Texas Workers’ Compensation Research Center and the Public Policy Research Institute (PPRI) at Texas A&M University; 1996 and 2001 estimates from the Research and Oversight Council on Workers’ Compensation and PPRI; and 2004 and 2006 estimates from the Texas Department of Insurance Workers’ Compensation Research and Evaluation Group and PPRI.

wcri 1 pre reform performance baselines for texas
WCRI1 Pre-Reform Performance Baselines for Texas

3

2

1 Workers’ Compensation Research Institute, Cambridge, Massachusetts

2 Average total cost less average benefit delivery expense

3 Average benefit payment less average indemnity benefit

wcri 1 pre reform performance baselines for texas1
WCRI1 Pre-Reform Performance Baselines for Texas

3

2

1 Workers’ Compensation Research Institute, Cambridge, Massachusetts

2 Average total cost less average benefit delivery expense

3 Average benefit payment less average indemnity benefit

wcri 1 research texas highest in payments per claim
WCRI1 researchTexas Highest in Payments per Claim

1 Workers’ Compensation Research Institute, Cambridge, Massachusetts

wcri research con t
WCRI Research (con’t.)
  • Texas and California versus Massachusetts and Pennsylvania
  • Texas and California results
    • Recovery rates – Poorer
    • Return to work – Poorer
    • Access – Similar or less
    • Satisfaction – Similar or less
texas comp reform necessary
Texas Comp Reform Necessary
  • Anecdotal information from
    • Injured workers
    • Physicians
    • Carriers
  • WCRI data
    • Statistical information
      • Costs
      • Injured worker satisfaction
  • “Broken” Workers’ Compensation system
legislative session 2005

Legislative Session2005

Enacted House Bill 7 Into Law

house bill 7 system goals
House Bill 7 System Goals
  • Improve return to work outcomes for injured workers
  • Enhance access and quality of medical care
  • Control workers’ compensation costs
  • Create a more efficient system
house bill 7 overview
House Bill 7 Overview
  • Introduced Health Care Networks
  • Treating doctors to use treatment and disability guidelines
  • Emphasis on return to work
    • Appropriate
    • Stay at work
house bill 7 overview con t
House Bill 7 Overview (con’t)
  • Performance Based Oversight
    • Insurance Carrier Report cards
    • Carriers earn designations
      • High / Average / Low Performer
    • First Report card due August/September 2007
    • Published on regulator website
health care networks
Health Care Networks
  • Carriers may establish or contract with health care networks
  • Employer may elect network
  • Network selects who can serve as treating doctors
    • Injured worker selects treating doctor from network
  • TDI must certify
  • Responsibilities
certified networks
Certified Networks
  • 27 Networks

Certified

    • Smallest: 1 county
    • Largest: 208 counties
health care networks1
Health Care Networks
  • First Network Certified late March 2006
    • Texas Mutual philosophy
    • Most Carriers Adopting “Wait and See Attitude”
  • Learning Curve for System
  • Network Report Cards
    • August/September 2007
  • Preliminary thoughts on Network efficacy
other texas initiatives ebilling
Other Texas InitiativeseBilling
  • Texas will become the first state to mandate carrier requirement to accept eBilling from medical providers
  • Universal format 837
  • Effective January 1, 2008
  • eBilling Challenges
    • Workers’ Comp is different from Health Care
  • EFT next!
what does the future hold
What does the future hold?
  • Impact of Networks
    • Return-to-Work Outcomes
    • Total Claim Costs and System Satisfaction
  • Performance Based Oversight
  • Increased competition for business