At this year’s National Comp conference, we had the pleasure of speaking with several self-insured employers, i.e., employers that cover their own injured workers’ care and benefits rather than paying premiums to a workers’ comp insurer.

Many of these employers already suspected that their workers’ comp vendors may not be serving them well. Far fewer understood how certain types of vendors may harm injured employees and drive up workers’ comp costs. Those vendors include:

•  Medical bill review companies, which review and adjust reimbursement to providers
•  Medical Provider Networks (MPNs), which restrict the employer’s workers to a chosen circle of healthcare providers
•  Utilization Review (UR) organizations, which dictate whether injured employees receive the care their treating physicians recommend

Employers were aware that bill reviewers could be significantly overcharging them, for example, by applying a contractual PPO discount where a simple fee schedule adjustment would suffice, then billing the employer a percentage of the resulting “savings.”

Few, however, understood how UR and MPNs can delay and deny medical care, potentially exacerbating employees’ injuries, dragging out claims, and worsening outcomes. In too many cases, delayed care drives disability costs and lost productivity when prompt, appropriate treatment could have returned the injured employee to work.

Unfortunately, a for-profit healthcare system’s incentives don’t always align with the needs of injured workers or employers. A cynical observer would note that the longer an injured worker remains injured, the more profit vendors (many owned or backed by private equity) can potentially generate.