Workers Comp PPO Networks vs PPO Reduction Stacking
Are the Worker Comp PPO Networks worth the trouble? Workers Comp medical treatment networks have become a very diverse network. It was too long ago that there were only physician and hospital networks serving the WC community. That time has long since passed.
There is a network for almost any type of medical service. There are now networks that administer to other networks. The subject covered today is actually not the specialty networks. I am referring to the doctor and hospital networks only. I will cover specialized networks in the future.
Most medical treatment networks are associated with the medical bill processing and review company that carriers or TPA’s provide when an employer utilizes their services. The cost is sometimes bundled in the claims cost or unbundled as a separate service.
Most Preferred Provider organization (PPO) networks will reduce the bill 15% in addition to and after the fee schedule reduction. That is the norm and may not apply to each state or situation. One of my concerns is that too much emphasis is placed on getting the 15% while the medical costs of using a network provider may end up costing over 1000% more than the 15% reduction.
If a physician in the network writes the employee out of work for 6 months, when there was a modified duty job available, the aforementioned 15% becomes an insignificant and unjustifiable savings.
PPO reduction stacking now causes great concern amongst the providers. In other words, how many 15% reductions can be stacked against a provider?
My recommendation is to use a network that already has the industrial minded facilities that you are working with on a daily basis. You will have a win-win-win-win-win situation which is very rare in Workers Comp.
The wins are:
- Employees receiving proper trusted medical treatment
- Fee schedule is applied
- PPO discount is applied
- More rapid return to work
- Excessive medical treatment costs are reduced
- Communications between carrier/TPA, employer, employee and medical providers are easily facilitated
I am not inferring that only familiar providers in a network are to be used overall. The files that we have reviewed seem to have reduced costs for medical treatment when the industrial-minded provider is in the PPO network.
If one of these familiar providers is not in your network, you can always nominate them with the network. The network will very likely reach out to them to see if they want to join the PPO network.
There are EPO (Extra Preferred Provider) networks that can save even more on the medical treatment. They are becoming more popular each year. These companies carve out a medical treatment network out of your existing PPO network.
The bottom line is Workers Comp PPO networks can be a great cost saver when used judiciously.
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