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Workers Comp PPO Networks – Are They Worth It?

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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.

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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. 

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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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One Response

  1. We use CorVel, major upgrade over our old provider network – their bill review is delivering better results too.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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