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Workers Comp Physician Networks Importance Reaches Critical Mass


Workers Comp Physician Networks Now More Critical to Cut Comp Costs

One of the Six Keys or Secrets to cut your work comp costs becomes even more important now due to a fact covered later in this article.   Workers Comp physician networks are a great risk management technique that involves little cost and a little effort to put in place.

pic of workers comp physician networks IV bag
Wikimedia – Smokefoot

I wrote the Six Keys as Four Keys that I saw as important when adjusting claims in 1988.   I then added two more as time passed and I was exposed to more workers comp reading material – thanks Interweb.

Workers Comp physician networks became your go-to way as an employer after safety.  Yes, the old boring slogan – the least costly accident is the one that never happens- remains the best way to cut your workers comp costs.

I have given the presentation at least 25 times on how I picked up a file from a suddenly unemployed adjuster.  Reviewing the file was a shocker as the main treating physician was a biofeedback specialist (nothing against those practitioners).    When I show a diagram of an out-of-control medical treatment network, many mouths open wide in astonishment.   A $400 claim turned into a $745,000 claim due to no medical treatment network.

Setting up the Network  – Quick Primer

One main consideration to cover is where the injured employee should treat in the general vicinity of their workplace.   A physician’s office must communicate well.

Treating physician communication covers:

  • Sending timely medical reports and bills
  • Answering claims adjuster inquiries
  • Understanding the job description for a return to work
  • Communication with rehabilitation nurse (if assigned)
  • Referring to a second-level physician in the network (if necessary) – (i.e.) Orthopaedic Surgeons, etc.
  • In emergency situations, medical treatment networks should be ignored
  • The best person on earth to ask about immediate great medical treatment – the claims adjusters.

Adjusters who are reading this will add in at least a few more bullet points.

Salient Point On States With Employee Choice of Care

Some states do not allow direction of medical treatment whether by a panel or directed by the employer.    Most studies have shown that injured employees will actually still see an employer-recommended physician even if they can choose the medical provider.

I apologize for not sourcing those studies.

Why Is A Workers Comp Physician Network Critical Now?

WCRI, NCCI, WCIRB,  any of the independent rating bureaus, and many studies have pointed out a very major fact which is:

  • # of claims severely decreasing – good news
  • Cost of claims severely increasing – bad news for risk per claim

Check slides 23 and 24 of this NCCI presentation that I attended last year.   These are national figures.   You may want to read the whole group of slides.  It will be worth your time.


The average claim according to a WCRI nationwide study was $42,000+.   When an employee reports an injury to their respective employer, the time to take action is RIGHT THEN.

The employer at that time needs to:

  • Direct medical care to your network or;
  • Offer a panel is states that require a panel or;
  • Recommend a physician in states where the employee can those their medical treatment

Each claim now impacts your E-Mod or budget (self-insureds) more every policy year.   Self-insureds are paying more per claim directly out of a budget.

Bottom Line – Controlling medical costs upfront by referring an employee to a trusted industrial-minded physician cut your work comp costs dramatically.  With the number of claims decreasing, an opportunity to control losses may not as often come an employer’s way as in the past.


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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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