AASCIF LAW CONFERENCEAASCIF LAW CONFERENCEOCTOBER, 2005OCTOBER, 2005

Building a Better Workers’ Comp System

House Bill 7

© 2005 Texas Mutual Insurance Company

HB 7 Goals

• Improve return to work (“RTW”) outcomes

• Enhance access and quality of care

• Control costs

• Create a more efficient system

© 2005 Texas Mutual Insurance Company

Why Networks?

• Quality of care

• Return to Work focus

• Insurance costs

Health Care Networks

• Carriers may establish or contract with health care networks

• Employers may elect network coverage

• Texas Department of Insurance will certify networks– Must adopt rules by 12/1/05– Will accept applications beginning 1/1/06

© 2005 Texas Mutual Insurance Company

Employer Responsibilities

• Employers must provide notice of network requirements

• Employee acknowledgment form– Employer responsible for employee signature– TDI will adopt rules regarding forms

• After notice is given, the employee is subject to network requirements whether or not the form was signed.

© 2005 Texas Mutual Insurance Company

Employee Requirements• Network maintains list of treating and referral docs

– Network designates treating doctor specialties

• Treating doctor may make referrals to out-of-network providers if medically-necessary services are unavailable in the network.

• Workers must select treating doctor from network list – Existing injured workers are automatically in the

network whether or not employer has elected networks.

– May select previous HMO doctor if doc agrees to abide by network terms & guidelines

© 2005 Texas Mutual Insurance Company

Network Responsibilities

• Network duties:– Contract with providers for provision of health

care services– Operate a quality improvement program– Provide credentialing function

Network Responsibilities

• Networks must adopt treatment guidelines, and individual treatment protocols:– Must be evidence-based, scientifically valid and

outcome-focused;– Must reduce inappropriate or unnecessary care while

safeguarding necessary care.

• Networks must adopt return-to-work guidelines.

Network Responsibilities

• Networks do not assume financial risk– i.e., no capitation.

• Networks do not have to take “any willing provider.”

• Network provider reimbursement is determined by contract.

• Carrier and network may not use any financial incentive as an inducement to limit medically necessary services.

Rating Issues• Commissioner must report to legislature

on effect of the bill on affordability and availability of workers’ comp insurance, including projected employer savings and other results.

• Commissioner has broad authority over rates and premiums.

© 2005 Texas Mutual Insurance Company