2 0 0 8 I s s u e 2 ALPHA Fund Quest �

tHe VALue ProPosition-Understanding the benefit associated with a decision–A simple concept, applied by most everyone on a daily basis, and sometimes without our even realizing it. But what about decisions involving things we may not be familiar with-how does one come to understand those value propositions? We think the answer begins with information presented in a way that is easily understood. This edition of Quest attempts to do just that.

In his “Letter from the COO”, Dave McGhee announces a second distribution of Fund surplus, provides his perspective on Workers’ Compensation trends for 2009, and discusses why effective claims management is the key to controlling future costs.

We’ll explore the process of Third Party Administrator selection and describe how an efficient TPA can save you money, how an inefficient TPA can cost you money-and how to measure the performance of the TPA. A little accountability never hurts!!

Finally, you will also note an update on the newly formed DELTA Group and how Kaweah Delta Health Care District saved thousands by becoming a DELTA Group participant.

One of the goals of the ALPHA Fund is to educate employers on how Workers’ Compensation is a manageable cost. Have a question? Give us a call (800) 655-2667, ext. 226, and while the phone is ringing think about our new tag line; “Proven Performance-Shared Success”, look inside.

It’s All About FOCUS… PDCA That Is!

or those in healthcare, Continuous Quality Improvement (CQI) or Process Improvement (PI) is

nothing new. In fact, ALPHA Fund Participants routinely use the “FOCUS-PDCA” or some variation of this model to improve organizational processes and outcomes.A brief refresher on the FOCUS-PDCA Model reminds us that the letters stand for the following:

Find an Opportunity to ImproveOrganize a Team That Understands the ProcessClarify the Current Knowledge of the ProcessUnderstand the Cause of Process VariationSelect the Process Improvement

Using the FOCUS-PDCA model to improve patient safety and clinical outcomes is almost considered routine. However, the same can’t be said for its use as a tool to improve employee health and safety. Recognizing that this is the case, ALPHA Fund Loss Prevention staff actively works with Participants to demonstrate how this important process improvement model is effective in improving processes from either side of the healthcare safety equation. One example of how this is being accomplished is to use the framework of the FOCUS- PDCA model to reduce the frequency and severity

Plan the ImprovementDo the Improvement, Data Collection, & AnalysisCheck ResultsAct to Hold the Gain

2008Issue2Contents: 2 Passing the “Employee or Contractor” Test

6 Selecting a TPA: The Relationship of Price to Value

7 Kaweah Delta Health Care District Joins DELTA Group

�0 ALPHA University Update

F

continued on page 4

ALPHA Fund Quest 2 0 0 8 I s s u e 22

The ramifications of a misclassification can be expensive and difficult to remedy in the eyes of either federal (for tax purposes) or state agencies (for tax, employment and insurance purposes). The issue of properly classifying a worker who may not easily fit the “employee” status has garnered so much attention of late, that there have been several bills authored last

Legislative session on the topic, and at least one, SB 1583 (Corbett) made it to the Governor’s desk. To assist in answering the question of “employee or independent contractor?” one aspect is clear — it depends on a number of factors, all of which must be considered, and none of which is controlling by itself. No one aspect of the service relationship will provide the answer.

To begin our search for answers, we first turn to the California Labor Code Section 3353, which states, “Independent contractor” means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only (emphasis added) and not as to the means by which such result is accomplished. What this means is a person who is paid compensation to achieve a certain result without regard to how and when the work is done qualifies as an independent contractor. However, more often than not, the “control” of the principal and the “means” and “result” are not so easily identified in the service arrangement which takes us back to the issue of viewing all the

or many California employers, there exists a classic, yet difficult question to answer: “employee or

independent contractor?” facts of the work arrangement, identifying the primary factors being “control” and “manner and means” and identifying secondary factors which can total over a dozen or more, depending on the case.

Factors to consider when determining employee or independent contractor status under California Law were established in a California Supreme Court decision (S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350 [256 Cal.Rptr. 543].)

In Borello, the California Supreme Court collected its decisions on the determination of an employment relationship. Borello held that “‘the principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired....’ ” (Borello, at p. 350.) Borello then states “secondary” factors of the nature of the service relationship. First, Borello said that “ ‘[s]trong evidence in support of an employment relationship is the right to discharge at will, without cause.’ ” (Ibid.) Borello then summarized other “secondary” factors of employment status:

Additional factors have been derived principally from the Restatement (Second) of Agency and have been applied to countless cases on this subject. These include:1. Whether the one performing services is engaged in a

distinct occupation or business; 2. The kind of occupation, with reference to whether,

in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;

3. The skill required in the particular occupation; 4. Whether the principal or the worker supplies the

F

…a person who is paid

compensation to achieve

a certain result without

regard to how and when the

work is done qualifies as an

independent contractor.

Passing the “Employee or Contractor” Test: It’s Multiple Choice at Best

2 0 0 8 I s s u e 2 ALPHA Fund Quest �

instrumentalities, tools, and the place of work for the person doing the work;

5. The length of time for which the services are to be performed;

6. The degree of permanence of the working relationship;

7. The method of payment, whether by the time or by the job;

8. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;

9. Whether or not the work is a part of the regular business of the principal;

10. Whether or not the parties believe they are creating the relationship of employer-employee.

What has obviously been omitted here is whether there exists a written contract. That’s because a written contract purporting to establish an independent contractor relationship is not determinative (Borello, Id. At 349). Likely due to the fact that many employers are willfully using the independent contractor status, and hiding behind a written contract, to avoid paying workers’ compensation benefits as well as employment-related taxes.

If after the “test” of employee v. independent contractor is still too close to call, the safest bet is to consider the worker an employee and provide Workers’ Compensation insurance and appropriate State and Federal withholdings payroll. If the independent contractor status is clear, the following issues need to be understood before work is performed:1. Does the work require a License, If

yes, obtain a copy of the License.2. Does the work require that the

Contractor be insured and/or bonded? If so, require certificates of Workers’

Compensation and commercial liability insurance, and make sure the insuring company is legitimate, the policy number is complete and correct, limits are adequate, and the insuring period adequately covers the time period of the service to be performed.

3. If possible, the contract also should provide that the independent contractor indemnifies (protects and accepts responsibility for) any damages suffered by you in the event of any accidents – involving your workers or third parties.

The State of California Employment Development Department (EDD) offers a form, DE 1870 REV. 11 (1/04), with over 70 questions that an employer can utilize to determine a worker’s status. If you would like to obtain a copy of it, visit the EDD website www.edd.ca.gov, Forms and Publications.

If you would like additional information on this topic, please contact ALPHA Fund Underwriting at (800) 655-2667, extension 235.

2 0 0 8 I s s u e 2 ALPHA Fund Quest �

Passing the “Employee or Contractor” Test: It’s Multiple Choice at Best

ALPHA Fund Quest 2 0 0 8 I s s u e 2��

of injuries caused by the handling and movement of patients.

Injuries caused by the handling and movement of patients continue to be the single largest cause of loss for ALPHA Fund Participants. And even though Participants have made progress in decreasing these types of injuries, a tremendous opportunity for improvement continues to

exist. Consequently, at the suggestion of ALPHA Fund Loss Prevention staff, a number of Participants began leveraging this opportunity by forming Patient Handling Quality Improvement Teams (PHQIT) or Patient Handling Injury Prevention Work Teams (PHIPWT).

Participants interested in using process improvement techniques to improve employee safety might wonder how to get started. The journey toward improvement begins with a Participant expressing a sincere desire and commitment to improve employee and patient safety. Once this commitment is made, the rest is set in motion.

FOCUSFindanOpportunitytoImproveFirst, identify a process for improvement. ALPHA Fund Loss Prevention staff trained in facilitation techniques will work with Participants to: ascertain if their current process is adding value; clarify whether it needs to be improved; and if so, determine who will benefit from the improvement. In the case of patient handling, Participants commonly express a desire to reduce the frequency of patient handling injuries, the number of lost work days caused by these types of injuries and the costs to the organization.

OrganizeaTeamThatUnderstandstheProcessThe Participant will then assemble a team of individuals knowledgeable about the process. Gathering a team of employees who are closest to, or have ownership in, the process provides the greatest chance of success. For example, Patient Handling Teams are most often comprised of registered nurses, certified nursing assistants, physical and/or occupational therapists, employee/occupational

health professionals, human resource representatives and members of senior leadership. It takes a significant commitment for these teams to succeed. Most groups commit to at least six or seven working sessions with the best results achieved when the meetings are held weekly or bi-weekly.

ClarifytheCurrentKnowledgeoftheProcessThis stage involves gathering the “who, what, when, and where” information about the chosen process or concern. An exchange of information between team members allows them to develop an “opportunity or work statement,” which reflects the scope of their team work. Through a series of facilitator led exercises, the team determines its roles and responsibilities, looks at current processes, and may identify quick and easy improvements.

UnderstandtheCauseofProcessVariationThe team may begin to ask “why” questions such as, “why isn’t the process working effectively?” Through large and small group discussions, and by examining various data, team members begin to analyze the blocks or obstacles that are keeping them from reaching their goals. This is often the most challenging part of the process. Instead of focusing on superficial obstacles, team members are challenged to identify the real blocks to success.

SelecttheProcessImprovementDuring this phase, the team selects the most appropriate solutions or strategic directions, while cognizant of the cost and difficulty of implementation. By using group decision making tools and methodologies, the team can evaluate various improvement scenarios and determine which improvement areas or strategic directions to pursue.

It’s All About the FOCUS…PDCA That is!continued from page 1

ALPHA Fund’s continued

support and assistance helps

Participants monitor the

success of their efforts and

maintain the success they

have achieved.

2 0 0 8 I s s u e 2 ALPHA Fund Quest 5

ALPHA Fund has recorded another remarkable year. For the fiscal year ending June �0, 2008, ALPHA’s fund balance rose to over $9 million due in large part to improvements in Participant’s safety programs. ALPHA Fund’s claims frequency rate per $�00 of Participant payroll decreased 20% from fiscal year 2007 and has decreased a total of 6�% since the pre-reform days of 2002.

As a result of these improvements, the Board of Directors has once again declared a distribution of Fund surplus. Participants in the Fund as of October �, 2008 will receive their second installment of surplus identified for FY 2005 and their first installment of the surplus identified for FY 2006. This month, in all, ALPHA Fund will be sending to Participants a total of $�,050,000 in surplus distribution checks.

However, even given this good news with regard to claims and financial performance, I’m concerned with what I see in the marketplace. Once again, legislative pressure to roll back the Reform measures creates cause for caution. The Workers’ Compensation Insurance Rating Bureau (WCIRB), has just recently recommended a �6% increase in the Pure Premium Rates for January �, 2009 but the Insurance Commissioner only approved a 5% increase, the first such increase in five years.

It is more important than ever to remain committed to safety and preventing work-related injuries in your facilities. Medical and Disability costs are on the rise and our opportunity to maintain or lower Workers’ Compensation costs in the future is directly related to our ability to our ability to dig in and take action necessary to keep the frequency of claims down. The least expensive claim is the one that doesn’t occur. Through ALPHA Fund, Participants have access to its healthcare expertise in claims management and loss prevention services that are second-to-none. I urge you to call on us to assist you in your quest to lower Workers’ Compensation costs for your facility.

Contact ALPHA Fund via phone (800) 655-2667 extension 2�6 (Loss Prevention) and extension 227 (Claims).

F r eq u en c y p e r $1m m o f P a y r o ll

3.68

2.95

3.38

1.68

0.72

3.05

3.49

1.61

2.05

2.36

1.60

1.28

1.57 1.52

2.122.01

0.88 0.82

1.66

0.55

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

All Claims Indemnity C laims

ALPHA Fund Posts Profitable Year But COO Reminds Participants to Keep “Digging In” on Claims Frequency

Common strategic directions selected by Patient Handling Teams include education, policies and procedures, and equipment procurement and maintenance. After identifying these strategic directions and the FOCUS has been completed, then the next step is PDCA. It is important to remember here that rushing to selection will not improve outcomes.

PDCAPlantheImprovementThis involves deciding how the improvements will be made. Detailed action plans are developed as to how the process changes will be implemented within the improvement area. A plan for data collection to monitor the effects of the change is also addressed at this stage.

DotheImprovement,DataCollection,&AnalysisHere, the focus is on collection of baseline data and information that will determine how the process performs prior to, and following any improvement efforts. Are there any surprises? If so, why did they occur, and what can the team do about it?

ChecktheResultsThe team evaluates whether or not the process changes were actually implemented as planned. The effects of the change are monitored, but more importantly, they are analyzed and compared to the predicated results against actual changes. If the results are not what the team expected, then the prior steps are reviewed. However, if everything checks out, successful modification or change to an existing process has been achieved.

ActtoHoldtheGainFinally, the team creates a strategy for holding improvements and working toward further improvements. Any member of a team would be quick to agree that the single most important step of the journey is to develop a strategy for maintaining long term improvement. With this

in mind, ALPHA Fund’s continued support and assistance helps Participants monitor the success of their efforts and maintain the success they have achieved. ALPHA Fund

believes and supports the philosophy that over the long term, real improvement comes from change.

If you are interested in learning how your organization can improve employee safety through process improvement, please contact ALPHA Fund Loss Prevention at (800) 655-2667, ext. 216.

It’s All About the FOCUS…PDCA That is!continued from page 1

ALPHA Fund Quest 2 0 0 8 I s s u e 26

THE VALUE OF QUALITY

ithout a doubt, one of the most important decisions a buyer can make, particularly a self-insured buyer,

regarding his/her Workers’ Compensation (WC) program is the selection of a Third Party Administrator (TPA). The financial economics of selecting one TPA over another is complex as most of the costs are difficult to quantify up front. If a buyer is strictly looking for the lowest price then the comparison between proposals is elementary. The trickier piece is quantifying the savings from quality claim handling.

Selecting a TPA: The Relationship of Price to Value

W

As Glen Brown stated in his column in Workcomp Central (6/19/08), “Third-Party Administrators: Quality v. Price”

“While there are a number of buyers who go strictly for the lowest price, most recognize that well-handled claims will cost less than those that are mismanaged. Further, the ‘savings’ of opting for a low cost TPA could easily be erased by the mishandling of just one claim.”

So how does the buyer balance price and quality? The answer is not easy and requires the buyer to understand the key elements of a well managed TPA program. Those elements include examiner

experience and expertise, examiner case load, litigation rate, medical management and bill review.

Examiner Experience, Expertise and Case LoadIt’s no secret that the claims examiner profession has historically suffered from high turnover and examiner burn-out. Furthermore, new entrants to the profession typically have little or no formal claims education, and instead rely on on-the-job training or employer sponsored education after they’ve already started to handle claims. A skilled and seasoned examiner, who has the experience, and the credentials, can be invaluable in negotiating and settling claims and, in turn, can greatly affect overall costs! Quality examiners build relationships with all parties to a claim which, in turn, achieves savings by conducting thorough investigations, reducing lost time, facilitating a return to work and avoiding or limiting litigation. Quality TPAs focus on resolution and not damage control.

How much does a claims examiner know about a particular business? Does the examiner’s cases include several restaurants, retail stores, manufacturing and then a hospital? Specialization in the healthcare field provides an edge in handling healthcare-related

continued on page 11

2 0 0 8 I s s u e 2 ALPHA Fund Quest 7

provides pro-active claims management services which include: medical case management; litigation management; bill review; and utilization review. In addition, loss prevention services and educational support

are available for clients seeking to drastically lower their overall costs and most importantly establish a culture of safety.

Kaweah Delta is located in Visalia (Tulare County) and is the second largest health care district in California with over 3,200 employees. The ACHD companies welcome and applaud Kaweah Delta Health Care District for choosing DELTA Group for its Workers’ Compensation needs.

For more information about the benefits of joining DELTA Group, please call (800) 655-2667, extension 226.

ALPHAFundAnnouncesExclusiveBrokerRelationshipwithNewsuraInsuranceServicesALPHA Fund, a Workers’ Compensation self-insurance pool serving Health Care Districts and not-for-profit health care organizations, is pleased to announce the formation of an exclusive broker relationship with Newsura Insurance Services; a Roseville, California based insurance brokerage which serves the healthcare industry.

According to Dave McGhee, Chief Operating Officer for ALPHA Fund, “Newsura’s operating philosophy is very similar to ALPHA Fund’s in that their focus is on loss prevention as a means of managing the cost of insurance for their clients.” Newsura Insurance Services serves its clients with "out-of-the-box" insurance solutions that reduce risk, broaden coverage, enhance service, and save money. McGhee further states, “By creating a culture of safety in the workplace, avoiding injuries and in those instances where there is

When Kaweah Delta Health Care District (Kaweah Delta) was looking to improve its Workers’ Compensation loss experience and employee safety record, but wanting to retain its self-insured status, it turned to DELTA Group for an effective solution to the rising costs of Workers’ Compensation. Once an initial review of Kaweah Delta’s former Workers’ Compensation program was completed, DELTA Group discovered it could save the District thousands of dollars by having the experts at ALPHA Fund provide claims management and loss prevention services.

DELTA Group, a Joint Powers Agency managed by the Association of California Health Care Districts (ACHD), and serviced through ALPHA Fund, was created for individually self-insured health care facilities who want to take advantage of the health care expertise of ALPHA Fund’s claims management and loss prevention services. Arranged as a Third Party Administration (TPA) service, ALPHA Fund

Kaweah Delta Health Care District Joins DELTA Group

a claim, managing that claim in a manner that facilitates the employees timely return to work, future insurance cost increases are minimized.”

ALPHA Fund is a Participant (owner) governed joint powers agency which provides Workers' Compensation self-insurance to Health Care Districts and not-for-profit health care organizations. Participants take an active role in the decision-making process by approving rates, setting policy and reviewing programs and services. ALPHA Fund Participants include hospitals, skilled nursing facilities, medical clinics, ambulance operations, and community-based health and wellness districts.

For further information, please visit www.alphafund.org or www.newsura.com

ALPHA Fund Quest 2 0 0 8 I s s u e 28

UPCOMInG EVEnTS

California State Rural

Health Association

Annual Meeting

December 1-3

Sacramento

California Association of Public

Hospitals and Health Systems

Annual Meeting

December 3-5

La Jolla

Association of California

Health Care Districts (ACHD)

Board Retreat

December 11-12

Costa Mesa

ALPHA Fund

Council Meeting

February 19

Newport Beach

ALPHA Fund

Participants’ Meeting

February 19-20

Newport Beach

Healthcare Human Resources

Management Association

Annual Meeting

March 16

Long Beach

Hospital Association

of Southern California

Annual Meeting

April 16-18

Carlsbad

LPHA Fund recently unveiled its new slogan and logo which represents the financial prosperity and shared success of the Workers’ Compensation Pool.

A commitment to reduce the Workers’ Compensation costs of its Pool Participants by offering a

comprehensive range of claims management, loss prevention and educational opportunities,

specifically for the healthcare field, is how the ALPHA Fund directly communicates the core belief of the Pool — that success for one is success for all!

Proven Performance, Shared Success The new slogan aptly describes the ALPHA

Fund of today- a financially successful venture, which for the last two years, has distributed

excess surplus reserves to its Participants. Through consultation with experts specializing in brand and name recognition and a committee comprised of employees, they all agreed that the new slogan confirmed ALPHA Fund’s passion for improved safety performance for its Participants and its success of reducing claims frequency and severity. Additionally, advertising the new ALPHA Fund, visual treatment will include the line - “Workers’ Compensation Solutions for Health Care” - as a reminder of the specialization of ALPHA Fund’s focus. Furthermore, advertising ALPHA Fund’s Loss Prevention services - “Partners In Employee Safety” - will be retained as a commitment to assist Participants in developing and improving internal loss prevention programs and creating safer healthcare environments.

Combining the attributes of the ALPHA Fund’s healthcare expertise in loss prevention and claims management operations, along with the entrepreneurial, non-traditional way of pricing and delivering Workers’ Compensation coverage, in addition to a new exclusive alliance with Newsura Insurance Services, Inc., a well-known insurance broker, ensures that ALPHA Fund is well positioned for the future.

Retaining the signature “sun rays” identifies the company’s long-standing relationship with the Association of California Health Care Districts (ACHD) which created ALPHA Fund in 1976, and introduced the new venture in DELTA Group, a third party administrator (TPA) company for entities who are individually self-insured. Combing the new logo with the slogan, “Proven Performance Shared Success” is a powerful symbol for the new ALPHA Fund as a forward-moving, energetic and dynamic brand.

ALPHA Fund Unveils New Slogan and Logo

A

2 0 0 8 I s s u e 2 ALPHA Fund Quest 9

The Lending Library continues to grow in terms of both

popularity and content, with nearly 80% of Participants

utilizing the Library on a regular basis. The following

is a list of learning programs that have been added to

the Library since the last issue of Quest.

n Dealing with Drug and Alcohol Abuse for Employeesn Dealing with Drug and Alcohol Abuse for Managers and

Supervisorsn Domestic Abuse: Recognizing

and Reportingn Fall Prevention for General

Industryn Forklift Operator Safety Trainingn Healthcare Associated Infections:

Prevention and Controln HIPPA: Privacy Compliancen It’s a Dog’s Worldn Patient Lifting: Safe Strategiesn Overweight: Who’s in Control?n Safe Handling of Hazardous Drugsn When Domestic Violence Comes

to Work

ALPHA Fund’s Video Lending Library– It’s Video on Demand!

The Library’s success is largely Participant driven.

new titles are added to the Library based on

recommendations from you, our Participants. Keep

those recommendations coming!

If you would like to view the current Lending Library

Catalog, or obtain information about additional Loss

Prevention Programs and Services, visit the Loss

Prevention Home Page at http://

www.alphafund.org/services_

lp.htm.

If you have suggestions or

recommendations for additional

learning programs that you would

like to see added to the Library,

please let us know. You may

contact Brenda McGuire at

(800) 655-2667, ext. 2�6 or

via email at BrendaM@

alphafund.org for information

about the Lending Library.

Dear Jane: I have an employee who sustained two specific injuries, two months apart. Current law allows

104 weeks of temporary total disability. The employee has been determined disabled for both injuries so does that mean he is entitled to a total of 208 weeks of temporary total disability?

SplitDecision

Dear Split DeciSion: No. The 3rd District Court of Appeal has found that when separate injuries result in concurrent periods of temporary total disability, the 104 week/two year limitation also runs concurrently. (Foster vs WCAB 2008)

Dear Jane: What is a Medicare Set Aside and when does it apply? MatureandonMedicare

Dear Mature: A MSA (Medicare Set Aside) allocation is a detailed report that recommends how much money out of a settlement must be “set aside” to satisfy the Medicare Secondary Payer Statute of 1980. It needs to be addressed if the injured person is currently receiving Medicare benefits, has applied for Social Security Disability Insurance or is at least 62.5 years old. If the injured worker is currently entitled to Medicare or is entitled to Medicare within 30 months and the settlement amount is greater than $25,000, then approval of the settlement is required by CMS (Centers for Medicare and Medicaid Services). No CMS approval is needed for settlements less than or equal to $25,000.

Q Q

ALPHA Fund Quest 2 0 0 8 I s s u e 2�0

Participants benefitting from the panel of experts on topics ranging from Industrial Hygiene and Cal/OSHA to Strategic Influencing included senior management, human resource managers, employee health nurses, and facility engineers.

Part one of the workshop “Now You See Them, Now You Don’t: Recognizing and Understanding Environmental Hazards in Healthcare,” lead by John Sacco, CIH, P.E., CSP, from Earthshine Consulting, Inc, was a relatively new topic for many of the attendees. Mr. Sacco spoke about the field of industrial hygiene, specifically its role in the anticipation, recognition, evaluation, and control of non-infectious workplace health hazards. He educated and held discussions with Participants on indoor air quality issues, water damage and mold, chemical disinfectants; histopathology, ethylene oxide, waste anesthetic gases, lead, and asbestos as well as little known hazards with laser printers and photocopy machines. He stressed to the group that the exposure you can’t see can be as dangerous as the one you can see. And that an industrial hygiene exposure left untreated over time can have serious and debilitating health repercussions.

“Handling Cal/OSHA Inspections” was presented by Fred Walters, Esq. and Lisa Prince, Esq. from

FROM THE CLASSROOM:

ALPHA University Assists Participants in Creating Safer Work Environments

Walter & Prince, LLP. Mr. Walters and Ms. Prince educated Participants on three areas: Cal/OSHA inspections; dual employer issues; and reporting accidents. Information was provided on when to expect a Cal/OSHA visit, how to prepare for a Cal/OSHA visit, how to handle the opening conference, the walk-around, and the closing conference. Dual-employer issues were also discussed, including general or primary employer, special or secondary employer and subjectivity to Cal/OSHA citations, and serious and willful claims. Finally, Participants learned the reporting requirement for industrial injuries, including timelines and responsibilities, and how to affect the most positive outcome of a Cal/OSHA visit, in order to avoid stiff and expensive penalties.

To close the session, Katherine Hart, EdD, CSP from K.A. Hart & Associates, led an energetic discussion and had participants interact in dynamic exercises on strategic influencing, which is leveraging interactions with others. Dr. Hart spoke of the necessity to be self-aware of our strengths, weaknesses, and emotional “hot buttons” when communicating with others, to get the results we want. She encouraged Participants to be mindful of others’ perspectives, to actively listen, and paraphrase the question with the reply and/or comment to gain maximum mutual understanding. When dealing with others’ perspectives, she specified that certain generational, cultural and other characterisitics need to be considered in effective communicating.

For additional information on any of the three topics presented from the ALPHA University “Preparation, Prevention, and Performance: Creating Safer Healthcare Work Environments” workshop, please contact ALPHA Fund Loss Prevention at (800) 655-2667, extension 216.

On June 18th and 20th, ALPHA University presented a Participant workshop, “Preparation, Prevention, and Performance: Creating Safer Healthcare Work Environments”.

ALPHA Fund Quest 2 0 0 8 I s s u e 2

2 0 0 8 I s s u e 2 ALPHA Fund Quest ��

claims. When an examiner understands the environment and culture and works in concert with the organization, positive outcomes and significant savings can be realized.

What’s the examiner’s case load? Case loads in the industry average 160 and above per examiner at any one time. Case loads this high usually result in an examiner being in a reactive mode versus a proactive mode. This then translates into higher claim costs as short term focus and a damage control approach are monumental money wasters. Lower case loads are critical to allow the examiner to spend more time on a case and to build relationships with the defense attorney, nurse case manager, employer and injured worker to jointly achieve a cost-effective resolution.

Medical ManagementQuality examiners save claim dollars by working closely with medical providers to get the injured employee timely and appropriate treatment. This in itself will save claim dollars but can also go a long way in building a good relationship with the medical provider and the injured worker. Addressing authorization requests within the necessary guidelines, working with nurse case managers, when necessary, to facilitate recovery and working with the employer, employee and medical provider to achieve an early return to work all affect the cost of the claim

Again, although this is not as easily measured as bottom line price, it is equally important to consider when choosing a TPA.

Bill ReviewBill review is the area that is most ignored and least likely to be discussed when comparing TPA services and prices. The reason is due to the vast differences in how bill reviews are processed and charges calculated. In many instances, there are deeply hidden costs that, if not addressed, will significantly increase the cost of claims. Bill review is generally considered to be a revenue opportunity for TPA’s.

In summary, when choosing a TPA, substantial savings can be achieved by analyzing price versus quality. The savings that can be realized from a high quality TPA come from areas which are not easily measured but are vital in controlling the cost of a claim.

The following criteria, when taken as a whole, will give a good indication of a TPA’s capabilities and whether it would be a good fit for an organization:

n Experience with similar companies or organizations, specializing in the same industry

n Experience of claims examiner and examiner case loadn Defense counsel relationships

n Litigation rate of claims handled by TPAsn Approach to managed care: in-house or

outsourced (and if outsourced, to whom)n Bill review: in-house or outsourced, cost structure

and average savings per bill or per monthn Risk Management Information Systems (RMIS)

capabilities and availability and types of claims reports, on-line access

After a TPA is vetted, due diligence is performed, and one can adequately understand the entirety of costs associated with any given proposal, then certainly price becomes the final factor. But basing the TPA selection process on the single black-and-white number on the page alone will probably not be the cheapest after all.

DELTA Group would like to help uncover the total cost of your TPA contract. If your facility would like a no-cost, no-obligation assessment of your current TPA relationship, or for more information on TPA contracts, please call DELTA Group, at (800) 655-2667, extension 226.

Glen Brown is part of the Albert Risk Management Consultants claims management team. This column, in part, was reprinted from http://www.workcompcentral.com.

Selecting a TPA: the Relationship of Price to Value continued from page 6

P.O. BOx 419068RanchO cORdOva, ca 95741-9068

A Publication of ALPHA Fund, Your Partners in Employee Safety

Ralph FergusonChief Executive Officer

David McGheeChief Operating Officer

Curt JonesChief Financial Officer

Pam MarcumDirector of Claims

Brenda McGuireDirector of Loss Prevention

Tom PetersenDirector of Business Development

Michele ReagerDirector of Underwriting

Colin RuebDirector of Information Technology

Kathryn WilshusenDirector of Human Resources

Quest Newsletterquest@alphafund.org

FEBRUARY �9 & 20

2009 AnnUALPARTICIPAnTS’ MEETInG

FAIRMOnTnEWPORT BEACH