Group Rating Being Challenged in Ohio

Recently an injunction was filed by several Ohio state fund employers against the BWC to revise its system for establishing workers’ compensation premiums and if it stands will end the Group Rating program. This lawsuit charges that the Bureau’s system is unreasonable and unfair. They claim that employers that have even just a claim or two are unjustly penalized while other employers enjoy rather large discounts.

Currently premiums are set at the beginning of the year and are based on an employer’s claims history. A more prospective system for determining premiums is being suggested. This could ultimately reduce your group rating discount or eliminate group rating all together.

Those promoting this “more equitable system of rating employers and establishing their premiums” feel that base premiums will dramatically decrease and it will make Ohio a more desirable place to bring new business. Those who oppose the ruling do not feel that premiums will decrease and when the group discounts are thrown out, the impact to employers and Ohio’s economy would be devastating.

The outcomes that develop from this injunction could potentially change the face of Ohio workers’ compensation as we have known it thus far.

If you are an Ohio employer and are interested in understanding your workers’ compensation premium calculations and the discounts currently available to you through Group Rating you can visit our website at www.ohpinc.com to request a quote or contact us with any questions.

It's great to know you've made a difference

I recently received this email from one of our most troubled clients. His company had many workers' compensation claims and no real management of the losses. He did not know where to start or where to turn. OHP stepped in and now they are back on the right track.

"I would do anything I could to help your company. I am overwhelmed.
~Trust this statement: you and your employees are partners with <> and I am not sure anyone will actually be able to measure the full impact you have made on this company.

Thanks again for your help and friendship"

I am also overwhelmed.

ODG in Action Supporting Favorable Return to Work Outcomes

The following is an example of the success of collaboration of objective evidenced based disability guidelines with the Physician of Record through the OHP Disability Management Program.

The OHP Disability Management Program inherited a Workers’ Compensation claim that was 21 months old. The claim had exceeded the evidenced based duration of disability guideline by 358 days. The Disability Management Coordinator provided the Physician of Record, in letter form, the Official Disability Guidelines (ODG) evidence based guideline, the actual restricted duty and lost time days, and the variance that had occurred to date. This letter also requested an action plan for returning this claimant to full duty[1]. Within 41 days, the physician release the injured worker back to full duty and no exacerbation has occurred to date.[2]

This case is a prime example that providing the medical personnel with objective national standards results in an expeditious return to work, benefitting both the employer and the injured worker.

Though ODG is available to the medical community, it is not always utilized to the benefit of the employer and the ultimate goal of a successful and safe return to work outcome.



[1] **ODG letter was written to physician of record on 7/20/07. We received a response on 9/4/07 releasing the injured worker to full duty in response to the ODG letter.

[2] Allowed Condition: 726.32 Lateral Epicondylitis
ODG Guidelines for Allowed Condition: 21 Lost Work Days and 42 Restricted Duty Days
Actual Outcome: 18 Lost Work Days and 444 Restricted Duty Days (over life of the claim)
402 Restricted Day Variance – 3 Days of Lost Work Day Variance = 399 Disability Day Variance

The Appropriateness of Settlements in the State of Ohio Workers' Compensation Insurance Fund

Recently a Supreme Court hearing allowed a settled claim to be reopened due to the inappropriate claimant interpretation of value and future benefit needs. This has caused major concern among the Ohio Bureau of Workers’ Compensation employers, injured workers, and their representatives. (See the attached story Ruling on BWC Case Settlement)

However, I feel that settlements in the Ohio state insurance fund are like putting a Band-Aid on an infected cut. The problem in the Ohio state fund is the inappropriately high reserves assigned to claims that increase the premiums to the employers.

If the claim reserves appropriately mirrored the objective activity of the claim, settlements would not be required in most cases. Everyone, including the Ohio BWC, has been seeking settlements for the simple purpose of removing inappropriate reserves on claims.

Most recently, it is our understanding that the Bureau is initiating a settlement letter very early in the claim. The Bureau settled 255,266 claims between 1997 and 2007. We have heard that there are eight times more settlements in Ohio state fund workers’ compensation claims than any other state in the country. This undeniably reflects the inappropriate reserving in the claims. These settlements seem to be a temporary solution rather than fixing the actual reserve problem.

Return to Work in Ohio Workers’ Compensation

May is Open Enrollment month for Ohio Managed Care Organizations (MCOs), the privatized solution to Ohio managed care. During Open Enrollment, MCOs are trying to define the competitive advantage between each other. Like in any workers’ compensation managed care program, Return to Work (RTW) is a valuable quality indicator, however, Ohio makes a unique effort to redefine quality RTW.

In Ohio, RTW is measured by DoDM or Degree of Disability Management, a disability management strategy for returning injured workers to work. The DoDM model was built where the length of a disability of each injured worker is positioned on a 100 point scale. -100 is the worst case scenario, 0 in Ohio means Loosely Managed (LM) and +100 is Well Managed (WM) which is the benchmark.

For example, for an Injured Worker (IW) with a given ICD9 code and manual classification, an MCO may actually have returned the IW to work in 4 days. If the optimal, WM benchmark for that ICD9 code and manual classification is 3 days and the statewide average LM benchmark is 7 days, the MCO would have a 75.00% along the continuum from the fixed statewide average (7 days) to the optimal (3 days) for an IW with that combination of designated ICD9 code and manual classification.

The MCO’s DoDM score for a given quarter shall not be based solely on its performance on any one IW’s RTW. The MCO’s score for a given quarter shall be based on its total RTW performance during the reporting period for all claims where the principal ICD9 is one of the 266 designated ICD9 codes being measured for which an actual or released to RTW date, whichever is earlier, was reported.

The BWC has also developed Ohio Specific Disability Duration Outcomes or OSDD is the standard by which optimal RTW dates are established. OSDD data is based on Ohio only workers’ compensation data from January 2000 to December 2003, regarding missed work days based on ICD9 codes. How efficient can 3 years of state specific data be when there is a nationally recognized guideline system already established that is reviewed each year adding the previous year’s data from all 50 states? This system is called ODG.

VOHP uses ODG or Official Disability Guidelines to determine our RTW outcomes which is currently 87%. Since ODG is the national standard and includes a much larger sample of injuries, the guess work is taken out of measuring our RTW outcome. The data does all the work for us.

DoDM and OSDD seem to muddle the big picture with in depth formulas and bureaucratic jargon…does it really have to be this complicated. No it doesn’t. ODG uses evidence based standards to simplify this crucial piece of the workers’ compensation puzzle. It’s all about results and your bottom line. All everyone really wants is their workers working and their premiums minimal. VOHP can help get you there efficiently.

The BWC has produced their 2008 MCO Report Card which is now available on the BWC website at MCO Report Card 2008. Because the BWC closely regulates the MCOs, the performances that it measures show minimal variation from one MCO to another. Vantage Occupational Health Plan strives to professionally meet our employers needs daily with friendly, personal, and timely service.

As you can see from the report card, MCOs are measured on

1.) First Report of Injury timing
2.) First Report of Injury turnaround

FROI timing measures how long it takes each of our employers to report an injury. As a smaller MCO, our timing is greatly impacted by the reporting delays of just a few of our clients over which we have no control. We are responsible for our turnaround time once that injury is reported to us. As you can see from the report card, our timing is a close second to the best turnaround time and considerably shorter than that realized by the rest of our competitors. That can be explained by our passion for what we do and how we do it.

No employer is too big or too small for us. Our clients range from international corporations to the local Mom & Pop shop. No employer is given preferential treatment. We treat our employers in industries that are more prone to accidents the same as we treat employers in professional services, thus less likely to have injuries.

The truth is an injury can happen at any time. You, as the employer, want to know that if it happens in your business, you can personally reach your MCO when you need them. Vantage Occupational Health Plan is here for you with personally-manned phone lines, timely, efficient, and objective processing and high quality medical management.

Next week, I will talk about what was omitted from the report card this year as opposed to report cards of the past.

Last week, we met with one of our clients, a prominent force in the fast food restaurant industry, which has numerous locations in Ohio. They presented, what in their opinion, was a comprehensive transitional work program only to learn that OHP’s Disability Management program offered new tools to control their subjective, open-ended wage continuation policy. Through OHP’s evidence based Disability Management program, the employer is now going to offer time limited wage continuation based on benchmarked durations of work disability. To learn more about Disability Management implementation for your company, contact us.
Some good news in this faltering economy for all you Ohio employers, the BWC has approved a 5% rate decrease effective July 1, 2008. For the whole story go to BWC approves 5% rate reduction
Just one last friendly reminder, May is open enrollment month for changing your MCO. Unfortunately most of you will be inundated with propaganda from every MCO in Ohio. Basically, if you are one of our clients and you actually know who we are, you know that we are good at what we do. If you are one of our clients and you don’t know who we are, you are obviously great at what you do. Keep up the good work.
Many companies are actively and aggressively recruiting new clients based on BWC report card statistical results. The real factor in determining your MCO’s effectiveness is your bottom line. What good is it to have impeccable entry times on FROI’s if your MCO is not actively working with your injured workers and their providers to get your employees back on track and in turn save you money on your WC premiums? Click on the following hyperlink to compare the lack of staggering statistical discrepancies between the top Ohio MCO’s. MCO Report Card 2008

New report touts the success of MCOs in Ohio Workers' Compensation

The Kilbourne Company, an independent actuarial consulting firm, recently conducted a study to evaluate the effectiveness of the Ohio Workers’ Compensation Health Partnership Program (HPP) over its first decade of operation. The focus of the study is an analysis of the Ohio State Insurance Fund claim experience from 1995 through 2006 with particular emphasis on the impact of Managed Care Organizations (MCOs) on that experience.

The basic conclusion of the study as stated within “is that the Health Partnership Program has achieved its objectives and is producing value for the HPP stakeholders, which includes a broad cross-section of persons affected by the Ohio workers’ compensation system.” Some of the successes of HPP cited in this evaluation include:

· $443 million in net savings

· Injured workers returning to work sooner and safer

· 77% improvement in injury reporting lag time

· Approval decisions on injured worker claims processed 61% faster

· 53% faster turnaround of medical provider bills

· 35% reduction in the frequency of claims

· Substantial positive satisfaction rating by both employers and employees

As you can see, MCOs have been instrumental at improving the Ohio workers’ compensation system. Additionally, employers such as yourself, and your injured workers, have immensely benefited from those improvements.

Ohio Workers' Comp Group Rating season in full swing

With the holiday season behind us employers are reviewing Group Rating quotes and “rate predictions” for the July 2008 policy year. In an effort to assist in determining your rate accuracy I thought I would throw out some tips and information you can use during this busy time:

1. The maximum Group Rating discount for 2008 is 85% for private employers. (see BWC press release, https://www.ohiobwc.com/home/current/releases/2007/122107.asp). Many other TPA Group rating quotes are still based on last year’s 90% maximum with a disclaimer. All discount levels are based on the 85% maximum. Question what maximum discount was used for each of your quotes.

2. July 2008 rates are based on your last five years of Workers’ Compensation claims experience. 2007 Fourth quarter information will not be made available to any TPA until mid to late January. To receive the most accurate estimate for the July 2008 rate year, you should wait until the fourth quarter information is available and calculated into your rate estimate.


3. If you are aware or any significant claim cost reductions in the fourth quarter (settlements and/or handicap awards) you should provide this information to the people estimating your rates and/or providing quotes.

4. You have until late February 2008 to select a Group rating proposal. You should evaluate the percentage discount, enrollment fees and the quality of TPA claims services..

5. Finally the BWC has the right to change the base rates for the July 2008 rate year prior to July 1, 2008. (which they have done for many of the past 10 years) These changes can have a positive or negative impact on your February rate estimate.



Hopefully these tips will help you navigate through that sea of Group Rating quotes on your desk.