Workers Compensation Management

1. Workers Compensation Management Balancing the Provision of High Quality Care with Effective Management

2. The Challenges • Providing the best and most timely services to injured employees to get them fit and back to work • Managing increasing care and administrative costs for Workers Compensation • Controlling abuse of the system

3. WC Management For the past decade: • Medical and therapeutic services have been managed by ACCG • Adjusting services have been provided by ACCG • Settlement negotiations have been managed by ACCG • Oversight by the City has been minimal

4. WC Facts & Figures Since 2007: • Payroll has increased by 19% • Actual claims costs have increased by 31% • ACCG’s estimated ultimate claims costs have increased by 51% • Premium cost has increased by 52%

5. Reasons for Increase • Management of claims • Experience modifier for Columbus is almost 50% higher than the average due to number of accidents and resulting costs • Need for City policies, procedures and training

6. ACCG Claims Management • Combining of medical care decision-making and adjusting services in one organization provides few checks & balances • Limited by use of panel system • Limited possibilities for utilization review and appeals

7. Experience Modifier • Columbus modifier is approximately 1.47 • Based on frequency and severity of claims • Does not include report-only incidents • Tighter medical management will reduce modifier • Improved safety awareness and accountability will reduce modifier

8. Managed Care Organization Option • Managed Care Organizations (MCO) vs. panel of physicians • Immediate access to trained professionals for triage • Quicker access to specialists • Contracted services reduce costs • Better lines of communication will facilitate better control • Utilization review

9. AmeriSys MCO • AmeriSys (a division of USIS) is a leading Managed Care Organization • AmeriSys manages WC medical care for the State of Georgia, MARTA and other Georgia entities • 24/7 reporting capability • Prospective, concurrent and retrospective utilization review • Vocational (skills) analysis

10. Claims Management under the MCO System • USIS claims management (adjusting) services are separate from the medical management • This provides for greater checks & balances • Adjusting services include processing compensation payments, negotiations, mandated reporting, etc. • Business model involves dedicated adjusters and directed communication

11. Comparative Costs Medical Care • No separate ACCG fee, but limited control means skyrocketing claims costs (est. $3,500,000 FY13) • AmeriSys managed care fee est. at $198,000, but Return on Investment (net savings) may be anticipated in the range of $2.50-3.50 for each $1 spent

12. Comparative Costs (cont.) Adjusting Services • ACCG - $451,000 • USIS – est. $200,000

13. Summary of Potential Savings Medical Management (AmeriSys MCO) • Net savings from contracted services, utilization review and more controlled provision of services may be as much as $2.50-3.50 for every dollar spent USIS Claims Management • Savings of $250,000

14. Action Requested • Due to required 90 day notice to current provider a resolution will be brought to Council for a vote on May 14, 2013 • Approval for change to a Managed Care Organization (AmeriSys) for WC medical care • Approval for change to USIS as provider of adjusting and assessment services • Effective date of September 1, 2013