Friday, May 31, 2013

TX Innovates With Specialty Networks

Some may dispute this, but Texas continues to be a leading innovator in workers' compensation concepts, and not just because it is the home of non-subscription.

Prior to September 1, 2005, before the Texas Workers' Compensation Commission (TWCC) became the Division of Workers' Compensation (DWC) and the agencies duties were reorganized under the Department of Insurance, Texas was fodder for derision and criticism over the management of its workers' compensation system.

Since reformation and reorganization in 2005, however, Texas has led the way in establishing one of the most robust workers' compensation insurance markets in the country, with profitable underwriting for carriers, and affordable coverage for employers.

Employers opting into the state's system, rather than providing alternative benefit plans or going completely bare, has been increasing and carrier participation in the system has also been increasing.

The process has not been without pain, for sure. Injured workers' benefits are not the most generous, and medical coverage issues in the vast rural areas of Texas remain. Many physician and other medial vendors still feel that the Texas system lacks fairness in reimbursement for services, but participation rates remain steady.

One of the innovations that Texas brought to the workers' compensation market was medical management networks, and idea that has spread across the country with variations, but with the essential features mirroring those pioneered in Texas.

Texas is innovating again with new laws that would further the ability to create provider networks that don't easily fit within the certified network system created in Texas.

The certified network system in Texas requires application, interview, review, certification, maintenance and all sorts of other mandates to ensure that the network is operating properly and providing services without discrimination, and to ensure that physicians are properly paid.

With certification, however, comes cost and for small providers of specialty services or equipment, joining a network was prohibitive.

Texas is on the verge, however, of creating a method for these small specialty providers to become sub-networks, and thus create the ability to join larger networks that are certified.

This should in theory increase business for the small providers, decrease costs for networks, and offer more choice to payers.

Texas state Sen. Leticia Van de Putte, D-San Antonio, had little trouble moving Senate Bill 1322 through the state Legislature during the legislative session that ended on Monday. The bill passed the Senate with a 30-0 vote and won House approval with a 145-3 vote. The bill is now on Gov. Rick Perry's desk for his veto or final approval.

SB 1322 will allow home health care services and durable medical equipment providers to voluntarily create informal "specialty" networks. Before this bill, the legal requirements made it too costly for home health care and DME providers to form "certified networks."

The benefit to these specialty providers is consolidation of resources and operations - in particular billing and collection functions.

In addition the bill will allow home health care and DME networks to contract with certified networks and payers directly, which should increase business volume, in exchange for the discounted rates that a network will command.

Smaller vendors, who might be overlooked by some of the large health care networks, will now have opportunities for business and informal specialty networks can also provide services to underserved, rural areas.

Nothing is perfect, and nothing is set in stone - I'm sure there are downsides to this development. It is an untested concept and the idea still needs to get to the regulatory stage, assuming Gov. Perry signs the bill.

Nevertheless, they do things different in Texas, and managing workers' compensation is one of them. We'll see in a few years whether this idea pans out as expected.

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