(A personal perspective)
By Stephen Norwood, MD

Over the past several years, orthopaedic surgeons, as well as most practicing physicians in Texas have been put through the meat grinder when it comes to treating injured workers. It would be fair to say that many have just given up on the whole business. I dropped out for

several years but have been treating comp patients again over the past two years after the legislature agreed to re-configure the Division of Worker’s Compensation, to fall under the management of the Texas Department of Insurance. This legislation included the certification of new Worker’s Compensation Networks, as an employer-selected alternative to the typical non-network system.

Although it has been some time since I served as TOA Work Comp committee chair, I have continued to work behind the scenes participating with the TMA ad hoc Work Comp committee and several workgroups for TDI and DWC. I testified for TMA and TOA on several successful Comp clean-up bills in the last session, the most notable having to do with Texas-licensed, appropriate-specialty peer review. After much prodding from others, I even helped form a physician-sponsored Work Comp Network.

One of the great fears that most physicians had about Networks entering the picture was that they would discount from the already poor fee schedule. In fact, that is exactly what some of them initially tried to do. The worst example was a pre-certification notice that a major group-health carrier was planning to pay 85% Medicare for these services. Fortunately, that never panned out because essentially no providers signed up, but it had a chilling effect, nonetheless. Limited numbers of doctors signed contracts with new networks that discounted between 5-20% off the 125% Medicare rate. When TDI reviewed some of these discounted networks, they discovered that there were often missing gaps in the specialty provider panels, or what TMA would call “Inadequate Networks”.

There are now 32 TDI-Certified Worker’s Compensation Networks, not to be confused with “voluntary networks” which will be phased out. In other “network” states like California and Oregon, it has taken five to six years for these markets and products to stabilize. It is believed that up to 70% of Texas Comp care will eventually occur in a network setting, so there is a transition going on. Although the Texas Association of Business was the catalyst demanding networks in the first place, most businesses have taken a wait-and-see approach to these products, and discounts from standard insurance premium rates have been small so far. Even so, the big boys like Texas Mutual have converted over 20% of their customers and are beginning to develop a track record and understand the cost-savings involved.

To be frank, my whole interest in this business was to get the payments to physicians increased, and the certification of the Physicians Cooperative of Texas (PCT) went a long way in pushing that concept. Even though we were initially only TDI-Certified for Austin/San Antonio and Dallas, the contracts paid well above the fee schedule, and the physician panels were robust with the necessary specialists. The major competitors learned quickly that physicians would no longer sign any contract thrown across their desks, and most gradually increased their rates to the fee schedule level and above. Meanwhile, we have been fighting forever for relief from the misguided 125% Medicare physician fee schedule, and finally have achieved some success. The brand-new DWC fee schedule will pay approximately 139% for E&M and 174% for Surgeries beginning March 2008.

This will lead to at least some resurgence of interest in physician participation. Most doctors decide either to take Work Comp or not. Once a provider commits to treat injured workers again, they will want to consider signing perhaps two or three of the Network contracts, depending on participation of local businesses. Obviously, a combination of decent payment and the expectation of a reasonable number of referrals are important in contracting.

My network, Physicians Cooperative of Texas, was acquired in November 2007 by Omni Health Systems, who operate two of the largest Comp networks in Oregon and Montana. They have an excellent track record of paying physicians well, and share essentially all of the core values of our physician sponsored network. They will operate as Majoris Health Systems in Texas. I will continue to serve as Medical Director and look forward to their experience in network growth and employer contracting.

The intent of House Bill 7 three years ago was to make Worker’s Compensation look a lot more like Group-Health plans. Only time will tell if that can be achieved, but there are signs of hope with physician payment increases and competition in the network market. With the addition of electronic claims handling (finally), even improvement on the “Hassle Factor” side of Comp might improve. As always, the glass is half full.

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