Submitted by admin on Thu, 2009-10-01 23:00
By Bill Kidd, Central Bureau Chief
billkidd@texas.net
The Texas Department of Insurance has issued a preliminary report examining how using the Official Disability Guidelines in the state’s workers’ compensation system has affected both medical costs and utilization which indicates significant improvement in recent years.
The report says that from 2005 to 2008, the number of claims decreased by 8%, total cost of claims dropped 24%, and the average claim cost declined 17%.
The department study seeks to determine the impact of the Official Disability Guidelines (ODG) on system costs since its adoption in 2007.
Of the cost changes, 12% in 2006 is attributed to the effects of requirements for preauthorization of some services (such as spinal surgery), with a 5% decrease in 2007 attributed to the effect of the ODG and a “residual preauthorization effect.”
Though separating out what exact system change may have produced which specific result is difficult, the report by the Research and Evaluation Group concludes that excessive utilization of medical services decreased substantially from 2003 through 2008.
House Bill 7, which took effect in September 2005, made major changes in the Texas workers’ compensation system.
Some of those changes, such as creation of a closed formulary for drugs, are still being implemented by the Division of Workers’ Compensation, which was created by HB 7. The DWC replaced the Texas Workers’ Compensation Commission.
Other changes under HB 7 included moving to use of Medicare-based fee schedules for hospitals and health care providers and allowing creation of workers’ compensation health care networks.
Phil Denniston, president and chief executive officer of the Work Loss Data Institute, which publishes the ODG, told WorkCompCentral that because preauthorization requirements and the treatment guidelines “work hand in hand,” it is difficult to separate out specific cost savings. “Savings from treatment guidelines and preauthorization go together,” he said.
The report likewise comments that “more post-ODG adoption time and data” are needed to determine the full extent of the changes to the system, and to determine what is producing those changes.
Denniston said use of evidence-based medicine in the Texas system does appear to have helped bring down costs, as well as helping to reduce the number of medical necessity disputes – which also should reduce costs in the system.
ODG sales in Texas went “way up,” Denniston said, after the preauthorization requirements took effect and before the 2007 adoption of the guidelines. Many of those sales were to payers looking for guidance on making preauthorization decisions, according to Denniston. Sales by the American College of Occupational and Environmental Medicine (ACOEM) of its version of treatment guidelines probably increased as well, he said.
Christopher Wolfkiel, director of ACOEM practice guidelines in Elk Grove Village, Ill., said the department’s study was “interesting.”
"In general it’s obviously a good idea to evaluate utilization data in an environment in which guidelines have been adopted,” Wolfkiel said. “But as the study itself notes, more time and data will be needed to determine the full extent of the impacts…Sorting out utilization trends can be complicated by many factors,” he said.
Wolfkiel said one of the notable conclusions in the study is that there is “little indication that providers are consulting treatment guidelines to determine excessiveness and inappropriateness of (a) particular service in Texas.”
“That’s troubling and suggests that more work needs to be done to raise awareness of the positive impact guidelines can have on health care delivery," Wolfkiel said.
Some carriers have complained that providers – at least ones who don’t regularly treat workers’ compensation patients – may not be aware of the requirements for using the treatment guidelines.
Randy McNeel, director of marketing for the Thornton, Biechlin, Segrato, Reynolds and Guerra law firm in Austin, said it may be too soon to draw firm conclusions from the data used by the department.
“The ODG data cannot be more than 18 months old,” McNeel said. When the data on workers’ compensation health care networks came out for approximately the same period, “it was written off as too new to have an impact,” he said.
McNeel said the ODG data are voluminous and include numerous aspects that do not address utilization or cost. But McNeel said the early data on networks were trending “much as it came out recently,” showing in many instances network costs are more that for non-network claims, while access to care and satisfaction care is lower than for non-network claims.
McNeel said that the ODG guidelines are recognized as “one of the top such programs in the industry” and have been shown to affect cost and utilization in other states.
The report says medical necessary disputes declined “significantly” during the study period, especially after the 2004 and 2006 preauthorization changes.
That decline continued after the 2007 ODG adoption, the report says. However, it says, preauthorization disputes were increasing in 2007, along with increased fee disputes unrelated to utilization disputes.
The report compares return-to-work rates for a 2005 sample on soft-tissue low-back injuries with a sample for 2007 and 2008. Rates for employees retuning within three months were “significantly higher” for the post-ODG adoption sample, and “somewhat higher” post-ODG adoption for returns within six months of injury.
The 2005 sample showed a return-to-work rate of approximately 72% within three months, compared to approximately 80% for the later group. The overall rate of return was approximately 74% for the 2005 group and approximately 77% for the later group.
To reach a link to a PowerPoint presentation on the impact of the ODG guidelines go to http://www.tdi.state.tx.us/alert/whatsnew/indexwc.html.
