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House of Representatives
Session of 2013 - 2014 Regular Session


Posted: July 10, 2013 12:03 PM
From: Representative David S. Hickernell
To: All House members
Subject: Workers' Compensation Act Amendment
In the near future I plan to introduce legislation that would amend the Pennsylvania Workers' Compensation Act to provide employers a managed care option for their insurance plans.

Working in Pennsylvania has never been safer as industries have evolved and employers continue to emphasize and invest in workplace safety and employee health. This progress has naturally led to fewer workers’ compensation (WC) claims; yet the average cost of individual claims is increasing beyond the rate of inflation due mainly to rising medical costs.

WC bills in the mid-1990s sought to help control excessive medical costs by, among other reforms, providing greater managed care options for employers. Reforms included extending from 30 to 90 days the period following a workplace injury in which the employee must seek treatment through a panel of providers if one is designated by the employer and also providing for a healthcare network option for WC known as Coordinated Care Organizations (CCO). While many states allow employers to completely control provider choice or have no time limit on panels, these managed care reforms in the mid-1990s were viewed as positive, albeit modest, steps in the right direction.

Unfortunately, CCOs have never been implemented as intended because they are subject to the same 90-day limit that governs provider panels, so employers have always preferred to simply establish a panel. This flaw in the statute has prevented the WC system in Pennsylvania from utilizing a proven medical cost containment strategy that is a standard feature in practically all other forms of group health. Healthcare networks help ensure acceptable standards of provider quality and integrity and allow for more effective coordination among health professionals, which helps eliminate unnecessary services, excessive or duplicative treatment and overutilization of medication.

The managed care approach to healthcare has benefited stakeholders in all types of group health plans and for WC in many other states and would benefit the WC system in Pennsylvania. My legislation accomplishes this by simply providing that employers may choose to utilize a CCO through which a claimant would receive treatment throughout the claim. Though this reform falls short of the stronger direction of care options afforded to employers in many other states, it is a reasonable amendment that will improve the system, help address overly and unnecessarily excessive claims and maintains a claimant’s ability to make his or her own healthcare decisions.

Introduced as HB1636