Will the Texas Workers’ Comp System Go Under the Knife’

Employers, employees, medical providers and insurers may not agree on how to fix the Texas workers’ compensation system but all have long complained that it is in dire need of repair. Still, many stakeholders were taken aback when on Sept. 15, 2004 the Texas Sunset Advisory Commission reversed the position set out in its staff report in late May. That report recommended numerous changes to the Texas Workers’ Compensation Commission (TWCC), but the new proposal advocates taking a knife to TWCC, carving off most of its functions, sending them to the Texas Department of Insurance (TDI) and creating a new Office of Employee Assistance.

“We’d been led to believe through the [staff] report that there were some changes they recommended … but certainly did not anticipate abolition of the Commission or any recommendation like that,” said Robert L. “Bob” Shipe, TWCC’s acting executive director. “So that was a surprise.”

Shipe pointed out that the Sunset Commission’s proposal, as outlined by Rep. Burt R. Solomons (Carrollton), chairman of the Sunset Commission, is only one of many. “This is the beginning of a long process,” Shipe said. “There are a lot of people to be heard from yet, nobody certainly that I’ve talked to sees anything as a done deal. So there are a lot of details to be worked out. Even Chairman Solomons as he laid it out acknowledged that this is just a framework.”

Joe Woods, regional manager and assistant vice president for the Property Casualty Insurers Association of America (PCI), said his organization had recommended simplifying the TWCC by whittling it down to a single commissioner or, at most, three. “It’s sort of an unwieldy process right now. You’ve got six commissioners that are part time. … They come in once a month, they’re deluged with ideas and issues on which they have to vote, and then they leave.” What PCI had suggested was to “abolish the current TWCC, the current commission, but not necessarily the agency,” Woods said.

Jerry Hagins, a TDI spokesperson, said the insurance department has no official opinion on the Sunset Commission’s recent proposal and agreed that the recommendations were just that. While declining to speculate on what may or may not happen, he said TDI would be prepared to take on whatever duties the legislature requires.

What’s wrong with the system
Complaints common to almost all constituents of the Texas workers’ comp system are that costs are too high, employees aren’t returning to work fast enough or not at all, employees don’t have access to adequate health care and the administrative burdens are too heavy for all concerned.

Shipe said it is his understanding that employees’ main concern is access, or lack thereof, to quality health care and access to doctors. Dr. David Henkes, chair of the Texas Medical Association’s Ad Hoc Committee on Workers’ Compensa-tion, commented that he witnessed in the Sunset hearings many patients testifying as to the trouble they’ve had getting medical care. On its Web site at www.fixtwcc.com, the advocacy group “Fix TWCC!” urges its members to contact legislators and ask for their “support in improving the workers’ compensation system, e.g., maintaining patient access to important therapies, reducing burdensome paperwork, and helping injured workers get back to their work and their lives.”

David VanDelinder, executive director of the Independent Insurance Agents of Texas, commented that, “Agents are concerned about the difficulty injured workers experience in finding professional medical help for injuries received on the job. Reforms should improve access to real medical care.”

According to Shipe, there are, in fact, fewer approved doctors in system now than there were a few years ago. As of June 2004 there were around 17,000 doctors on the approved doctor list, according to TWCC figures, whereas some 30,000 physicians were treating workers’ comp patients before the Commission implemented medical fee guidelines and the approved doctor list in response to changes mandated by the legislature. However, the numbers alone “don’t quite paint the picture appropriately. Indeed there were 30,000 doctors that had billed for workers’ compensation but the majority of those had billed for one or two patients,” Shipe said. “So the doctors that were in the system before treating the great majority of patients are in the system today treating patients.

“That’s not to say that we don’t have some access issues in certain areas of the state,” he continued. “But we’re certainly monitoring those very closely and have processes set up here in the Commission. When an injured worker can’t find a doctor we go out and help him find one and we have been successful in every case.”

Dr. Henkes said doctors are concerned about the fee schedule for physician reimbursement and the number of administrative burdens the system imposes on medical providers.

“We’re excited that the Sunset Commission did recommend that the fee schedules be looked at and also [recommended] looking at mechanisms for reducing the administrative burdens within the system,” Henkes said.

The current fee schedule does not reflect the amount of work put into the system by doctors, he said, adding that the “low reimbursement, as well as the high number of hassles and the increased administrative costs” have pushed physicians out of the system. A lot of doctors “have chosen not to be participators in it,” Henkes said. “A lot of them that are in there may be in there because they may have very little choice.

“I, for one, am a pathologist and if a workers’ comp [patient] comes into my hospital I do the work. And I either get paid or don’t get paid. … A lot of physicians, orthopedists and others, sometimes they’ll be participating physicians but they won’t accept any patients. And the reason they’re participating physicians is, if they get an emergency room call they have to treat a patient like that.”

While costs and a low return to work concern all the stakeholders in the comp system, none feel the pain more acutely than employers. Texas is the only state in the nation with a voluntary workers’ comp system, and around 40 percent of Texas employers have opted out of it.

“We know from experience that out-of-control medical costs will eventually increase employer premiums beyond the point where some employers can participate in the comp system. Medical costs need to be addressed to keep premiums as low as possible,” IIAT’s VanDelinder said.

“We pay more, but we get less,” said Wanda Rohm, chairman of the NFIB Texas Leadership Council and a small businesswoman in San Antonio, in a statement released by the Texans for Workers’ Compensation Reform (TWCR). “Our workers suffer under a system that offers excessive yet ineffective treatments—leaving Texas workers far less satisfied on many levels including their ability to get back on the job.”

Shipe acknowledged that the Sunset Commission staff report found that TWCC had not focused enough on return to work. In response, he’s appointed a director of Return to Work Services who, along with her staff, are “working on a pilot project on ways that we can focus on return to work in the field offices. Because that’s where the rubber meets the road, that’s where most customers come into contact with the Commission.”

Noting that a majority of the system stakeholders have publicly urged the adoption of return to work guidelines, Shipe said he views such guidelines as “kind of a double-edged sword. … My concern is that those guidelines would be used to deny benefits to injured workers.” But, he added, “Eventually I suspect I’m going to move forward and [adopt guidelines] but I’m hesitant to do it and I think with good reason.”
Networks: silver bullet or not?
The establishment of medical care networks for workers’ comp similar to group health plans offered by employers has been cited as one way to control costs and improve the quality of care.

According to TWCR, a coalition of employers and medical providers committed to reforming the system, a network-based solution would:
• Provide injured workers a choice of qualified, credentialed medical doctors to serve as their primary doctor, who, in concert with the patient, would decide the best treatment.
• Lead to better health outcomes as the treating physicians, workers and employers will be more familiar with job-related injuries and the best treatment options.
• Ensure workers receive medical treatments that are consistent with nationally recognized, evidence-based treatment standards.

Acknowledging that the idea of using networks for health care delivery has a lot of merit, Shipe said networks by themselves are “not a silver bullet. I think the devil is in the details on how you structure that network. There’s just a myriad of things that have to be considered going forward. … Who’s going to be allowed in these networks to provide services and who’s going to control them? I don’t mean who’s going to regulate it, that really doesn’t matter, but who’s going to actually control the network? Will it be employer controlled? Will it be insurance carrier controlled? Will the employees have some say in that? Will it be a mandatory or voluntary network? So there’s just a whole lot of detail that has to be worked out yet.”

Woods maintained that networked care would be an effective way of getting control of medical costs. He also asserted that use of networks similar to those for group health care would simplify the dispute resolution process. In the current health care system, “things get settled through mediation, through the contracts, through the network contracts,” Woods said. “And we think if we can get a strong network system set up for workers’ comp,” disputes could be resolved more efficiently.

No slowing down
Shipe said speculation over what action the legislature will take in regards to the workers’ comp system is not throwing the agency off the course he established when he took over as acting executive director last summer. “We can’t slow down over here with the initiatives that I’ve implemented not only in response to the Sunset recommendations and the Sunset staff recommendations, but through experience and having been with the Commission for the last 13 years,” Shipe said.

He explained that some of the reforms the agency is focused on include: increased access to information for all parties through the TWCC Web site (www.twcc.state.tx.us); review of the current customer service model for delivering services; increased efficiency in the dispute resolution process through the use of mediation; better medical review and compliance processes; and reaching and maintaining appropriate staffing levels.

Reiterating his position that nothing is a “done deal,” Shipe acknowledged that reform of the system is a long-term process. There’s “still a lot of work to be done,” he said. “This is not a snap your fingers and we’re going to get better type of thing.”

Editor’s note: The Sunset Advisory Commission report can be found online at www.sunset.state.tx.us.

Topics Texas Workers' Compensation