AIA Says Mo. Injured Workers Lose under Department’s Managed Care Proposal

Changes proposed by the Missouri Department of Insurance to the state’s workers’ compensation managed care rules would add significant costs and confusion to the system, ultimately undermining the quality of care received by injured workers, the American Insurance Association (AIA) said.

In the department’s proposal, employers would be able, without the prior knowledge or agreement of their workers’ compensation carrier, to contract with a managed care organization (MCO) to provide workers’ comp benefits. The insurance carrier would then be obligated to reimburse the employer-selected MCO for access and administrative fees, regardless of amount.

“Many insurance companies contract directly with carefully selected MCOs – incorporating and coordinating their specialized services into the insurance companies’ complete claim management function,” Paul Blume, Jr., AIA vice- president, Midwest region, said in a letter to the department’s property and casualty section. “The department appears intent on upsetting and undermining these contractual arrangements, which will make it impossible for carriers to effectively and efficiently provide the medical benefits they are obligated to provide to their insureds.”

The department’s proposal, which was debated at a hearing July 24 in Jefferson City, is based on what AIA says is a misinterpretation of statutory language granting employers the authority to select their health care provider. “Nowhere does Missouri law state that an MCO is a health care provider,” Blume said. “As such, the department is acting without sufficient authority to adopt this regulation.”

In its letter to the department, AIA noted that the proposal violates a law enacted this year by the Missouri General Assembly that clarified the applicability and operation of existing law on this subject. The law, in part, states that: Notwithstanding any other provision of law to the contrary, no rule promulgated by the department setting forth criteria for payment of fees by or integration of systems of an insurer and an entity administering claims involving injured employees shall apply to such parties, unless a contractual relationship between such parties to administer claims on behalf of one or more employers is established and the provisions of the rule are not contrary to specific terms in the contract.

‘If no contractual agreement exists between the carrier and the employer- selected MCO, the statute clearly absolves the carrier of any obligation to pay fees,’ Blume commented.

AIA also took issue with the proposal’s requirement that carriers reimburse employer-selected MCOs for “usual and customary” access fees, saying that the concept lacks sufficient meaning to be applied in any valid manner.

“This proposal creates a one-sided and administratively cumbersome arrangement where carriers have very little ability to question or otherwise affect fees paid to MCOs with which they have no contractual arrangement,” Blume remarked. “AIA urges the department to consider how this arrangement could impact the insurance market, not to mention the implications for employers who enter into binding contracts with MCOs without first investigating how it might impact their ability to negotiate favorable insurance arrangements.”

The proposed regulation is open for comment until Friday, July 26.

Topics Carriers Workers' Compensation Missouri