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June 27, 2017

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State Corner: State Orthopaedic Societies Tackle Workers Compensation Issues

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State Corner: State Orthopaedic Societies Tackle Workers Compensation Issues

The New York State Orthopaedic Society and the Florida Orthopaedic Society, to be used in conjunction with a grant from the State Legislative and Regulatory Issues Committee, created a survey to tackle an ongoing issue in worker’s compensation. Silent preferred provider organizations (PPOs) are an arrangement where an entity leases out discounted services negotiated for one group of payers to another group of payers without the providers' authorization. Essentially, the medical provider is providing out-of-network services at in-network prices. This arrangement allows worker’s compensation companies participating in the silent PPO to access physicians with which there is no contract. Patients (and other insuring entities who are members of the Silent PPO) may then access the lowest discounted rate of the healthcare provider, even though the patient is not directly a member of the plan contracted to the healthcare provider. The worker’s compensation entity network "shops" around to find the lowest rates a physician has agreed to with any insurer, then "rents" that discounted rate to another entity without the physician's knowledge or permission.

In California, for example, a large insurer has entered into contracts with hospitals to treat their members, but unbeknownst to the hospitals, this large insurer has contracted with the State Compensation Insurance Fund (SCIF) to sell SCIF the contract discount. SCIF is paying heavily discounted rates, far below the medical fee schedule, for medical services provided to injured workers who aren't members of the large insurer. In many states, it is already difficult to find medical providers willing to provide treatment to injured workers. According to Reid Steinfeld, in-house counsel for Grant & Weber, this could deepen what he has considered a “crisis.”

To take the survey, please visit: https://www.surveymonkey.com/r/YZ28789. It will be used in conjunction with an AAOS multi-state grant on worker’s compensation with the goal of the grant to increase access to care for injured workers.