MCO Open enrollment: Follow the Money

Here’s why it’s important for you to understand how your MCO gets paid.

Your premium rates are determined by the industry you are in, the size of your payroll, and the dollar amount of the claims costs. The claims costs are made up of medical payments, compensation paid to the claimant, and reserves. The BWC and ICO determine how much compensation is paid to the claimant.

The MCO authorizes medical treatments and then authorizes the bills for those treatments. If the MCO keeps authorizing more chiropractic or physical therapy treatments, and then authorizes payment of the bills, your premiums go up and the MCO gets more money. The BWC will say it has processes in place to keep that from happening, but don’t believe it.

When a claim is active, reserves are included which substantially increase the impact of that claim on your premium rates. By authorizing more treatments, the MCO keeps the claim active.

Your TPA should be monitoring your active claims, and should appeal treatments that don’t result in objective improvement for the injured worker. If your TPA is a sister company to your MCO, do you think its loyalty is to you or to its sister?


Posted in claims, MCO, premiums.