Board Agenda - June 05, 2007

k. Workers' compensation cost containment

Presenter: Danny Modisette

Purpose: A - Request decision - closure required

Time: No time limit

Description:

The district's workers' compensation plan out-sources services for medical bill review, utilization review, pre-authorization and network discounts. It is critical that the plan works with an organization that maintains state-of-the-art technology, compliance with legislation and the Texas Department of Insurance, Division of Workers' Compensation.

In collaboration with the workers' compensation consultant, Wachovia, we are recommending Injury Management Organization, Inc. (IMO) as the vendor to provide these services to our self-administered workers' compensation program. IMO is a minority owned business, based in Carrollton, Texas. A local vendor will provide better opportunity for the district to manage the time constraints of prompt payment, as mandated by the Texas Workers' Compensation Act (ACT). In addition, IMO brings the potential for the district to benefit from the pharmacy network they provide and the medical network the district selects.

IMO's business operation is impressive, and provides the most compatibility to our self-administration program, at this time. Their utilization review (a process mandated by the ACT) and pre-authorization process are excellent. IMO's medical re-pricing software allows the district to flag certain areas unique to our organization, to further monitor escalating medical costs. IMO offers competitive pricing, including bill review at $7 per bill, hospital repricing $7 per bill, physician review $150, nurse review $85. The IMO agreement extends this pricing for three years. These costs are expensed to individual workers' compensation claims.

Recommendation:

Approve Injury Management Organization, Inc. to provide medical bill re-pricing, utilization review/pre-authorization and preferred provider networks to the Plano ISD workers' compensation program, effective August 1, 2007, pending approval of the agreement by district counsel.

Business Impact:

Re-pricing medical expenses to fee guidelines and discounting through a preferred provider network reduces costs to the internal workers' compensation self-funded plan.

Summary:

Appendix:

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