For Immediate Release: Dec. 7, 2007

BWC, MCOs Reach Agreement on Restructured, Performance-Based Contract

COLUMBUS – The Ohio Bureau of Workers’ Compensation (BWC) delivered a newly restructured contract to 25 Managed Care Organizations (MCOs) today. The new contract significantly increases performance requirements and includes a revised fee structure to stabilize costs.

“In cooperation with the MCO community, BWC has established a restructured contract and improved our relationship in service to Ohio’s employers and injured workers. This new contact provides for greater accountability by basing nearly half of the contract on performance benchmarks,” said BWC Administrator Marsha Ryan.

The one-year contract requires that 45 percent of the total amount of $162.6 million be available only through the successful achievement of performance benchmarks. The remaining 55 percent will be allocated for operational expenses, which are also subject to the completion of specific reporting deadlines and data accuracy measures.

“In addition to increased performance measures, the 2008 contract includes a new pricing structure that sets a fixed payment for services rather than the previous percent-of-premium payment. Doing so will stabilize costs by eliminating the variability of the previous payment structure. It also removes a potential incentive to avoid reducing employer premiums,” said Ryan.

The 2008 BWC-MCO contract also sets guidelines for timely communication with injured workers about their medical claims and treatment, and sets specific rules on compliance with a focus on ethics and conflict of interest laws.

“Protecting the health and wellbeing of working Ohioans, and delivering a cost-effective insurance product that protects businesses from financial hardship is paramount. This newly restructured contract will enhance service to injured workers and control costs for employers through an increased emphasis on performance,” said Ryan.

Serving as a primary link between injured workers, medical providers, employers and BWC, MCOs provide medical management and cost containment services such as treatment reimbursement decisions, claims reporting, bill and payment reviews, and education and assistance to Ohio’s employer community regarding medical management and return-to-work initiatives.

Contract negotiations, which began in October, concluded this week with both parties agreeing to all terms. The final contract was sent today to all 25 MCOs for completion. Once signed, the contract terms will take effect on Jan. 1, 2008.

Contact: Keary McCarthy
mccarthy.keary@bwc.state.oh.us

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