texas monitor · monitor is the final one pub-lished by the research and oversight council on...

MonitorPublished by the Research and Oversight Council on Workers’ Compensation Volume 8, Number 4, Special Edition

Summer 2003

TEXAS

Post-Injury Health Statusof Texas Workers with

Soft-Tissue Injuriesby Joseph Shields, Dana Baroni, and Xiaohua Lu

As part of its work on the development of regional

workers’ compensation (WC)health care network report cardsto assist in the evaluation of alegislatively-mandated healthcare network feasibility study,the Research and OversightCouncil on Workers’ Compensa-tion (ROC) conducted a surveyof injured workers regarding theirhealth status.

This article provides usefulbaseline data regarding variouspatient satisfaction, health sta-tus (emotional and physical), re-turn-to-work, and earnings out-comes that can be compared toother populations of injuredworkers who may, at some pointin the future, be receiving carethrough regional health care net-works or through traditional fee-for-service health care deliverysystems in Texas. Where mean-ingful differences are observed,they will be reported for injuredworkers employed by the State

This edition of the TexasMonitor is the final one pub-lished by the Research andOversight Council on Work-ers’ Compensation (ROC).Funding for the ROC was dis-continued in late June of thisyear. As a result, as of August31, 2003, the ROC will nolonger exist as a stand-aloneTexas state agency.

However, it is anticipat-ed that the governor will issuean executive order transfer-ring the research functions ofthe ROC to the Texas De-partment of Insurance (TDI).It is expected that the trans-ferred function will retain therequirement that a periodicreport on workers’ compen-sation research and issues beprovided to policymakers andthe public at large. In themeantime, ROC staff appre-ciates the interest of Monitorreaders over the years andlook forward to continuing toprovide timely and objectiveinformation on workers’ com-pensation issues in a new set-ting.

Contents

ROC Closes Operations onAugust 31, 2003 .................... 1Post-Injury Health Status ofTexas Workers withSoft-Tissue Injuries .............. 1Survey Results Indicate LowEarly Utilization of MultipleEmployment Provisionof HB 2600 ............................ 7Scarce Data Suggest InitialPharmacy Provision Unlikely to Impact SIF ....................... 13Measuring Interest in a24-Hour Coverage Pilot ........ 16Doctor Monitoring Results forWork Hardening, WorkConditioning, and ChronicPain ManagementServices ................................ 24

ROC ClosesOperations on

August 31, 2003

of Texas and private sector em-ployers, and for injured workerswho selected their own doctor orhad their employer influence theselection of the their treating doc-tor.

2

Research MethodologyA stratified, random sample

of injured workers employed bythe State of Texas, and privatesector employees was adminis-tered by the University of NorthTexas’ Survey Research Center.Interviews with employees in-jured in 2000 were conducted inthe fall of 2002, some 21 to 33months after the on-the-job in-jury or illness occurred. Thesample of injured workers wasrestricted to those with soft tis-sue injuries affecting their back,neck or shoulder areas.1 Re-search findings are based on tele-phone interviews with 970 in-jured workers (156 state employ-ees and 814 private sector em-ployees).2

Key Findings

Research findings are report-ed for three critical areas: 1) sat-

isfaction with the quality of med-ical care received by injured work-ers; 2) post-injury health statusof injured workers; and 3) post-injury return-to-work and wageearnings experience of injuredworkers.

Quality of Medical CareOverall, 61 percent of the

injured workers interviewed in-dicated that they received emer-gency medical care for their on-the-job injury, and the majority (57percent) said that they were sat-isfied with the quality of the emer-gency medical care they received.Injured state employees (71 per-cent) were much more likely tobe satisfied with the quality ofthe emergency care they receivedfor their on-the-job injury thanemployees injured at private-sec-tor companies (57 percent).

Though by law Texas em-ployees have the first choice of

treating doctor, a significant pro-portion of injured workers sur-veyed (33 percent) indicated thatthey selected a doctor from anemployer-provided list or wentto a doctor recommended by theiremployer. As Figure 1 illustrates,a higher proportion of private-sector employees (34 percent)had their non-emergency medical caredirected by their employer thanstate employees (21 percent).

An equal percentage (45 per-cent) of state and private-sectoremployees changed treating doc-tors (i.e., primary care doctors)at some time during the treat-ment of their occupational inju-ry.

The vast majority (84 per-cent) of injured workers were inagreement with the statement thatthey were provided with verygood medical care (by the doctorthey saw most often) that met theirneeds—including 43 percent who

Figure 1Selection of First Non-Emergency Doctor

Source: Research and Oversight Council on Workers’ Compensation, Survey of Worker Experience with Work-RelatedHealth Problems, 2002.

64%

50%

21%

34%

15%

16%

10% 20% 30% 40% 50% 60% 70% 80% 90%

Percent of Injured Workers

Worker chose doctor ontheir own

Worker selected doctorfrom Employer-ProviderList or Recommendations

Selection made by someother means

State Private Sector

3

“strongly agreed” that this wasthe case. Most workers felt thatthe doctor they saw most oftentook their condition seriously (89percent), gave them a thoroughexam (84 percent), tried to un-derstand their daily tasks andduties (85 percent), and had theircomplete trust (81 percent).These strong, positive sentimentsregarding medical treatment werevoiced by injured workers em-ployed by both state agenciesand private-sector firms.

While some differences wereobserved in the patient satisfac-tion levels between injured work-ers who chose their own treatingdoctor and those whose choiceof doctor was influenced by theiremployer, it is important to notethat the large majority of bothinjured worker groups tended tobe satisfied with the quality ofthe medical care received for thetreatment of their on-the-job in-jury.

Not surprisingly, injuredworkers who chose their owntreating doctor were somewhatmore likely than workers whosechoice of doctor was influencedby their employer to feel: thattheir doctor took their medicalcondition seriously (92 percentvs. 83 percent); that the doctorgave them a thorough medicalexam (87 percent vs. 74 per-cent); and that the doctor hadtheir complete trust (84 percentvs. 74 percent). Injured workerswho selected their own treatingdoctor were also more likely tosay they would recommend theirdoctor to a relative or friend for asimilar problem (82 percent vs.71 percent), and a smaller per-

Table1Percentage of Injured Workers in Agreement With Various

Statements About the Doctor They Saw Most OftenBy Method of Doctor Selection

Source: Research and Oversight Council on Workers’ Compensation, Survey ofWorker Experience with Work-Related Health Problems, 2002.

The Doctor I saw Most Often for My Work-Related Injury or Illness…

Doctor Selected from Employer Provided

List or Recommended by Employer

Doctor Selected by

Injured Worker

Overall, provided me with very good medical care that met my needs.

77% 85%

Is generally the type of doctor I would recommend to a relative or friend for this type of problem.

71% 82%

Gave me a thorough medical examination. 74% 87%

Took my medical condition seriously. 83% 92%

Explained my medical condition in a way that I could understand it. 83% 92%

Seemed willing to answer any medical questions I may have had. 88% 91%

Has my complete trust. 74% 84%

Treated me with respect. 90% 93%

Tried to understand my daily job tasks and duties. 82% 89%

Doubted that I was really sick or injured. 25% 19%

Seemed to care more about what the insurance company or employer thought about my care.

31% 18%

centage of those workers whochose their own doctors felt thatthe doctor seemed to care moreabout what the insurance com-pany or employer thought abouttheir medical care (18 percent)than those workers whose choiceof doctor was influenced by theiremployer (31 percent). See Ta-ble 1.

Nearly three quarters (74 per-cent) of the survey respondentswere satisfied with the medicalcare they received from the doc-tor they saw most often—includ-ing 50 percent who indicated thatthey were “extremely satisfied.”While these proportions wereroughly the same for state andprivate sector workers, workerswho selected their own doctor(77 percent) were significantlymore likely to be satisfied withthe quality of care than were

injured employees who chose adoctor with their employer’s in-put (64 percent).

Post-Injury Health StatusWhen asked about their

post-injury health status (21 to33 months after the injury), em-ployees reported a wide spectrumof condition levels (see Figure2). While just 7 percent of thesurvey respondents said their cur-rent health was “excellent”, 18percent said it was “very good”,and 33 percent reported theirhealth status as “good.” Onequarter of the survey respon-dents said their health conditionwas “fair”, and the remaining 17percent reported their conditionas “poor.”3

While no significant differ-ences in overall health status wereobserved between state and pri-

4

vate sector employees, state em-ployees were much more pronethan private-sector employees toreport physical limitations (par-ticularly to more strenuous ac-tivities)4 at the time of the inter-view. These differences areclearly reflected in Table 2.

A substantial percentage ofinjured workers indicated that,as a result of their physical healththey accomplished less than theywould have liked (57 percent), orwere limited in the type of workor activities they were able toperform (63 percent). Emotion-al problems also tended to limitthe activities of survey respon-dents after a significant amountof time had passed since their on-the-job injury took place: 45percent of the injured workerssaid that, due to emotional prob-lems, they accomplished less thanthey would have liked and 40percent said they didn’t do activ-ities as carefully as usual due toemotional problems.

Over one-third of injuredworkers indicated that, despitethe significant amount of timethat had elapsed since their inju-ry, pain still interfered with theirwork either “quite a bit” (22 per-cent) or “extremely” (15 per-cent).5 Approximately two yearsafter their on-the-job injuriestook place, the population ofTexas workers with work-relat-ed soft tissue back, neck, andshoulder injuries had significant-ly lower mean physical health(39.1) and mental health (45.9)scores (on the SF-12 Health Sur-vey questions) than the 1998general U.S. population (mean


Table 2Degree to which Current Health Condition Limits Selected

Activities: State vs. Private Sector EmployeesPhysical Activity Employee

Type Limited a Lot Limited a

Little Not Limited at

All

State 59% 27% 13% Vigorous Activities (e.g., running, lifting heavy objects, strenuous sports)

Private Sector 47% 32% 21%

State 35% 37% 28% Moderate Activities (e.g., moving a table, pushing a vacuum cleaner)


State 39% 35% 26% Lifting or carrying groceries


State 44% 27% 29% Climbing several flights of stairs


State 18% 38% 44% Climbing one flight of stairs


State 42% 33% 26% Bending, kneeling, or stooping


State 41% 26% 34% Walking more than a mile


State 27% 33% 40% Walking several blocks


State 16% 30% 54% Walking one block


State 15% 32% 53% Bathing or dressing yourself


Figure 2Current Health Status: 21 to 33 Months Post-Injury


Excellent7% Very Good

18%

Poor17%

Fair25% Good

33%

5

score of 50 for the physical andmetal health measures).6

Post-Injury Return-to-WorkOutcomes

As was the case with thehealth status findings, it is im-portant to keep in mind that allfindings related to the injuredemployees’ employment statusreflect their self-reported workand earnings activity 21 to 33months after the occupationalinjury occurred, depending onthe exact date of injury in 2000.Approximately one-third (34 per-cent) of the workers injured in2000 reported that they were notworking at the time of the inter-view. Seventy-one percent ofstate workers said they wereemployed at the time of the in-terview compared to 66 percentof workers who were employedby private sector firms at thetime of their injury.

Overall, 66 percent of theworkers injured in 2000 wereemployed at the time of the inter-view (Fall 2002), while 19 per-cent were unemployed but didreturn to work at some pointafter the injury. The remaining15 percent had still not returnedto work 21 to 33 months aftertheir work-related injury tookplace. (See Figure 3.)

After controlling for whetherthe worker’s unemployment sta-tus was related to their on-the-job injury, approximately thesame percentage of state (26 per-cent) and private sector workers(25 percent) said that they wereout of work due to their injury.

Of the nearly two-thirds ofthe workers who said they were

employed at the time of the inter-view, the majority 65 percentsaid they were working for thesame employer they worked forat the time of their injury (i.e.,their injury-site employer). Stateworkers (84 percent) were muchmore likely than private sectoremployees (65 percent) to beworking for their injury-site em-ployer.

Of the workers unemployedat the time of the survey, themajority (69 percent) indicatedthat they lost at least one year ofwork following their injury.7 It isimportant to note that this repre-sents the total amount of time offwork and may include periods ofnon-work that are not due to theinjury.

Due to the relative stabilityof state employment, state work-ers (73 percent) were also morelikely than private sector work-ers (65 percent) to be doing thesame type of work they weredoing before the on-the-job inju-ry occurred. Of the workers em-

ployed at the time of the inter-view, a much higher proportionof private sector workers (34percent) than state workers (17percent) reported that they wereearning less money at the time ofthe interview than they did be-fore the injury.

Of those injured workers em-ployed at the time of the survey,significantly more state workers(37 percent) reported losing lessthan one month of time from work(due to the injury) than workersemployed by private sector firmsat the time of the injury (28 per-cent). While state workers tend-ed to lose less time from workdue to the injury, they were alsomore likely than private sectorworkers to indicate that they wentback to work “too soon” follow-ing their occupational injury (37percent vs. 29 percent).

The vast majority of the sur-vey respondents (89 percent)characterized their employer as a“good employer before the work-related injury took place.” This

Figure 3Return-to-Work Status: 21 to 33 Months Post-Injury


Currently Employed

66%

Currently Unemployed,

But Returned to Work Post

Injury19%

Currently Unemployed,

Never Returned to Work Post

Injury15%

6

held for both state and non-stateworkers. While the majority ofsurvey respondents (59 percent)said their employer treated themwith respect following their on-the-job injury, state workers (68percent) were more likely thanprivate sector workers (59 per-cent) to feel this way.

Injured workers surveyed re-ported that very few employersasked them not to file a claim (8percent); however, a higher pro-portion of survey respondentsindicated that their employerquestioned whether or not aninjured worker’s injury was workrelated (22 percent).

After an injury occurred, itwas much more likely that re-turn-to-work related discussionswould take place between theemployer and injured worker ifthe worker were employed by theState of Texas, as opposed to aprivate sector firm. For example,59 percent of injured state work-ers (versus 42 percent of privatesector workers) said that theiremployer provided them with awritten copy of the their return-to-work plan, and 70 percent ofstate workers (versus 61 percentof private sector workers) indi-cated that their employer workedwith their treating doctor regard-ing treatment and return-to-workoptions.8

Longer pre-injury employ-ment tenure was found to beassociated with better perceived(by employee) post-injury treat-ment by the employer. For ex-ample, almost three-quarters (71percent) of workers who were onthe job for more than 5 yearsbefore the injury felt their em-

ployer treated them with respectafter the injury, compared to just47 percent of the workers withjob tenures of less than one yearprior to the occurrence of the on-the-job injury. Injured workersemployed by their injury-siteemployer for more than 5 yearsprior to the injury were also sig-nificantly more likely to indicatethat their employer worked withtheir doctor regarding treatmentand return-to-work plans, thattheir employer tried to under-stand what tasks they were capa-ble of performing when they re-turned to work, and that theiremployer provided them with awritten copy of the company/agency return-to-work plan.

ConclusionThis study provides impor-

tant information regarding vari-ous patient satisfaction mea-sures, post-injury return-to-workand earnings outcomes, and thephysical and emotional health ofstate and private sector employ-ees in Texas who suffered work-related soft tissue injuries. Theinjured worker interviews revealthat there are meaningful differ-ences between state and privatesector workers when issues re-lated to the selection of doctors,the post-injury health status ofinjured workers, and the likeli-hood of successful post-injuryreturn-to-work and earnings out-comes.

A key, if not unexpected, find-ing that emerges from this analy-sis is that allowing an injuredworker to choose his or her owntreating doctor seems to impactthe perception of the quality of

medical care received in a posi-tive way. Injured workers whochose their own doctors weresignificantly more satisfied withthe medical care they receivedthan workers who were directedto a provider either through anemployer-provided list orthrough an employer recommen-dation. While it is not clear fromthis survey how return-to-workand physical outcomes for in-jured workers varied based ondoctor choice, the satisfactionfindings have important implica-tions for the possible implemen-tation of regional health care net-works to treat work-related inju-ries. It is, however, important tonote that regardless of how thetreating doctor was selected (e.g.,by the injured worker, from anemployer-provided list of medi-cal providers), workers tended tobe fairly satisfied with the per-ceived quality of the medical carethey received.

Notes to pages 1-61 These soft tissue injuries were selectedto control for injury type differences be-tween the state and private sector sam-ples, and because they represent a signif-icant proportion of the workers’ com-pensation claims in Texas. The samplewas randomly drawn from the TWCCMedical Forms Database and includedall soft tissue back, neck, and shoulderclaims, regardless of whether the in-jured worker lost time from work dueto the injury. The survey found that thevast majority of the survey respondents(81 percent) did lose some time fromwork due to the injury. This findingmay indicate that more severely injuredworkers responded to the survey.2 The telephone survey was designed bythe Research and Oversight Council onWorkers’ Compensation and MED-FX,LLC, and include a subset of questions

7

Among the many statutorychanges made by House Bill

2600 (77th Legislature, 2001)were modifications to the bene-fits available to replace the lostwages of Texas employees in-jured on the job. Under Texaslaw, employees of employers whoprovide workers’ compensationinsurance are entitled both tomedical benefits and income ben-efits for lost wages and perma-nent impairment as a result of anon-the-job injury. The weeklyamount of income benefits aninjured employee may receive isbased on the employee’s pre-in-jury Average Weekly Wage(AWW); statutory caps also limitthe amount of weekly income

Survey Results Indicate Low Early Utilization ofMultiple Employment Provision of HB 2600

by Jon Schnautz

benefits for which an employeeis eligible.1

Historically, since the majorreform of the Texas workers’ com-pensation system in 1989, in-come benefits for injured em-ployees have been calculatedbased solely on wages earned atthe job where they are injured.2Under this structure, employeeswho relied on wages from morethan one job, and who are unableto work at any of these jobs be-cause of a work-related injury,may receive significantly lesscompensation than they wereearning before being injured.

In recent years some policy-makers showed interest in howthis system feature might ad-versely impact injured employ-

ees with more than one job. Thisinterest culminated in a statutorychange made by Article 10 of HB2600 in 2001, which allows em-ployees injured on the job on orafter July 1, 2002 to claim wagesfrom all employment reportablefor tax purposes to the InternalRevenue Service (IRS) towardthe calculation of their AverageWeekly Wage (AWW).3

Because this statutorychange was intended to increaseincome benefits for injured em-ployees with more than one job,it was expected to increase over-all workers’ compensation sys-tem costs borne by employersand insurance carriers. In aneffort to mitigate these costs, HB2600 also allowed insurance car-

from the standardized SF-12 HealthSurvey.3 Percentages do not total to 100 percentdue to rounding.4 Strenuous activities include: 1) vigor-ous activities-running, lifting heavy ob-jects, strenuous sports; 2) lifting or car-rying groceries; 3) climbing severalflights of stairs; 4) bending, kneeling, orstooping; and 5) walking more thanone mile.5 These percentages refer to all injuredworkers surveyed, not just those whoindicated that they were employed at thetime of the interview.6 The population of workers with work-related soft tissue injuries in 2000 hadslightly higher physical health scores (39.2

vs. 37.6) than the population of Texasworkers injured in 1997 and 1998 whowere surveyed for the ROC’s 2001 study(See Striking the Balance: An Analysis of theCost and Quality of Medical Care in the TexasWorkers’ Compensation System). The pop-ulation of workers with work-related softtissue injuries in 2000, also had slightlyhigher mean mental health scores (45.9vs. 44.4) than Texas workers injured in1997 and 1998 who were surveyed for theROC’s 2001 study.7 This total duration of lost time in-cludes cases involving intermittent peri-ods of lost time, as well as one contin-uous period of lost time following theworkplace injury.

8 These differences may be due to thefact that Texas state agencies are strong-ly encouraged by the risk-reward pro-gram (as well as other statutory require-ments) to adopt a written return-to-work plan for injured workers, as an ef-fective loss control strategy. Further,state agencies are required to report toLegislature (along with its biennial bud-get request) data related to the numberof injuries, the dollar value of indem-nity and medical payments made to in-jured workers, the injury rate per 100employees, and a description of effortsmade by the agency to reduce injuriesand WC losses. See Texas Labor CodeSection 501.048.

8

riers that pay additional incomebenefits based on multiple em-ployment to be reimbursed forthe cost of these benefits. Tothis end, insurance carriers areallowed to claim reimbursementfor such benefits from the TexasWorkers’ Compensation Com-mission’s (TWCC’s) SubsequentInjury Fund (SIF).

The SIF is an account in thestate’s general revenue fund.4 Itsmain obligation, and the reasonfor its creation, was to pay Life-time Income Benefits (LIBs) incertain workers’ compensationclaims in which an injured em-ployee qualifies for those bene-fits as a result of two injuries – forexample, an employee who wasblind in one eye, and then lostsight in the other as a result of anon-the-job injury.5 Funding forthe SIF is provided through pay-ments by insurance carriers inon-the-job death claims in whichno beneficiary survives the de-ceased employee, as well as in-terest earned on the SIF’s bal-ance.6

Since its creation, the fundhas taken on other obligations,as well. The SIF reimburses in-surance carriers who pay incomeor medical benefits based on cer-tain orders or decisions of theTWCC administrative disputeresolution process that are lateroverturned. In addition, HB2600 added three new obliga-tions to the SIF:1. As noted previously, reim-

bursement of insurance car-riers for additional incomebenefits paid on claims in-volving multiple employ-ment;

2. Reimbursement of insurancecarriers for pharmaceuticalbenefits provided during thefirst seven days after an inju-ry for claims later determinednot to be compensable (i.e.,not in the course and scopeof employment); and

3. Payment of up to $1.5 mil-lion to fund feasibility stud-ies related to regional work-ers’ compensation health carenetworks created under Arti-cle 2 of HB 2600.

The SIF’s available assets atthe end of fiscal year 2002 wereabout $22.6 million (on a cashvalue basis); this amount doesnot include an additional $9.5million in the fund reserved topay LIBs to the approximately 36injured employees who receivethese benefits. Despite thesesignificant assets, it was antici-pated when HB 2600 won pas-sage that, over the next few fiscalyears, additional funding beyondthe available revenue in the SIFmay be needed to reimburse (infull) insurance carriers for incomebenefits paid based on multipleemployment. To address thisprospect, language was also in-cluded in Article 10 of HB 2600allowing TWCC to make partialreimbursements to carriers in theevent of a SIF shortfall, and to“shore up” the SIF with addi-tional funding from the workers’compensation insurance carriermaintenance tax used to fundTWCC. These provisions wereonly to be utilized if the SIF wasnot projected to have adequatereserves to pay, in full, 120 per-cent of its projected obligations

for the upcoming two-year statebudget cycle.7

Given the important fundingissues involved with the SIF, HB2600 also required TWCC toconduct twice yearly actuarialanalyses on the status of the SIF,and to report the findings of thesestudies to the Research and Over-sight Council on Workers’ Com-pensation (ROC), and make themavailable to legislators and thepublic, as well.

Prior Projections of MultipleEmployment Impact

Because of significant con-cern from policymakers and sys-tem stakeholders over the impli-cations of the multiple employ-ment provision and the future ofthe SIF, several attempts havebeen made to assess these issuesvia projections and forecasts. Thefirst and most basic effort oc-curred while HB 2600 was underconsideration by the Legislaturein 2001. The methodology usedto project the cost of the multipleemployment provision and itsimpact on the SIF was rudimen-tary given the short timeframe toproduce an estimate, but the con-clusion was that the new benefitsavailable due to multiple em-ployment consideration would besignificant ($11-$13 million ayear) and could be sustained bythe SIF in the short- to medium-term, but not on an ongoing,long-term basis.

In August 2002, the ROCreleased a report containing up-dated projections of the frequen-cy and cost of multiple employ-ment claims for fiscal years 2002through 2007.8 These projec-tions also evaluated the short-

9

and long-term ability of the SIFto provide reimbursement to in-surance carriers. The methodol-ogy was similar to the originalcost estimates but much morethorough and detailed.

Based on the projected fre-quencies and amounts of addi-tional income benefits that wouldbe paid to injured employeesunder the multiple employmentprovision, and with considerationof a four-year “learning curve” toaccount for the likelihood thatnot all injured employees eligiblefor additional benefits will claimthese benefits, it appeared thatthe SIF would be sufficient toreimburse carriers fully throughFY 2006 or 2007, without anyincrease in the carrier mainte-nance tax or need to make onlypartial reimbursements.

Another effort to estimatethe effect of the multiple em-ployment provision on the SIFoccurred in February 2003, when,in accordance with the statutorymandate from HB 2600, TWCCreleased its most recent actuarialanalysis of the SIF.9 While themethodology used in this reportdiffered from the ROC’s analysison some points, the same con-clusion (that the SIF would pro-vide sufficient short- to medium-term funding for full reimburse-ments to insurance carriers) couldbe drawn based on the findings,again assuming a four-year “learn-ing curve” to maximum utiliza-tion of the provision by injuredemployees.

While the latter two projec-tions were based on consider-ation of all factors relevant tothe SIF’s income and expenses,

and while they were much moredetailed than the original esti-mates produced at the time HB2600 was being considered by theLegislature, neither was based onactual system experience with thenew provision, since it was noteffective until July 1, 2002. Atthe time the ROC report was re-leased, ROC indicated that itplanned to revisit the projectedcost of the multiple employmentprovision after actual experiencewith the benefit accrued.

In the meantime, policymak-er and stakeholder interest in theimpact of the multiple employ-ment provision and in the SIFcontinued. In the 78th regularlegislative session in 2003, leg-islation was filed to eliminate themultiple employment provision,essentially returning the systemto pre-HB 2600 law regardingwhat income could be countedtoward an injured employee’sAWW. This bill (HB 2057, 78th

regular session) did not pass, butdemonstrates the ongoing con-cern about the potential cost ofthe provision. In contrast, laborinterests remain very supportiveof allowing consideration of allIRS-reportable wages in calculat-ing the AWW.

Purpose of ProjectThis article represents the re-

sults of the first attempt to ana-lyze the frequency and cost ofthe multiple employment provi-sion of HB 2600, and its poten-tial impact on the SIF, based onactual experience. It summariz-es the results of a survey distrib-uted in June 2003 to insurancecarriers writing workers’ com-

pensation policies in Texas, ROCanalysis of limited TWCC claimsdata information on the frequen-cy of multiple employment-re-lated claims and disputes, andutilizes the analysis completedfor the August 2002 ROC report.

Copies of the survey weredistributed through the Austinrepresentatives of each carrierthat was part of one of the 25largest workers’ compensationcarrier groups in Texas, based onTexas Department of Insurancestatistics.10 Collectively, these 25groups represent almost 90 per-cent of the workers’ compensa-tion market. Because this list in-cludes only private insurancecarriers, ROC also surveyed largepublic entity insurance carriers.

The survey asked insurancecarriers several questions regard-ing their experience with the mul-tiple employment provision be-tween July 1, 2002 and April 30,2003 (the first ten months theprovision was effective). Keyquestions included:• How many claims the com-

pany received involving in-jured employees seeking in-come benefits from wagesbased on multiple employ-ment (i.e., multiple employ-ment claims);

• The total dollar value of theadditional income benefitpayments made by the com-pany on these multiple em-ployment claims;

• The method(s) by which thecarrier tracked multiple em-ployment claims;

• How many multiple employ-ment claims the carrier de-nied; and

10

• How many requests for SIFreimbursement of incomebenefit costs based on mul-tiple employment claims thecarrier submitted toTWCC.11

Number of MultipleEmployment Claims

In projecting the number ofworkers’ compensation claimsthat would involve benefitsbased on multiple employmentfor its August 2002 report, ROCconsidered several factors. Thepercentage of employees withmultiple jobs in the Texas work-force was projected for each yearfrom 2002 to 2007, and this per-centage (somewhere between 4.5and 4.9 percent of the work-force) was applied to the project-ed number of employees whowould qualify for income ordeath benefits in these years.12

In addition, four “types” ofmultiple employment were con-sidered, for purposes of projec-tion, since the additional incomebenefits available would vary foreach type: those at which aclaimant works two full-timejobs; two part-time jobs; onepart-time and one full-time job -- injured on the part-time job;and one part-time and one full-time job -- injured on the full-time job. As noted previously,“learning curve” models wereapplied to these projections inorder to more realistically con-sider how the benefit may diffusethrough the population of po-tentially eligible injured employ-ees.

Table 3 depicts the August2002 ROC projections of the

number of injured employeeswho would successfully claimadditional benefits based onmultiple employment and theprojected cost of these benefitsin a given year, with consider-ation of a four-year “learningcurve” to model actual utiliza-tion. Totals for 2002 are muchlower than subsequent years be-cause only during two months ofthat fiscal year could injuredemployees claim benefits basedon multiple employment. Thegrowth of claims in subsequentyears represents only the effectsof the learning curve.

ROC’s June 2003 survey ofinsurance carriers regarding mul-tiple employment claims yieldedresponses from carriers repre-senting approximately 40 per-cent of the total Texas workers’compensation private market.This percentage does not includeanother response received froma large public entity insurancecarrier. Of those carriers re-sponding who were currentlywriting workers’ compensationpolicies in Texas, approximately73 percent indicated they had asystem in place to track claimsfor additional benefits based onmultiple employment. In gener-

Table 3Projected Number of Claims for Benefits based on

Multiple Employment and Additional Benefit Costs (2002-2007)From August 2002 ROC Projections, Four-Year Learning Curve

Source: The Multiple Employment Provision of HB 2600 and its Impact on the SubsequentInjury Fund, Research and Oversight Council on Workers’ Compensation,August 2002.

Notes: * These totals do not represent the number of workers who will claimbenefits, but the number of instances in which any of the five types ofbenefits considered in the analysis (Temporary Income Benefits (TIBs),Impairment Income Benefits (IIBs), Supplemental Income Benefits (SIBs),Lifetime Income Benefits (LIBs), and Death Benefits (DBs)) will be claimed,since more than one type of benefit may be received by an injured employee.** These totals represent the number of individual injured employeesprojected to be involved in claims for additional benefits based on multipleemployment. It is included only for purposes of comparison to the 2003survey findings, since these findings reflect individual workers rather thanthe instances in which one of the five benefit types would be claimed.*** These totals represent the amount of additional benefits that wouldbe paid by insurance carriers in the given fiscal year, rather than the potentialliability for additional benefits paid that may occur over the life a claim.These annual cost figures are more relevant to the balance of the SIF, sincethe SIF will only make reimbursements as benefits are paid by insurancecarriers and submitted for reimbursement, not in advance.

2002 2003 2004 2005 2006 2007 Projected # of successful benefit claims*

91 1,263 3,020 4,370 4,596 4,575

Individual injured employees claiming additional benefits**

68 947 2,404 3,276 3,445 3,429

Projected total additional benefits paid in fiscal year***

$102,640 $3.4 mill. $8.8 mill. $14.3 mill.

$16.9 mill.

$17.9 mill.

11

al, carriers were about evenlysplit between those who de-scribed these systems as auto-mated, versus those who indicat-ed that hard copy files were usedfor this information, although thedescriptions of these systemsvaried widely from one carrier tothe next, and several combinedelements of automated and pa-per file systems.

The results of the survey sug-gest significantly lower utiliza-tion of the multiple employmentprovision during the first tenmonths of implementation thanwas projected in any of the pre-vious forecasts. Those carriersresponding to the survey report-ed only 30 claims involving ad-ditional income benefits based onthe multiple employment provi-sion; assuming this relative fre-quency generally holds true overthe remainder of insurance car-riers, then approximately 100claims based on multiple em-ployment would have occurredduring the first ten months theprovision was effective.13

Cost of Multiple EmploymentClaims and SIF Implications

Only a portion of those car-riers responding to the surveywho indicated they had paid ad-ditional benefits based on themultiple employment provisionwere aware of the amount of ad-ditional benefits they had paid.Of the 30 claims reported, only15 could be identified with spe-cific additional benefit costs.These data alone were not con-sidered sufficient to project overthe whole system in estimatingthe cost of multiple employment-

based claims that have occurredthus far. Therefore, ROC reliedinstead on the projected cost perclaim from the August 2002study, which took into accountall possible types of claims foradditional benefits. The ROC’s2002 projections of the averagecost per claim for fiscal years2002 and 2003 was approximate-ly $2,650 per claim, and ROCused this figure to project thecost per claim for the estimated100 claims in the system betweenJuly 1, 2002 and April 30, 2003.

As noted previously, evenunder the most conservative pro-jections (i.e., those projecting lowutilization of the multiple em-ployment provision, such as thefour-year learning curve), it ap-peared unlikely that the SIF couldsustain full reimbursement of in-surance carriers in the long term– past FY 2008, for example.Table 4 shows the August 2002projection of the cost and SIF

impact of the multiple employ-ment provision, with a four-yearlearning curve considered.

Based on the early utilizationof the provision suggested by theJune 2003 survey, the idea thatthe SIF is not a sufficient sourceof reimbursement even on a long-er term basis may be an openquestion.14 Certainly, the surveyresults suggest that initial utiliza-tion of the multiple employmentprovision is much lower than pro-jected in any previous analysis,for reasons that are not entirelyclear.

The implications for the SIFof those multiple employmentclaims made through April 30,2003 are slight, only about$265,000, less than the interestthe SIF earned during that timeperiod. The lower than expectedutilization thus far also suggeststhan the ROC’s learning curveassumptions may have overesti-mated the initial awareness of

Table 4Projected SIF Revenues, Expenditures, and Year-end Assets –

Four-year “Learning Curve” applied toMultiple Employment Utilization

August 2002 ROC Projections

Source: Research and Oversight Council on Workers’ Compensation, 2002.

FISCAL YEAR

2002 2003 2004 2005 2006 2007

Revenue: SIF death benefits

$4.5 mill. $4.8 mill. $4.8 mill. $5.0 mill. $5.1 mill. $5.3 mill.

Revenue: Interest $1.0 mill. $1.2 mill. $1.2 mill. $741,211 $327,287 ($189,423)

SIF LIBs liabilities (reserved)


Expenditures: Carrier reimbursement, non multiple employment

$942,642 $1.0 mill. $1.0 mill. $1.0 mill. $1.0 mill. $1.1 mill.

Expenditures: Multiple employment reimbursements

$0 $0 $3.5 mill. $8.8 mill. $14.3 mill. $16.9 mill.

Estimated year-end available assets (cash value)

$22.6 mill. $25.9 mill. $26.2 mill. $21.7 mill. $11.2 mill. ($2.1 mill)

Estimated year-end available assets (present value)

$23.1 mill. $26.9 mill. $27.6 mill. $23.7 mill. $13.7 mill. $741,603

12

the provision among potentialeligible injured employees. Inorder to project the cost of thebenefit and impact on the SIFbased on the apparent low initialutilization, ROC revised its orig-inal August 2002 learning curveto demonstrate potential impactbased on current available data.Table 5 shows the results.

Under such a scenario, givencurrent obligations and incomefor the SIF, the fund would sus-tain reimbursements even long-er than projected previously,likely through FY 2008 and pos-sibly into FY 2009. In fact, theSIF’s projected year-end balancein FY 2006 would be only slight-ly lower than its year-end balancein FY 2003, and it would not beuntil FY 2006 that the multipleemployment obligations woulddo much more than simply miti-gate the growth of the fund.

The scenario shown in Table5 also includes revisions to thecaps on weekly income benefitsused to calculate the amount ofadditional benefits available toinjured employees and the wayinterest accrues to the SIF. Thesechanges are based on additionalinformation about the currentand future levels of these factors(i.e., lower caps on benefits andlower interest rates) than wereassumed at the time of the Au-gust 2002 analysis. The changesare described more fully in thefootnotes to Table 5.

As to the overall accuracy ofthe August 2002 forecast, it isalso worth noting that the ROC’sprojected year-end balance forthe SIF at the end of FY 2003of about $36.1 million is ex-tremely close to the actual bal-ance in the fund. As of the end

Table 5Projected SIF Revenues, Expenditures, and Year-end Assets –

Revised Based on Actual Multiple Employment UtilizationJuly 1, 2002 to April 30, 2003

Source: Research and Oversight Council on Workers’ Compensation, 2003.Notes:*Since it is now considered an account in the state’s general revenue fund, the office ofthe State Comptroller of Public Accounts has informed TWCC that the interest earnedby the SIF will no longer be credited to the SIF. Assuming this remains the case, theinterest earned by the SIF does not benefit the SIF specifically but rather the state’sgeneral revenue. Accordingly, in this projection, interest for years FY 2004 and forwardis not added to the SIF’s balance.

Based on changes in the percentage of interest the SIF currently is earning and isexpected to earn in coming years, ROC revised the interest assumptions used in thisprojection for the years post-FY 2003. In the August 2002 forecast, a constant fivepercent interest rate was assumed; for this forecast, a two percent interest rate wasassumed for FY 2004, with a half percent increase in each of the next three years. Sincethe interest income will no longer be credited to the balance of the SIF, this change doesnot impact the SIF’s projected balance.** For FY 2003, ROC’s revised learning curve assumed a somewhat higher utilizationof the multiple employment provision that the initial data suggest. For FY 2003, thelearning curve shown in Table 5 assumes about 230 injured employees making claimsfor additional benefits, rather than the 130 or so suggested by the survey results. ROCconsidered this justified based on the likelihood that claims will increase over time anda desire to be conservative in projecting the potential burden on the SIF, erring on theside of overestimating rather than underestimating claims. Until more complete datais available for all of FY 2003 (and beyond), and long-term trends can be established,this seemed the most logical way to reexamine the learning curve.

Aside from the revised utilization of the multiple employment provision and theadjustment in the interest assumptions explained above, one other aspect of theAugust 2002 projections was revised for this projection. The weekly caps on benefitsprojected in August 2002 were significantly higher than the actual caps will be in FY 2004and 2005, and will likely be even higher in FY 2006 and 2007. The caps for 2004 and2005 are set at $537 and $539, respectively, by statute (see Texas Labor Code Section408.047, as revised by SB 1574, 78th Regular Session). Since the caps projected for FY2006 and 2007 are based on trends from recent years, lowering the caps in 2004 and 2005also lowered the projection for those years. The result is a decrease in the projected costof the multiple employment provision, since more workers would have their additionalbenefits limited by the lower cap. The effect is not insignificant, particularly in the latteryears of the projection, where the lower expected cap reduces the expected cost of theprovision by about $1.5 million.

FISCAL YEAR

2002 2003 2004 2005 2006 2007

Revenue: SIF death benefits


Interest* $1.0 mill. $1.2 mill. $520,729 $620,230 $523,102 $470,882

SIF LIBs liabilities (reserved)


Expenditures: Carrier reimbursement, non multiple employment

$942,642 $1.0 mill. $1.0 mill. $1.0 mill. $1.0 mill. $1.1 mill.

Expenditures: Multiple employment reimbursements**

$0 $0 $955,719 $3.0 mill. $7.6 mill. $12.4 mill.

Estimated year-end available assets (cash value)


Estimated year-end available assets (present value)


13

Another HB 2600 statuto-ry change involved the medi-cal benefits – specifically, phar-maceutical benefits – availableto injured employees duringthe period just after an injury.Some policymakers were con-cerned that uncertainty aboutthe status of an employee’sclaim, and even whether theemployer carried workers’ com-pensation coverage or not,could make pharmacists lesslikely to fill prescriptions dur-ing the initial stages of a claim.A 2001 statutory change al-lowed TWCC to provide byrule that an insurance carriershall pay for pharmaceuticalservices sufficient for the firstseven days of a claim if thehealth care provider (typically,the pharmacist) requests andreceives verbal confirmationof workers’ compensation cov-erage and the report of an inju-ry, from either the insurancecarrier or the employer. Carri-ers who pay these initial bene-fits for claims later determinedto be non-compensable (i.e.,not to have occurred in thecourse and scope of work) mayapply to the SIF for reimburse-ment of these costs. TWCC

Scarce Data Suggest Initial Pharmacy ProvisionUnlikely to Impact SIF

rules implementing thesechanges are effective for datesof injury on or after November7, 2002.

Earlier SIF forecasts, in-cluding the ROC’s August2002 projections and TWCC’sFebruary 2003 actuarial report,treated these pharmacy reim-bursement costs as negligible.Although pharmacy costs on aworkers’ compensation claimcan be very significant, it wasassumed that the amount paidfor drugs sufficient for just thefirst seven days is typically nota large amount of money.Based on the informationavailable at this point aboutthe use of this provision fromthe same June 2003 carriersurvey used to inquire aboutthe multiple employmentclaims and TWCC data, theseseem to have been safe as-sumptions. Slightly less thantwo-thirds (7 of 11) of thecarriers responding to the sur-vey who were currently writ-ing workers’ compensationpolicies indicated that they hadsome system in place to trackinstances of pharmacy pay-ments for non-compensableclaims. Only one respondent

reported specific numbers ofclaims and associated costs;another indicated a range ofpotential claims and costs. Theremaining respondents wereevenly split between those re-porting no such claims andthose that did not know.

For the two carriers re-sponding with some specificinformation, 30 to 35 suchclaims were reported at a totalcost of less than $1,000. Giv-en the extent of this informa-tion, it is not possible to projectwith any degree of reliabilitythe overall system costs thatmay be associated with the ini-tial pharmaceutical provision.As of mid-July 2003, TWCCindicates it has received norequests for reimbursementsfrom the SIF based on thisprovision. Continued moni-toring of the SIF during thenext year or so (as more claimshave the opportunity to bedeemed non-compensable)should reveal whether this pro-vision is likely to account forany significant cost to the SIF.At this point, it appears a safeassumption to regard thesecosts as negligible to the SIF.

of May 2003, TWCC calculatedthis balance at about $36 million.

Claims Denied and DisputesIn addition to claim inci-

dence and costs, the surveyasked carriers whether or not

they had denied any claims formultiple employment-based in-come benefits. Only one deniedclaim was reported among thecarriers responding. To furtherconsider the frequency of multi-ple employment-related denials

and disputes, ROC examined theoccurrence of “dispute codes”associated with these issues inthe TWCC Dispute ResolutionInformation System (DRIS).

Through early July 2003, sev-en disputes in the TWCC admin-

14

istrative process were coded asrelated to multiple employmentissues at the initial dispute reso-lution level, an informal media-tion known as a Benefit ReviewConference (BRC). Two ofthese disputes related to the en-titlement to multiple employ-ment benefits, and five to theamount of the AWW of the em-ployee claiming multiple employ-ment benefits. Five of these dis-putes were reported resolved,two in favor of the injured em-ployee and three by mutualagreement.15 One of the twoBRC disputes related to entitle-ment to benefits had reached theformal adjudication level of aTWCC Contested Case Hearing(CCH), and was found in favorof the insurance carrier at thislevel.

Although these data are fartoo scarce and preliminary todraw any conclusions about theoutcomes of disputes related tomultiple employment issues, thelow frequency of disputes is inline with the frequency of claimsreported by carriers – although,as noted, only one of the carri-ers surveyed reported a denial.16

ConclusionThe most striking result of

this survey is the low apparentincidence of multiple employ-ment claims reported by insur-ance carriers for the first tenmonths of the provision’s effect,a finding supported by availableTWCC claims data. Utilizationof the benefit has been so lowthat reimbursements of carriersfor related income benefit costs

based on these claims are likelyto be less than $300,000.

The exact reasons for thislower than expected utilizationare unclear, but several possibleexplanations present themselvesas most likely. One is that in-jured employees are less awareof the benefit than was assumedin the learning curve models, andthat in some cases where they areaware, the additional benefitsavailable may be perceived as notenough to justify the effort.17

Another possibility is thatsome insurance carriers are notaware of whether they are pay-ing additional benefits based onmultiple employment or not. Itis significant to note that a quar-ter of carriers responding to thesurvey reported no method fortracking multiple employmentclaims, and that even some ofthose who did track such claimswere not aware of the amountof additional benefits that hadbeen paid.

It is far too early, however,to conclude that the multipleemployment provision will nothave a significant long-term im-pact on the SIF. Assuming thatthe prior explanations largely ac-count for the paucity of claimsthus far, important caveats mustbe considered. For one, knowl-edge about the benefit amonginjured employees will only in-crease for future claims, andthere is nothing necessarily toprevent even those with olderinjuries (provided, of course,that they occurred on or after July1, 2002) later claiming enhancedbenefits based on multiple em-ployment status prior to the in-

jury. The original four-year learn-ing curve model, while project-ing higher utilization of the ben-efit initially than has been borneout, also projected a sharp esca-lation in utilization between FY2003 and 2004, and again be-tween FY 2004 and 2005, withsome leveling off after this point.If employees make more claimsin future years, carriers also willhave additional incentive to im-prove their tracking of suchclaims in order to successfullypursue reimbursement.

ROC’s revised learning curve(see Table 5) is an attempt tomore realistically model growthin the utilization of the benefitbased on very limited informa-tion, and should not be regardedas definitive of the future impactin terms of cost or impact on theSIF. Indeed, at this juncture,based on available information,no analysis could reasonably doso. In short, the apparent verylow initial utilization of the ben-efit should not be interpreted tomean that it will never be utilizedby a significant percentage of theeligible injured employees. It issimply too early to tell if this willbe the case or not.

One final implication of thefindings of this project is that itmay not be sufficient on a long-term basis to rely on survey datato evaluate and project the utili-zation of the multiple employ-ment provision, and thus thepossible impact on the SIF. It isimpossible to conclude from theresults of this or any other surveywhether the results truly indicatevery low utilization of the bene-fit, insurance carrier uncertaintyabout the use of the benefit, or

15

both. TWCC-collected data,against which to test the validityof carrier reports, are also limit-ed.

Such uncertainty was alreadyproblematic in projecting the fu-ture implications for the SIF, butthe re-designation of that fund asa dedicated general revenue ac-count by the 78th Legislature –and the likelihood that appropri-ations requests will be requiredone and two years in advance infuture years – makes better datacollection to estimate future lia-bilities even more necessary, ifthe SIF is to be properly preparedfor its potential obligations.

Notes to pages 7-151 In fiscal year 2003 (Sept. 1, 2002 toAug. 31, 2003) the statutory cap onTemporary Income Benefits (TIBs), thechief lost-wage benefit in the Texasworkers’ compensation system, is $536.For FY 2004, this cap will be $537, andfor FY 2005, $539, in accordance withthe provisions of Senate Bill 1574 (78th

Legislature, 2003). Weekly caps for Life-time Income Benefits (LIBs) and DeathBenefits (DBs) are also capped at theTIBs levels; caps for Impairment In-come Benefits (IIBs) and SupplementalIncome Benefits (SIBs) are capped at 70percent of the TIBs level.2 Prior to 1989, language in the Texasworkers’ compensation statute relatedto “same or similar” employment by aninjured employee led to court interpre-tations that allowed for some consider-ation of multiple employment in in-come benefit levels. See ROC onlinepublication Multiple Employment in theTexas Workers’ Compensation System: Fea-tures and Benefits, August 2001, availableonline at http://www.roc.state.tx.us/Multiemp.htm for more details on pre-1989 multiple employment-relatedworkers’ compensation system features.3 The total amount of weekly incomebenefits an employee receives are stilllimited by statutory caps, regardless of

whether multiple employment ispresent or not.4 Prior to the 78th regular legislative ses-sion, the SIF was statutorily describedas a “special fund in the state treasury.”The fund was managed by TWCC, anddid not require a specific legislative ap-propriation in order to expend funds, asdo state agencies and other general rev-enue funds. After legislative action inthe 78th session, two bills (HB 3318 andHB 3378) passed that changed the SIFinto an account in the general revenuefund. This change will likely require inthe future that TWCC or whatever agen-cy administers the fund request and re-ceive a specific legislative appropriationfor the projected expenditures of theSIF.5 LIBs are available only for specific, se-vere injuries described in Texas LaborCode Section 408.161.6 See Texas Labor Code Section 403.007.Historically, interest income earned bythe SIF has been credited to the SIF’sbalance. However, based on the chang-es made during the 78th regular legisla-tive session discussed previously, thefuture interest earned by the SIF will becredited to the state’s general revenue asa whole, and not to the SIF specifically.7 See Texas Labor Code Section 403.007(e).8 See The Multiple Employment Provisionof HB 2600 and its Impact on the Subse-quent Injury Fund, Research and Over-sight Council on Workers’ Compensa-tion, August 2002.9 See Actuarial Analysis of the TexasWorkers’ Compensation Subsequent InjuryFund, Mercer Risk, Finance and Insur-ance Consulting, February 2003.10 Workers’ compensation carrier grouprankings were taken from the most re-cent TDI Quarterly Legislative Report onMarket Conditions available at the timethe survey was distributed. This reportis available online at http://www.tdi.state.tx.us/general/forms/tdirpts.html#qtr.11 As of mid July 2003, TWCC report-ed it had received four requests for reim-bursement from carriers, with total re-imbursement of $9,127.64 requested.TWCC’s policy on carrier reimburse-ments for multiple employment-basedbenefits calls for no reimbursements to

be made until October 2003 (early in FY2004); see TWCC Rule 116.12. It is im-portant to note that the small amountof reimbursement requests received sofar does not mean that significantlymore requests will not be made later.Carriers may file for reimbursement inthe same or the next fiscal year in whichpayment was made, and carriers have lit-tle incentive to have filed their requestsby this point, because they will not bepaid until at least October 2003, anyway.12 These projections were based on Bu-reau of Labor Statistics (BLS) Texas sur-vey data for the years 1994 to 2000 (un-published); based on historical patterns,the rate of multiple employmentamong the Texas workforce was project-ed at 4.85 percent in 2002, and project-ed to decrease slightly over time (to alow of 4.54 percent in 2007). The pro-jected percentage of multiple employ-ment in the workforce was then appliedto the projected number of employeeseligible for each type of workers’ com-pensation income or death benefit in agiven year, based on historical data fromthe TWCC System Data Report (SDR).Multiple employment was not assumedto be more or less frequent among in-jured employees than among the state’sworkforce in general. See The MultipleEmployment Provision of HB 2600 and itsImpact on the Subsequent Injury Fund, Re-search and Oversight Council on Work-ers’ Compensation, August 2002.13 This estimate is based on the surveydata reporting 30 claims by insurance car-riers representing approximately 40 per-cent of the private workers’ compensa-tion market and one large public entityinsurance carrier. The estimate in thisreport of 100 overall claims based onmultiple employment assumes thatthese carriers represent 25 to 30 percentof the total workers’ compensation sys-tem (including private carriers, public en-tity carriers, and self-insured employers).In an attempt to validate the numbersreported by insurance carriers on the sur-vey, ROC also considered the number offorms filed with TWCC claiming addi-tional benefits based on multiple em-ployment (TWCC 3-MEs). Throughthe end of June 2003, 21 valid (i.e., non-duplicate, and with injury dates on orafter July 1, 2002) forms had been re-

16

ceived. ROC review of these forms in-dicated that eight were identified withinsurance carriers that responded to theJune 2003 survey. Although it is impor-tant to keep in mind the numbers in-volved are very small (less than 25claims), the fact that 30 to 40 percent ofthe claim forms that TWCC has re-ceived are related to carriers that respond-ed to the survey suggests also that theactual number of claims systemwide isapproximately two and a half to threetimes the 30 reported by carriers re-sponding to the survey, or roughly 100claims.14 Any analysis in this article of the ade-quacy of the SIF to sustain reimburse-ments assumes no additional obliga-

Measuring Interest in a 24-Hour Coverage PilotA Survey of Texas Employers and InsurersWho Write Workers’ Compensation Policies

by Andrew Moellmer

A basic goal of the workers’ compensation sys-

tem is to provide quality medicalcare at a reasonable cost to work-ers who are injured on the job. Inthe early 1990s, as medical andadministrative costs escalatedrapidly, many states began look-ing for new ways to reduce work-ers’ compensation costs whilepreserving the quality of care de-livered to injured workers.

One common approach wasto test programs that wouldbridge the traditional gap be-tween occupational and non-oc-cupational insurance coverage.Dubbed “24-hour coverage,”such programs combine work-ers’ compensation with other

employee benefits, such as grouphealth coverage and disabilityinsurance. These programs canencompass a variety of insuranceproducts, ranging from basic co-ordination of workers’ compen-sation and group health claims,to a single global policy that in-cludes coverage for all injuriesand diseases, including the pro-vision of indemnity benefits, re-gardless of whether workers’medical conditions are occupa-tional or non-occupational innature.1

Twenty-four hour coveragecan provide administrative andmedical savings through elimi-nating double-billing among var-ious health plans, allowing for

the marketing of a single insur-ance product by insurance carri-ers, and integrating managementof an employer’s group healthand workers’ compensation in-surance claims. It may also im-prove the quality of care andincrease patient satisfaction byreducing coverage gaps, and of-fering workers the ability to usethe same treating doctor for oc-cupational and non-occupation-al injuries and diseases.2

With the advantages of bridg-ing the gap between occupation-al and non-occupational injurycoverage come some concerns.24-hour coverage may endanger“exclusive remedy”3 protectionfor employers if the lines be-

tions are placed on the fund. Now thatthe SIF is a fund in the state’s generalrevenue account, attempts to use its un-encumbered balance for other purposesare possible.15 No disposition was indicated for theremaining two disputes. However, a re-view of the specific DRIS records forthese claims indicates that one disputewas withdrawn because the carrier in-volved agreed to pay additional bene-fits, and the other was resolved byagreement of the carrier and injuredemployee.16 A ROC check of the disputed claimsin the DRIS system showed that onlyone of the claims in dispute involvedcarriers that responded to the survey.

This not only helps to validate the re-sponses to the survey (since these carri-ers collectively reported only one dis-pute), but also suggests that carriers notresponding to the survey have experi-enced claims for additional benefitsbased on the multiple employmentprovision.17 It is also possible that the percentageof multiple employment seen in thegeneral workforce (according to the BLSdata mentioned previously) does nottranslate well to the population of in-jured employees. However, there isnothing to suggest that this is the case,and the percentage of multiple employ-ment would have to be much lower inorder to account for much of the lowerthan expected claims volume.

17

tween occupational and non-oc-cupational illness and injury arenot as clean. Similarly, there areconcerns that creating a hybridsystem that merges coveragesmight lead to efforts to introduceemployee deductibles and co-pays into workers’ compensationcoverage, thereby reducing thebenefits available to injured work-ers. Other concerns noted in theliterature include: ambiguitiesrelating to possible federal regu-lation of workers’ compensationcoverage under ERISA provi-sions;4 concerns regarding thedetermination of claim compens-ability for workers’ compensa-tion purposes under an integrat-ed benefits system; potential forincreased regulatory conflict be-tween state insurance depart-ments and workers’ compensa-tion agencies over jurisdictionalmatters; the inability of smallercarriers that prefer to specializein a single line of insurance tocompete effectively in a multipleline insurance market; and thepossibility that total health costscould increase if the group healthpart of the program takes on char-acteristics common to more ex-pensive workers’ compensationinsurance, such as higher caps onmedical fees in some cases, nodollar limits on care, and cover-age beginning on the first day ofemployment.5

Although many states havepassed enabling legislation au-thorizing pilot projects to studythe effectiveness of 24-hour cov-erage programs, to date only Cal-ifornia, Minnesota, Washington,and New York have carried theirpilot projects through to the eval-

uation phase. Evaluation of theseprograms resulted in mixed find-ings on such measures as patientsatisfaction and cost effective-ness.6 For example, in Californiamedical claim costs increased,while in Washington and NewYork claim costs fell. Patientsatisfaction increased in NewYork and Minnesota, but declinedin Washington.

Other states (including Flor-ida, Georgia, Kentucky, Louisi-ana, Oregon, Oklahoma andMaine) adopted enabling legisla-tion in the early 1990s to imple-ment 24-hour pilot programs, butevaluation of these programs hasyet to be undertaken. Many ofthese programs never entered theimplementation stage due to lackof a sufficient number of partic-ipants. The primary reason forthis is that by the mid-1990s, thetime when many states began toimplement 24-hour coverage pi-lots, the workers’ compensationinsurance market became morecompetitive leading to lower in-surance premiums for employ-ers. Interest in cost-effectivealternatives to traditional work-ers’ compensation insurance be-gan to wane accordingly.7

Conditions in the workers’compensation insurance markethave changed significantly in re-cent years. Previous studies con-ducted by the Research and Over-sight Council on Workers’ Com-pensation (ROC) indicate thatsince the late 1990s there hasbeen a significant growth in thepercentage of Texas employersexperiencing an increase in theirworkers’ compensation premi-ums.8 Additionally, during the

same period, insurance carriershave reported declining profit-ability of their workers’ compen-sation lines of insurance.9 Simi-lar to the late 1980s and early1990s, these developments maymake non-traditional means todeliver health and indemnity ben-efits to injured workers (and re-duce costs) more attractive toparticipants in the Texas work-ers’ compensation system. Thisarticle presents the results of sur-veys of Texas employers and in-surance carriers writing workers’compensation in Texas to gaugetheir interest and attitudes about24-hour coverage programs.

Data and MethodsData were collected for this

article by distributing surveys toa random sample of 3,110 firmswith workers’ compensation pol-icies and 390 nonsubscribingfirms,10 for a total sample of3,500 Texas employers. The sur-veys were followed by postcardscontaining a reminder and con-tact information if employersneeded another copy of the sur-vey. Surveys were also distrib-uted to the 25 largest insurancegroups (representing a total of167 insurance carriers) via theirAustin representative mailboxesat the Texas Workers’ Compen-sation Commission (TWCC) cen-tral office. Reminder postcardsand emails were also sent to eachof the carrier groups.11

Inaccurate address informa-tion in the database preventedthe delivery of survey materialsto 310 employers. This left atotal sample of 3,190 Texas em-ployers that actually received a

18

survey. Surveys were receivedfrom 298 Texas employers, foran overall response rate of 9.3percent.12 Approximately 52.7percent of the responses camefrom subscribing firms while theremaining 47.3 percent camefrom nonsubscribing firms.13

The response rate for insur-ance carriers was much lower.Responses from seven privatemarket carrier groups and onecarrier representing public enti-ties are included in the results.Overall, those private carriergroups who responded representapproximately 32 percent of theworkers’ compensation insur-ance market in Texas. Given thelow number of responses fromcarriers, results based on theiropinions should be viewed astentative and exploratory in na-ture.

The following research ques-tions are addressed in this arti-cle:• How much interest is there

among Texas employers andinsurance carriers in a 24-hour coverage Pilot Program?

• What type of program ismost appealing to employersand carriers?

• What perceptions do em-ployers and carriers haveabout the effects of 24-hourcoverage programs on work-ers’ compensation and grouphealth costs?

• What are the demographiccharacteristics of employersand carriers that are associ-ated with interest in a 24-hour coverage pilot?

Texas Employer Interest in a 24-Hour Coverage Pilot Program

Employers were asked a se-ries of questions to measure theirinterest in participating in a 24-hour coverage pilot in Texas. Alarger proportion of nonsubscrib-ing (25 percent) than subscribing(16 percent) firms said they wouldbe likely to participate if a 24-hour coverage pilot were imple-mented in Texas (see Figure 4).

When asked what type of 24-hour coverage pilot would bemost appealing, approximatelyone-fifth (21 percent) of all sub-scribing firms said 24-hour med-ical and disability coverage forall injuries and diseases was themost appealing option, while asimilar proportion (20 percent)found integrated claims manage-ment of existing workers’ com-pensation and group health claimsto be appealing (see Table 6).Over one-third (37 percent) of

subscribing firms said that noneof the options is appealing.

Among nonsubscribing firms,one fourth (26 percent) indicat-ed that 24-hour medical and dis-ability coverage for all injuriesand diseases is the most appeal-ing option. A mere 5 percent ofthese employers said that inte-grated management of existingworkers’ compensation and grouphealth claims is appealing, while42 percent of nonsubscribingfirms said none of the options areappealing. Interestingly, over half(53 percent) of nonsubscribingfirms show interest in some formof a single 24-hour coverage pol-icy that offers coverage for bothoccupational and non-occupa-tional injuries and/or diseases.These findings suggest that non-subscribing firms may be moreinterested in a more comprehen-sive single 24-hour coverage pol-icy in some form, as distinct fromthe joint coordination of benefitsunder separate policies, as is the

Figure 4Likelihood of Participating in a 24-Hour Coverage Pilot,

by Employer Subscription Status

16.2%

25.4%

8.1% 8.5%

22.1% 20.3%

53.7%

45.8%

0%

10%

20%

30%

40%

50%

60%

Likely Neither Unlikely Unsure

Subscribers Nonsubscribers


19

case in the integrated claims man-agement option, than firms withworkers’ compensation coverage.

Employers were also askedquestions to determine whethertheir interest in a 24-hour cover-age pilot would increase basedon several insurance-related pol-icy issues. First, employers wereasked whether they would bemore likely to participate if thepilot were to require injured work-ers to enroll in a network of pro-viders for their occupationalhealth care. Employers wereasked their opinion regardingwhether the incorporation of anetwork of providers into a 24-hour coverage pilot would makethem more likely to participate ina 24-hour coverage pilot (see Fig-ure 5). Approximately 16 per-cent and 18 percent of subscrib-ing and nonsubscribing firms, re-spectively, said that such a pro-vision would make them lesslikely to participate. Approxi-mately one-half of subscribers(51 percent) and slightly fewernonsubscribers (45 percent) wereunsure whether their participa-tion would be either more or less

likely. Given the high degree ofuncertainty expressed by employ-ers, and the comparatively fewemployers who say a providernetwork will make their partici-pation more likely, it is difficultto predict the likely effect such aprovision might have on employ-ers.

There is less ambiguity con-cerning the issue of employerchoice of provider. Employers

were asked if adopting an em-ployer choice of provider modelin Texas would make them morelikely to participate in a 24-hourcoverage pilot. One fourth ofsubscribing firms (25 percent)indicated that they would be morelikely to participate if an employ-er choice model were adopted, ascompared to 22 percent of non-subscribing firms (see Figure 6).14

Approximately twice as manynonsubscribing (14 percent) assubscribing (7 percent) firms saidthey would be less likely to par-ticipate. Once again, the propor-tion of those employers who areunsure about whether their par-ticipation would be more orless likely is high for both sub-scribing (51 percent) and non-subscribing (45 percent) firms.These findings suggest that thereis a greater likelihood that adopt-ing an employer choice model inTexas will increase participation

Figure 5Likelihood that Incorporating a Health Care Network Would

Increase Participation in a 24-Hour Coverage Pilot, by EmployerSubscription Status

14.7% 14.7%18.4%

22.4%

16.2%18.1%

50.7%

44.8%

0%

10%

20%

30%

40%

50%

60%

More likely Neither Less likely Unsure




Type of Coverage Subscribers Nonsubscribers

Integrated claims management 20% 5%

24-hour medical coverage for all injuries and diseases 9% 11%

24-hour disability coverage for all injuries and diseases 4% 3%

24-hour medical and disability coverage for all injuries 8% 13%

24-hour medical and disability coverage for all diseases 1% 1%

24-hour medical and disability coverage for all injuries and diseases

21% 26%

None 37% 42%

Table 6Preferred Type of 24-Hour Coverage Pilot,

by Workers’ Compensation Subscription Status

20

in a pilot, particularly among sub-scribers, as compared to the great-er ambiguity of the effect ofadopting a network of providerson employer participation.

Finally, employers were askedtheir opinions about the likelyeffect of 24-hour coverage onworkers’ compensation and grouphealth costs. Over one-quarterof subscribing firms (28 percent)and slightly more than one-fifthof nonsubscribing firms (21 per-cent) believe that 24-hour cover-age would increase overall work-ers’ compensation costs (see Fig-ure 7). Only 8 percent of non-subscribing firms think that work-ers’ compensation costs woulddecrease while a mere 4 percentof subscribing firms believe this.A similar proportion of subscrib-ing (62 percent) and nonsubscrib-ing (65 percent) firms are unsureabout the effect of 24-hour cov-erage on workers’ compensationcosts. These findings suggestthat employers generally perceivelittle positive cost benefit of 24-hour coverage as it applies toworkers’ compensation cases.

In terms of group healthcosts, subscribers and nonsub-scribers are largely in agreement.Approximately one-fifth of bothsubscribing (19 percent) and non-subscribing (22 percent) firmsthink 24-hour coverage will in-crease group health costs (seeFigure 8). A much smaller per-centage of subscribing (7 per-cent) and nonsubscribing (6 per-cent) firms believe that grouphealth costs would decrease. Asbefore, almost two-thirds of bothsubscribing (63 percent) and non-subscribing (62 percent) firms

are unsure what the effects of 24-hour coverage on group healthcosts would be. Similar to thefindings for the effect on work-ers’ compensation costs, it seem

Texas employers perceive littlepositive cost benefit of 24-hourcoverage as it applies to grouphealth.

Figure 6Likelihood that Adopting an Employer Choice Model in TexasWould Increase Participation in a 24-Hour Coverage Pilot, by

Workers' Compensation Subscription Status

25.0%22.2%

16.9%18.8%

7.4%13.7%

50.7%

45.3%

0%

10%

20%

30%

40%

50%

60%

More likely Neither Less Likely Unsure


Figure 7Perceived Impact of 24-Hour Coverage on Workers' Compensation

Costs, by Employer Subscription Status

28.2%

21.2%

6.7% 5.9%3.7%

7.6%

61.5% 65.3%

0%

10%

20%

30%

40%

50%

60%

70%

Increase Neither Decrease Unsure




21

Insurance Carrier Interest in a24-Hour Coverage Pilot

For this article, the ROC alsosurveyed insurance carriers thatwrite workers’ compensationpolicies in Texas. As mentionedearlier, the eight carriers who re-sponded represent approximate-ly 32 percent of the workers’compensation market. Thesecarriers were asked the same se-ries of questions as employers togauge their interest in a 24-hourcoverage pilot. Due to the lowresponse rate among insurancecarriers, the results of this analy-sis should be viewed with cau-tion.

When asked directly how in-terested they would be to partic-ipate in such a pilot, none of thecarriers showed any interest inparticipating. One carrier indi-cated indifference to the conceptwhile three said they were un-

likely to participate. The re-mainder said they were unsure.

When asked what type ofpilot would be most appealing,five of the carriers said “none”.This is not surprising given theapparent lack of interest in the24-hour coverage concept citedabove. Two of the carriers saidthat integrated claims manage-ment of existing workers’ com-pensation and group health claimsis the most appealing option.

Carriers were also asked thesame set of questions as employ-ers regarding insurance-relatedissues and 24-hour coverage.First, carriers were asked wheth-er incorporating a requirementthat injured workers participatein a network of providers wouldincrease their likelihood of par-ticipating in a 24-hour coveragepilot. Three of the carriers indi-cated that they would be morelikely to participate if this re-quirement were adopted.

When asked about whetheradopting an employer choice ofdoctor model in Texas wouldmake their participation in a pi-lot more likely, only one carriersaid this would be the case.

Carriers were also asked toexpress their opinions on the ef-fect of 24-hour coverage onworkers’ compensation and grouphealth costs. Three of the carri-ers indicated that 24-hour cover-age would increase overall work-ers’ compensation costs whiletwo carriers said that costs woulddecrease. The remaining carrierswere either neutral or unsureabout this issue. There was great-er uncertainty about the effectsof 24-hour coverage on grouphealth costs. One carrier eachsaid that group health costs wouldeither increase or decrease, re-spectively, while the remainingcarriers said they were either neu-tral or unsure about this issue.

It should again be noted thatonly 8 carriers responded to thesurvey, and although these carri-ers represent a significant shareof the workers’ compensationmarket, none of them write grouphealth insurance in Texas. Thisin part may explain the greaterdegree of uncertainty about theeffects of 24-hour coverage ongroup health costs. It also mayexplain the reluctance of the car-riers who responded to partici-pate in a 24-hour coverage pilotsince a basic element of suchcoverage is the integration ofworkers’ compensation and grouphealth claims administration.

Overall, these results sug-gest that although there is littleinterest among carriers in partic-

Figure 8Perceived Impact of 24-Hour Coverage on Group Health Costs, by

Employer Subscription Status

18.5%22.0%

11.9%10.2% 6.7% 5.9%

63.0%61.9%

0%

10%

20%

30%

40%

50%

60%

70%

Increase Neither Decrease Unsure



22

ipating in a 24-hour coveragepilot, interest may be increased ifcertain provisions are incorpo-rated into the pilot such as re-quiring workers to participate ina network of providers or adopt-ing an employer choice of pro-vider model in Texas. Of therange of 24-hour coverage alter-natives, only a limited form, inte-grated management of worker’scompensation and group healthclaims, seems to have any possi-bility of support among the carri-ers responding to the survey.

ConclusionIt has been suggested that

24-hour coverage programs maybe one way to reduce workers’compensation costs and improvethe quality of care for injuredworkers. Whether this can occurin practice has yet to be deter-mined, since the results of pilotprograms that have been imple-mented and evaluated in otherstates are mixed. This articlereports on research conductedthrough a survey of Texas em-ployers and insurers who writeworkers’ compensation insurancein Texas to gauge the degree ofinterest in establishing a 24-hourcoverage pilot in Texas.

As discussed earlier, there isonly modest interest at best forsuch an initiative among employ-ers. Substantially more nonsub-scribing (25 percent) than sub-scribing (16 percent) firms indi-cated that they were likely toparticipate. Most of the employ-ers (58 percent), however, wereneutral or unsure about their par-ticipation. This suggests that withthe right combination of educa-

tion and policy incentives, moreemployers may be induced toparticipate in a pilot program.Underscoring this is the fact thatonly one in five subscribing andnonsubscribing firms said theywere unlikely to participate.

The small number of insur-ance carriers responding to thesurvey indicated that they areeven less inclined to participatein a 24-hour project. Three ofthe responding carriers said theywere unlikely to participate. Mostwere either neutral or unsureabout whether they were likelyto participate. Similar to em-ployers, this ambiguity suggeststhat with the right mix of educa-tion and policy initiatives, somecarriers might be induced to par-ticipate.

What explains the low levelsof interest in a 24-hour coveragepilot? One possible reason is theperception among both employ-ers and carriers (particularly em-ployers) that there is little or nocost benefit to 24-hour cover-age, whether in terms of workers’compensation or group healthcosts. Only 4 percent and 8percent of subscribing and non-subscribing firms, respectively,thought that 24-hour coveragewould decrease workers’ com-pensation costs. Similarly, only6 to 7 percent of subscribing andnonsubscribing firms thought thatgroup health costs would be de-creased. Carriers were similarlydoubtful about the positive ben-efits of 24-hour coverage in re-ducing group health and work-ers’ compensation costs.

One way to increase interestin a 24-hour coverage pilot might

be to introduce certain provi-sions such as requiring injuredworkers to participate in a net-work of providers or incorporat-ing an employer choice of doctorcomponent into the model.Employers and carriers wereasked whether incorporating anetwork of providers into a pilotwould make them more likely toparticipate. The difference be-tween employers and carriers onthis issue is stark. A modest per-centage of subscribing (16 per-cent) and nonsubscribing em-ployers (18 percent) said theywould be more likely to partici-pate under this model as com-pared to more than a third (3 of 8,or 37.5 percent) of carriers whosaid this. On the other hand,employers would be more likelythan carriers to participate if anemployer choice component wereto be adopted in the pilot. 25percent and 22 percent of sub-scribing and nonsubscribingfirms, respectively, said thiswould be the case, as comparedto only one of the eight carrierswho said this.

These findings suggest thatselectively incorporating bothcomponents into a pilot might in-crease participation among bothemployers and carriers. Bothgroups may respond more posi-tively to giving them greater con-trol over the choice of provider,whether in the form of a provid-er network to encourage carriersto participate or an employerchoice model to encourage em-ployers to participate.

The fact that none of thecarriers responding to the surveyindicated that they would be in-

23

terested in participating in a pi-lot, as compared to over 20 per-cent of employers, suggests thatadopting provisions designed toencourage carrier participationmay be the best approach. Eitheroption would require first amend-ing the Texas Labor Code.

Finally, it seems that the mostpopular aspect of 24-hour cover-age overall is integrated claimsmanagement of existing work-ers’ compensation and grouphealth claims. One-fifth (20 per-cent) of subscribing firms, andtwo of the eight insurance carri-ers (25 percent) seemed to favorthis limited form of 24-hour cov-erage. Nonsubscribing firms (26percent) appear to prefer morecomprehensive forms of 24-hourcoverage, such as 24-hour medi-cal and disability coverage for allinjuries and diseases.

In summary, the findings re-ported in this article suggest thatthe type of 24-hour coverage pi-lot that is likely to produce thehighest rate of participationamong employers and carriers isone that retains separate policiesfor both workers’ compensationand group health coverage, butprovides for integrated manage-ment of claims. An additionalinducement to encourage carrierparticipation might be the incor-poration of a requirement thatinjured workers choose theirtreating doctor from a providernetwork that is selected by thecarrier. An integrated manage-ment model with a provider net-work seems to be the most feasi-ble and appealing option for theestablishment of a 24-hour cov-erage pilot in Texas. Given the

sensitive nature of any statutorychanges related to choice of doc-tor issues, and the historical sep-arations of workers’ compensa-tion and group health coverage,any such provisions would likelyhave to be carefully crafted anddebated, even on a pilot projectbasis.

Notes to pages 16-231 For a detailed enumeration of therange of 24-hour coverage program op-tions see Workers’ Compensation TaskForce, “A Progress Report on the Im-plementation of 24-hour coverage” De-cember 1999 (Kansas City, MO: Nation-al Association of Insurance Commis-sioners).2 Hughey, Vance A. “24-Hour HealthCare Coverage and Workers’ Compensa-tion” Background Paper 97-5 (CarsonCity, NV: Nevada Legislative CounselBureau).3 If injured workers file a worker’s com-pensation claim, they are granted no-fault coverage for on the job injuriesand diseases, but in exchange must re-linquish the right to sue employers un-less there is evidence that the employer’snegligence contributed to the injury.4 Employee Retirement Income Securi-ty Act of 1974.5 A discussion of the possible obstaclesto implementation can be found inWorkers’ Compensation Task Force, op.cit., and Hughey, op. cit.6 See Linda Rudolph et al, “InjuredWorker Satisfaction with Care in a 24-Hour Pilot Program” (Sacramento, CA:California Department of IndustrialRelations, December 2000); Gerald Ko-minski et al, “Evaluation of California’s24-hour coverage Pilot Demonstra-tions” (Los Angeles, CA: UCLA Centerfor Health Policy Research, November2001); McGrail, Michael P. et al, “TheMinnesota Health Partnership and Co-ordinated Health Care and DisabilityPrevention: The Implementation of anIntegrated Benefits and Medical CareModel” Journal of Occupational Rehabili-tation, 12:1 (March 2002), 43-54; Kelly B.Kyes et al, “Evaluation of the Washing-

ton State Workers’ CompensationManaged Care Pilot Project” Medical Care37:10 (October 1999), 972-993; Borba,Phillip S. and Thomas Parry, “An Eval-uation of the Comprehensive and Or-ganized Managed Care Program: FinalReport” (Integrated Benefits Institute,2000); and “Evaluation of the Minne-sota Health Partnership: CoordinatedHealth Care and Disability PreventionProject” http://www.umassmed.edu/workerscomp/grants/grant10.cfm.7 Oregon and Maine are two states thatexperienced initial interest from employ-ers in 24-hour coverage projects, only tosee that interest wane due to changingmarket conditions. See Joseph, RobertE. “24-hour coverage: The Oregon Pi-lot” FORC Quarterly Journal of InsuranceLaw and Regulation 9:4 (Winter 1997) andBureau of Insurance, “Maine’s 24-hourcoverage Pilot Project” CompletedGrant Report to the Robert WoodJohnson Foundation, November 1997.8 See Biennial Report of the Research andOversight Council on Workers’ Compensa-tion, Research and Oversight Council onWorkers’ Compensation, 2002, pp. 100-104.9 Ibid., pp. 105-109.10 Texas is the only state where workers’compensation coverage is truly option-al. “Nonsubscribing” firms are thosethat have not purchased this coverage.11 These 25 carrier groups represent ap-proximately 89 percent of the Texasworkers’ compensation market. SeeTexas Department of Insurance, Quar-terly Legislative Report on Market Condi-tions: Third Quarter 2002, 2003 (availableat http://www.tdi.state.tx.us/general/pdf/pcqlr02q3.pdf).12 Respondents were asked to indicatetheir preference on a standard LikertScale, where 1 is “very likely” and 5 is“very unlikely.” For the purpose ofanalysis, a response of 1 or 2 was recod-ed as 1 “likely,” a response of 3 was re-coded as 2 “neither likely nor unlikely,”and a response of 4 or 5 was recoded as3 “unlikely.”13 There is a significant difference in re-sponse rates by subscription status.The response rate for subscribing firmswas 5 percent. The response rate fornonsubscribing firms was 36 percent.

24

This disparity in employer survey re-sponse rates by subscription status mayindicate that nonsubscribing employerswere generally more interested in re-sponding to a survey examining cover-age alternatives than subscribing em-ployers. While the final results of thisstudy should not be considered repre-

Doctor Monitoring Results for Work Hardening,Work Conditioning, and Chronic Pain

Management Servicesby D.C. Campbell and Amy Lee

This article is a continuation of the health care

provider monitoring initiativesfirst described in the August2002 Special Edition of the Tex-as Monitor.1 That report discussedfindings from a physical medicinestudy based on methodology de-veloped by staff from the Re-search and Oversight Council onWorkers’ Compensation (ROC)and the Texas Workers’ Compen-sation Commission (TWCC) tomonitor the amount and durationof medical care provided to in-jured workers in Texas by indi-vidual health care providers.

The ROC’s report in the 2002Special Edition of the Texas Mon-itor presented the average utiliza-tion of specific physical medi-cine services for all health careproviders in Texas, and profiledthe practice patterns for samplehealth care providers whosepractices showed significant dis-parities from those of their peersin the treatment of low back softtissue and nerve compressioninjuries (two of the most costlyand most common diagnoses inthe Texas).

This article examines the uti-lization and duration of WorkHardening (WH), Work Condi-tioning (WC), and Chronic PainManagement (CP) services, andprofiles the practice patterns ofhealth care providers whosepractices appear to be signifi-cantly different than the generalpopulation of health care provid-ers who provide those services.

MethodologyThe data used for this analy-

sis came from TWCC’s Medformsdatabase, and covers the first 24months of medical services re-ceived by workers who sufferedlow back soft tissue or low backnerve compression injuries incalendar year 2000.

ROC staff used univariatestatistics to:• determine the median (50th

percentile) utilization ofWH,WC, and CP services perinjured worker for all healthcare providers in Texas;

• determine the median ser-vice utilization per injuredworker for each health careprovider; and

• compare a ranking of eachhealth care provider’s medi-an to the median of all healthcare providers in Texas.

In order to improve the sta-tistical validity of the results,ROC staff limited the analysisto health care providers with fiveor more patients. For a completedescription of the data and meth-odology used to produce thesedoctor monitoring results, seeTexas Monitor Volume 7, Num-ber 2 Special Edition (August2002).2

Results

Table 7 compares the num-ber of services a typical (i.e.,median or 50th percentile) healthcare provider in Texas would pro-vide per injured worker with lowback soft tissue or low backnerve compression injuries to thenumber of services a high utiliz-ing (95th percentile) providerwould administer per injuredworker with the same diagnoses.For example, looking at low backsoft tissue injuries, a typical

sentative of the interest in 24-hour cov-erage of all Texas employers, it certainlyhighlights general attitudes towards theintroduction of a 24-hour pilot projectin Texas.14 Under the Texas workers’ compensa-tion system, employees have the statu-tory right to choose their own treating

doctor; however, nonsubscribing em-ployers do not fall under the jurisdictionof the Texas workers’ compensationsystem. As a result, nonsubscribing em-ployers may currently choose to requirethat injured employees select a doctorfrom the employer’s list.

25

health care provider renders onaverage 19 CP services per pa-tient, while a provider at the 95th

percentile provides on average160 services per patient – almosteight times as much. Clearly, thisdegree of overutilization couldhave an impact on overall medi-cal costs in the Texas workers’compensation system.

Figure 9 illustrates how theWH practice patterns of fourhigh utilization health care pro-viders compare to the medianpractices of all providers in the

state. While the median numberof WH services provided by allTexas health care providers perinjured worker with a low backnerve compression injury was 63units of service, some high utili-zation providers billed for asmany as 199 units of service perinjured worker. For low back softtissue injuries, the median num-ber of WH services provided byall Texas health care providersper injured worker was 50 unitsof service; however, as Figure 9illustrates, some providers ren-

der significantly more units ofservice per worker. Similar dis-parities in utilization are alsoevident with WC and CP servic-es (see Figure 10 and Figure 11).

The study also revealed sig-nificant disparities when durationof treatment (in number of days)is considered. Table 8 comparesthe number of days a typical (i.e.,median or 50th percentile) healthcare provider in Texas treats aninjured worker with low back softtissue or low back nerve com-pression injuries to the numberof days a high utilizing (95th per-centile) provider treats an injuredworker with the same diagnosis.Overall, high utilizing health careproviders render significantlylonger durations of WH, WC,and CP treatments than the me-dian health care provider (50thpercentile).

Figure 12 illustrates how theWH treatment durations of fourhigh utilizing health care provid-ers compare to the median WHtreatment durations for all healthcare providers in the state. Whilethe WH median treatment dura-

Table 7Median Number of Work-Hardening, Work-Conditioning,

and Chronic Pain Management Services per Patient Injury Year 2000 – Two Years Post-Injury


L o w B a c k S o f t T i s s u e I n j u r i e s

L o w B a c k N e r v e C o m p r e s s io n I n j u r i e s

T y p e s o f P h y s i c a l M e d i c i n e # o f s e r v i c e s

p e r p a t i e n t – a l l p r o v id e r s

( 5 0 th P e r c e n t i l e )

# o f s e r v i c e s p e r p a t i e n t – h i g h u t i l i z i n g

p r o v id e r s ( 9 5 th

P e r c e n t i l e )

# o f s e r v i c e s p e r p a t i e n t – a l l p r o v id e r s


# o f s e r v i c e s p e r p a t i e n t – h i g h u t i l i z i n g


P e r c e n t i l e ) W O R K

H A R D E N IN G 5 0 1 9 5 6 3 2 0 4

W O R K C O N D I T I O N I N G

2 8 1 0 2 4 8 1 9 5

C H R O N IC P A I N M A N A G E M E N T

1 9 1 6 0 2 6 1 4 3

Figure 9Comparison of the Median Number of Work Hardening Services Per Patient for Selected Health Care

Providers Compared with the Results for All ProvidersInjury Year 2000 – Two-Years Post-Injury


63

175187 196 199

020406080

100120140160180200

# of

Ser

vice

s Pe

r Pa

tient

All ProviderMedian

Provider A Provider B Provider C Provider D

Low Back Nerve Compression Injuries

50

212 224 227265

0

50

100

150

200

250

300

# of

Ser

vice

s Pe

r Pa

tient

All ProvidersMedian

Provider E Provider F Provider G Provider H

Low Back Soft Tissue Injuries

26

Figure 10Comparison of the Median Number of Work Conditioning Services Per Patient for Selected Health

Care Providers Compared with the Results for All ProvidersInjury Year 2000 – Two-Years Post-Injury

Figure 11Comparison of the Median Number of Chronic Pain Management Services Per Patient for Selected

Health Care Providers Compared with the Results for All ProvidersInjury Year 2000 – Two-Years Post-Injury



14

24 2426 27

0

5

10

15

20

25

30

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProvidersMedian

Provider II Provider JJ Provider KK Provider LL


28

69 7080 80

0

10

20

30

40

50

60

70

80

# of

Ser

vice

s Pe

r Pat

ient

All ProvidersMedian

Provider M Provider N Provider O Provider P


26

7080

117136

0

20

40

60

80

100

120

140

# of

Ser

vice

s Pe

r Pat

ient

All ProviderMedian

Provider Q Provider R Provider S Provider T


37

127

163 168186

020406080

100120140160180200

# of

Ser

vice

s Pe

r Pat

ient

All ProvidersMedian

Provider U Provider V Provider W Provider X


tion per injured worker with a lowback soft tissue injury was 19days for all Texas health care pro-viders, some health care provid-ers treated injured workers for aslong as 71 days, or more thanthree times the duration for themedian health care provider. Sim-ilar disparities are also evidentwith WC and CP services (Fig-ure 13and Figure 14).

Table 8Median Work Hardening, Work Conditioning, and Chronic

Pain Management Treatment Durations(number of days between first and last treatment)

Injury Year 2000 – Two Years Post-Injury


L o w B a c k S o f t T i s s u e I n j u r i e s

L o w B a c k N e r v e C o m p r e s s io n I n j u r i e s

T y p e s o f P h y s i c a l M e d i c i n e # o f d a y s p e r

p a t ie n t – A l l p r o v id e r s


# o f d a y s p e r p a t ie n t – h ig h

u t i l i z in g p r o v id e r s

( 9 5 th


# o f d a y s p e r p a t ie n t – a l l



# o f d a y s p e r p a t ie n t – h ig h

u t i l i z in g p r o v id e r s

( 9 5 th

P e r c e n t i l e ) W O R K

H A R D E N IN G 1 9 5 4 2 3 5 6

W O R K C O N D I T I O N I N G

1 5 4 1 1 4 4 7

C H R O N IC P A I N M A N A G E M E N T

8 6 6 1 0 6 8

27

Figure 13Comparison of the Median Duration (in days) of Work Conditioning Per Patient for Selected Health

Care Providers Compared with the Results for All ProvidersInjury Year 2000 – Two Years Post-Injury

Figure 14Comparison of the Median Duration (in days) of Chronic Pain Management Per Patient for Selected

Health Care Providers Compared with the Results for All ProvidersInjury Year 2000 – Two Years Post-Injury



14

24 2426 27

0

5

10

15

20

25

30

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProviderMedian

Provider AA Provider BB Provider CC Provider DD


15

25 26 26

32

0

5

10

15

20

25

30

35

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProvidersMedian

Provider MM Provider NN Provider OO Provider PP


15 18

36

5356

0

10

20

30

40

50

60

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProvidersMedian

Provider QQ Provider RR Provider SS Provider TT


18

46 48 50

61

0

10

20

30

40

50

60

70

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProvidersMedian

Provider UU Provider VV ProviderWW

Provider XX


Figure 12Comparison of the Median Duration (in days) of Work Hardening Per Patient for Selected Health Care

Providers Compared with the Results for All ProvidersInjury Year 2000 – Two Years Post-Injury


23

46 4853 53

0

10

20

30

40

50

60

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProviderMedian

Provider AA Provider BB Provider CC Provider DD


19

44 47

6571

0

10

20

30

40

50

60

70

80

# of

Day

s of

Ser

vice

Per

Pa

tient

All ProvidersMedian

Provider EE Provider FF Provider GG Provider HH


28

ConclusionThe findings in this study on

work hardening, work condition-ing, and chronic pain manage-ment parallel the previous phys-ical medicine findings publishedby the ROC. It appears that sig-nificant differences can be iden-tified in the median practice pat-terns of all Texas health care pro-viders and the practice patternsof health care providers at the95th percentile. These dispari-ties, while possibly indicative ofexcessive utilization and treat-ment durations, provide valuableinformation about where moni-toring activities can best be di-rected to affect system improve-ments.

This monitoring tool may beeffective in reducing medicalcosts and improving quality ofmedical care for injured workersin Texas in several ways. First,since TWCC now has greaterauthority to monitor and sanc-tion health care providers with

practices deemed excessive (perHB 2600, 77th Texas Legisla-ture, 2001), this methodologycan be an effective tool in iden-tifying providers who warrantcloser scrutiny from TWCC’sMedical Advisor and the Medi-cal Quality Review Panel(MQRP).

By the same token, thishealth care provider monitoringtool can also be effective in iden-tifying providers who may war-rant reduced utilization review orpreauthorization requirementsper Section 408.0231 (a) (4) ofthe Texas Labor Code.

Lastly, as results from themonitoring program are madepublic, system participants canbegin to self-regulate their prac-tice patterns to avoid sanctionsand reap potential regulatory ben-efits. Lower medical costs couldbe realized as over-utilizinghealth care providers begin toadjust their practice patterns to-ward the Texas median.

Notes to pages 24-281 See Research and Oversight Council onWorkers’ Compensation, “Health CareProvider Monitoring Results for Physi-cal Medicine Services”, Texas MonitorVol. 7, No. 2 Special Edition (August2002).2 To correct for missing or invalid mod-ifiers, if a bill had the accurate CPT codeand the payment received by the healthcare provider was a multiple of the pay-ment recommended in TWCC’s 1996Medical Fee Guideline, it was designatedas a WH or WC service. To correct forreported unit inaccuracies, ROC staff re-calculated the unit field by dividing to-tal payments per day of service by theappropriate per unit reimbursement inTWCC’s 1996 Medical Fee Guideline.While TWCC’s 1996 Medical Fee Guidelinedoes not specify a reimbursement valuefor CP services, earlier analyses conduct-ed by TWCC and ROC had concludedthat the median payment per unit of CPwas approximately $100. After the pro-cess of reassigning bills, recalculatingunits, and eliminating bills that werelikely to increase errors, ROC staff iden-tified for the study approximately136,000 WH services, 33,000 WC servic-es, and 32,000 CP services received byinjured workers in the first 24 monthsfollowing injuries sustained in 2000.

Board of DirectorsChair

Rep. Helen GiddingsVice Chair

Sen. John CaronaMembers

Rep. Gary ElkinsSen. Troy Fraser

Rep. Lois W. KolkhorstNancy Moore

Richard A. SmithSen. Leticia Van de Putte

Eddie Wilkerson

Research and Oversight Council on Workers’ Compensation • 9800 N. Lamar Blvd. • Suite 260 • Austin, Texas 78753Telephone: (512) 469-7811 • Fax: (512) 469-7481 • E-mail: [email protected] • Web: http://www.roc.state.tx.us

Research and Oversight Council on Workers’ CompensationScott McAnally, Executive DirectorAmy Lee, Research-Oversight CoordinatorAnthony Haynes, Business ManagerMario Gonzales, Administrative TechnicianJon Schnautz, Senior Oversight AssociateTeresa Cosper, Oversight Associate/Claims AssistanceD.C. Campbell, Senior ResearcherDana Baroni, Research SpecialistJoseph Shields, Research SpecialistXiaohua Lu, Ph.D., Research SpecialistAndrew Moellmer, Oversight Associate/Research SpecialistJerry Hagins, Public Information OfficerRachel Zardiackas, Information Specialist/Librarian

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