Medical Cost Containment

The purpose of this section is to assist each member in maximizing the best medical care available for its injured workers in the most economically beneficial manner possible.

Managed care has had a long history in workers compensation. The first generation of managed care focused primarily on medical fee schedules and bill reviews. These functions could be done in-house or by an independent vendor. These vendors were usually paid a percentage of the savings.

In the early 1990s, hospital costs began to shift into areas without strong cost containment. As a result, the contracting with Preferred Provider Organizations (PPOs) began, along with negotiating discounts and utilization reviews. The PPOs network is measured by the extent to which managed care operations are put in place to provide treatment to injured workers. This, along with the average discount for fee schedules, has become the prevalent practice.

Understanding the overall benefits of a managed medical plan has been the initial force behind this program. The difference between managed care of a personal hospitalization plan and workers compensation claims are dramatically different. By focusing on returning the worker to full health and productivity as quickly as possible, the workers compensation industry has a good basis for portraying its goal as fundamentally different from health insurers. In workers compensation, we are concerned with the overall plan of getting an injured worker back to either a pre-injury work status or back into the work force as a productive, self-sufficient individual. ACIG, along with its insureds, desires to provide for injured workers the most complete medical care by utilizing the opportunities available to create this environment.