Mythbusters: Debunking Common Misconceptions about Texas Option Programs
By Kelly Norwood, Vice President of PartnerShip Services for PartnerSource
Opting out of the Texas Workers’ Compensation system is becoming more and more common in the state of Texas. This innovative way of managing work injuries is here to stay. Even with the increase in businesses operating in Texas using this method to improve outcomes while lowering costs, there is still misunderstanding about how a Texas Injury Benefit Plan can work.
Here are three common myths about the innovative Texas Option programs:
Myth #1: THERE ARE NO “IMPAIRMENT BENEFITS” PAID IN TEXAS OPTIONS PROGRAMS.
This misunderstanding stems from the fact that most injury benefit plans do not define or assign impairment benefits based on an A.M.A. calculated impairment rating (like Texas Workers’ Compensation does). Every workers’ compensation system in the U.S. either attempts to quantify an injured worker’s impairment value (through AMA guidelines) OR allows parties to negotiate settlement values that consider pain and suffering, permanent impairment, future medical and future income earning potential.
Busted: In a Texas Option program, the employer and employee have unlimited creativity and options in customizing a settlement outside of an injury benefit plan. These settlements are customized and often go above and beyond what a medical guideline may award an injured worker. At PartnerSource, we work with our clients to broker custom solutions that are not limited or stifled by government red tape or pre-set impairment calculators. Working closely with our program medical directors, claim resources and client partners, we are able to craft customized “impairment benefit” solutions that directly address injured worker’s needs, rather than relying solely on cookie-cutter rating calculators that often do not account for all of an injured worker’s needs.
Myth #2: LIABILITY EXPOSURE IS “OUT OF CONTROL” AND LITIGATION IS WIDESPREAD.
Busted: Liability exposure is managed by paying generous plan benefits (often out-performing income benefits covered by statutory workers’ compensation systems) and offering custom solutions to claims or injuries that could exceed benefit plan coverages. In reality, less than 1% of all claims from employees of PartnerSource clients result in litigation in the courts or arbitration hearings. Liability exposures are also controlled, insurable and managed with excellent insurance carrier partners for losses that may exceed benefit plan coverages.
Myth #3: TEXAS OPTION PROGRAMS SAVE MONEY BY DENYING CLAIMS.
Busted: This may be the most common myth of the Texas Options programs. The truth is overall claim denial rates for employers in Texas Option programs are very similar to statutory workers’ compensation rates. Savings in these programs come from several basic improvements in efficiency and prompt intervention. Texas Option program claims begin with evidence-based decision-making (claim and medical) and early intervention (claim and medical). This requires better claim investigations and better diagnostic care.
How exactly is money saved through better outcomes? Let’s take a closer look at the math:
Immediate Claim Reporting (tempered by Good Cause to protect the Employee) = Better Investigations = Accurate, Well-communicated Decisions = Savings. Texas Option programs balance employee accountability and enforcement of prompt reporting protocols with employee needs. This allows administrators to conduct timely and comprehensive investigations, making better, more accurate decisions that are promptly communicated to the injured workers.
Early Claim and Medical Intervention = Better Medical Outcomes = Better Return to Work = Savings.
• Best Specialized Medical Care = Savings: For urgent care and significant injuries, medical specialists (who may not treat a traditional workers’ compensation claim) are available in Texas Option networks, including many board-certified physicians and surgeons. Timely treatment from experienced medical experts improves outcomes on injuries.
• Accurate Coverage Decisions Focused on the Work-related Injury = Savings: Most PartnerSource Texas Option Programs have specialized medical resources that support the claims administrators in order to enforce evidence-based medical treatment guidelines and forensic medical processes to define the covered injury as part of the initial investigation. This is designed to focus treatment on ‘new damage or harm’ caused by a work accident, while excluding ordinary diseases of life or underlying conditions that are unrelated to the work injury.
• Better Return to Work Outcomes = Savings: In addition to accurate coverage decisions focused on acute work injuries, this claim and medical partnership also results in improved return to work outcomes (objectively measured and confirmed).
Better Safety = Better Loss Experience = No Moral Hazard = Savings. The best work injury claim is the one that never occurred! PartnerSource has multiple client examples of employers timing their opt-out from workers’ compensation with new and improved safety and loss prevention (and documentation) protocols.
With great control comes great responsibility. Responsible Texas Option programs focus on early intervention and paying benefits where there is true need and where the clinical and claim evidence supports coverage. Contact a PartnerSource attorney team leader if you hear of other myths or misunderstandings about these programs that need to be busted!