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Background
<br />During the November, 1993 special legislative session, Florida's Workers' Compensation Law, 440 Florida Statutes,
<br />was substantially amended. The numerous changes have become well known throughout the nation as Florida
<br />attempted to control escalating costs through a variety of techniques. One of those cost control measures, the
<br />Managed Care Arrangement (MCA), found in Chapter 440.134, FS, is presented today for Board action.
<br />Analysis
<br />One of the concerns of the Legislature was the rapidly increasing cost and utilization of medical care. While some
<br />insurers carefully monitored these issues, others were not as diligent. Self -insurers or those with substantial self-
<br />insured retentions, such as the County, have always been mindful of these. Nevertheless, when the legislation
<br />ganged, all were affected. While many of the features of an MCA can be beneficial, many public risk managers
<br />throughout the State expressed concern that the State, through its Agency for Health Care Administration, was
<br />charging each entity a $1,000.00 filing fee to rem its compliance with the ganged law. This County, for example,
<br />has one of the five (5) lowest experience modification, or workers' compensation loss rates, of the over 400 public
<br />entities participating in the Florida League of Cities' excess insurance pool. There has been some discussion that
<br />the 1997 Legislature may revisit this requirement, but the deadline for compliance, albeit without any penalty for
<br />noncompliance, is upon us.
<br />Effective January 1, 1997, all employers shall furnish medically necessary remedial treatment, care and attendance
<br />solely through an MCA. For the past five (5) years, upon the recommendation of Waters Risk Management
<br />Consultant Services, the County has worked with Insurance Servicing & Adjusting Company (ISAC) as the third party
<br />claims administrator. Because the County's program through ISAC currently- enforces sound managed care
<br />practices, we propose to partner through ISAC with CorVel Corporation (CorVel), an MCA offering a basic
<br />compliance option to meet the State mandate. Through this basic option, ISAC and CorVel offer assistance with
<br />the Application/MCA filing with the State; the preferred provider network; assistance with employee education;
<br />education to primary care physicians; quality assurance program; MCA mandated grievance procedures; and fling
<br />an annual grievance report to the State.
<br />Although other corporations offer such MCA services, staff recommends that the Board approve this partnership
<br />as best meeting the County's needs. ISAC is a long-standing partner. Additionally, CorVel has developed its own
<br />network of participating physicians unlike some other such businesses who lease their networks from major health
<br />insurers. You may recap that in 1991 the County entered into an ongoing contract with Gold, Vann & White, doing
<br />business as Doctors' Clinic (Clinic), to provide primary workers' compensation care for injured County employees.
<br />We have enjoyed.a very good working relationship with the Clinic and with the advent of the statutory change, we
<br />wanted to continue to utilize the Clinic which is part -0f CorVel's own network. Equally important, the basic
<br />compliance option through ISAC and CorVel is the most cost-effective way to approach this issue.
<br />Cost for the County will be calculated as a percentage of savings gained as a result of the MCA. CorVel will be paid
<br />23% of savings; no payment will be made if no savings are realized. The following example illustrates the
<br />arrangement. Physical therapy billed by the provider at $50.00 is now paid according to the Florida Fee Schedule
<br />at $28.00. Through the MCA, an additional savings of $220 will be realized, with $1.70 retained by the County and
<br />$0.50 paid to CorVel.
<br />The attached Letter of Agreement provides the outline for a more definitive contract to be finalized within sixty (60)
<br />days. Staff believes this proposed arrangement with CorVel, through partnership with ISAC, provides the best
<br />manner to meet the State mandate.
<br />Recommendation
<br />Staff recommends that the Board enter into an MCA with CorVel for the period January 1 through September 30,
<br />1997, to comply with the State mandate. As staff previously advised the Board, the County's entire insurance
<br />Program, inducing claims administration and MCA services, will be remarketed this fiscal year for the year beginning
<br />October 1, 1997, and, therefore, this service may be provided by another corporation as a result of that remarketing
<br />process.
<br />Staff recommends the Board: (1) approve the Letter of Agreement with CorVel Corporation and authorize the
<br />Chairman's signature; (2) approve the Application for Worker's Compensation Managed Care Arrangement and
<br />authorize the Chairman's signature; and (3) authorize staff to finalize a definitive contract with CorVel within sixty (60)
<br />days of the Board's action.
<br />DECEMBER 17, 1996 106
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