This pilot project will test a potentially significant innovation in health care. 24-Hour Coverage melds together components of general health coverage and workers' compensation coverage. Participating employees will receive medical services for any injuries or illnesses from a single provider-regardless of whether the injury or illness was related to work or not. This system seeks to eliminate costly administrative duplication between general health and workers' compensation insurance coverage. In turn, this savings would reduce health care costs and employer premiums.
The idea of 24-Hour Coverage is not new. A common question posed by employers is, "Why must we buy workers' compensation insurance for work-related injuries when we also purchase general health insurance for our employees? Isn't there some duplication, even if only administrative? Couldn't one policy provide medical treatment?"
These concerns raise excellent points. Administrative aspects of the two types of coverage are duplicative, and California's pilot will attempt to reduce these costs. Outside of California, only Oregon has started a pilot. The Oregon program began in January. President Clinton's health reform task force explored integrating general health coverage and workers' compensation. The proposal submitted to Congress, however, called for a study of the idea and possible inclusion later.
California's pilot is the result of Assembly Bill 3757, which Governor Pete Wilson signed in 1992. It called for the Division of Workers' Compensation (DWC) to establish pilots in four counties throughout the state. DWC adopted implementing regulations last year, and designated four counties for the pilot: San Diego, Los Angeles, Santa Clara, and Sacramento. Participation in the pilot is open to the following parties: employers; HMOs; health, disability or workers' compensation insurers; employers self insured for workers' compensation coverage; state agencies; multi-employer, collectively-bargained welfare benefit plans; employee welfare benefit plans sponsored by a state employee union; and health insurance purchasing cooperatives.
The pilot project's key elements are:
Besides reducing administrative duplication and premiums, 24-Hour Coverage has other potential benefits for employers and employees. It offers the potential of assured access and continuity of care, and less litigation over whether an injury or illness was work-related and the general health or the workers' compensation insurer is liable.
California's 24-Hour Coverage pilot will last for three years. Upon its conclusion, DWC will prepare a study reviewing employer costs and various aspects of medical treatment-including whether and how injured workers returned to work and whether they were satisfied with the care.
Despite broad interest in the concept of 24-Hour Coverage, several legal and logistical obstacles need to be resolved before such an approach can be applied broadly. Limited pilot programs, such as the one DIR is launching, offers the appropriate means of testing the feasibility of such broad change.
DWC will accept applications for participation in the pilot until the end of March. To date, DWC has spoken with over 100 interested parties and had applications returned.