IR # 97-18
Thursday, March 27, 1997

Rick Rice
(415) 972-8835
Richard Stephens
(415) 975-0700

DWC Certifies Kaiser Foundation Health Plan As Latest HCO

SAN FRANCISCO -- One of the more innovative of the 1993 workers' compensation reforms, designed to hold down costs and provide quality medical care to injured workers by introducing managed care techniques into the system, experienced increased growth in recent months, Lloyd W. Aubry, Jr., Director of the Department of Industrial Relations announced.

The number of enrollees in plans offered by certified Health Care Organizations (HCOs) has tripled in the first few months of 1997 -- from 15,000 at the beginning of the year to 45,000 currently -- and on March 14, one of the biggest health care providers in the state, Kaiser Foundation Health Plan Inc., was certified as the ninth HCO in the state.

"We are gratified that this program is starting to show its potential to provide quality care for injured workers as well as allow employers to better control their workers' compensation costs," said Casey L. Young, administrative director of the Division of Workers' Compensation, in welcoming the participation of Kaiser into the program.

"Kaiser Permanente is pleased to have been awarded a provisional license for our Health Care Organization to serve our northern California customers in the California Division of Kaiser Permanente," said Kaiser Occupational Health Manager John Ireland. "We are also exploring extension of the HCO geographic area to southern California with an eye to better serve our statewide and southern California customers."

The majority of those who have enrolled since the beginning of the year are in a plan offered by FHP Life, the first certified HCO, which is currently covering 350 employers in its program.

DWC's managed care program was created as part of the 1993 workers' compensation reforms to control the spiraling medical and other costs in the system. Under the program, employers and insurance carriers can contract with HCOs that have been certified by DWC to provide occupational health care services to injured workers using managed care techniques.

The legislation provides that employers participating in an HCO plan can obtain up to 365 days of control over the injured employee's medical care. Employers currently have medical control for a maximum of 30 days after the injury. Employees may enroll in a plan offered by the employer or they may opt not to participate by predesignating another doctor or medical facility to treat their work related injuries.

Three types of medical providers may apply for HCO certification: Knox-Keene Health Care Service Plans (HMOs); disability insurers licensed by the Department of Insurance; and any entity authorized as a Workers' Compensation Health Care Provider Organization (WCHCPO) by the Department of Corporations.

Potential applicants may obtain more information or an application by calling the Managed Care Program office at (415) 975-0734.