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Media Advisory: Oct. 30, 2009
BWC Board of Directors Tackles Busy Agenda
COLUMBUS – The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors today streamlined rules related to
medical coverage, hired an investment manager and reduced the credibility table which is used to determine the
maximum discount for group-rated employers. The new table reduces the maximum discount to 65 percent, effective
July 1, 2010. The current maximum discount is 77 percent. This revision also lowers the minimum qualification
for experience adjustments, an action that will positively impact the rates of smaller employers with strong
safety records.
“Today’s vote represents another step in our efforts to bring equity to what each Ohio employer pays for their
workers’ compensation insurance coverage,” said BWC Administrator Marsha Ryan. “There are many factors to consider
when making decisions that obviously impact the bottom line of Ohio business owners. I’m confident our rate reform
efforts are having a positive impact on the majority of employers, and will solidify Ohio’s workers’ compensation
services and offerings for years to come.”
BWC’s rate reform efforts were set in motion by changes enacted by the 127th General Assembly’s House Bill 100,
passed in June 2007. The legislation required a comprehensive study of BWC’s rate setting methods, including the group
rating program. Today’s action is part of the Board of Directors’ multi-year plan to bring stability, fairness and
equity to all employers. In addition to lowering the maximum group discount, the Board of Directors approved
modifications to the break even factor (BEF), which was established in April. The BEF adjusts the discount level
based on the overall risk of the group to ensure its premiums reflect their risk. The BEF is a crucial component
of rate reform because it brings the premium paid by group-rated employers more in line with their claim costs
while still allowing BWC to continue offering significant group discounts.
It should be noted that changes in the maximum discount are not enough to make the group rating program actuarially
sound. All studies on group rating indicate that groups should maintain the same membership for many years to establish
a solid experience history. They should also bring together more similar businesses with common safety needs.
This homogeneity of group membership will bring more stability to group rates in the future. BWC is currently
exploring rules designed to maintain continuity in group membership and to increase homogeneity within the groups.
In other business, the board approved a new inpatient hospital fee schedule which supports BWC’s guiding principle
to ensure access to quality care for Ohio’s injured workers. The fee schedule establishes the maximum reimbursement
allowed for medical treatments and services related to hospital stays and will increase overall reimbursement rates
by 2.9 percent. Inpatient hospitalization may be the first treatment following an injury, or part of later treatment
necessary to return an injured worker to employment. “Effective inpatient services are critical as they are necessary
for our most seriously injured workers,” said Bob Coury, BWC’s Chief of Medical Services.
The board also adopted BWC’s recommended changes to Chapter 6 Health Partnership Program rules and Chapter 7 Payments
to Healthcare Providers rules. Chapter 6 and 7 rules govern provider credentialing, access, oversight and reimbursement;
Qualified Health Plans, and Managed Care Organization services. The review covered 130 rules, of which the adopted rule
recommendations rescinded 30 rules, amended 46 rules, and combined combining 37 others.
The board also adopted new rules related to medical providers including the certification of providers participating
in the Health Partnership Program (HPP) and the Quality Health Program (QHP). The HPP and QHP are the managed care system
which oversees the medical treatment of injured workers, and provider access to the programs. Also adopted were rules
related to the Managed Care Organizations (MCO) including MCO participation, application, certification, payment,
scope of services, medical treatment guidelines, and MCO payment to providers within these programs. All rules were
developed within the guidelines established by Governor Ted Strickland’s Common Sense Business Regulations to amend
or rescind contradictory, redundant, and needlessly burdensome rules.
The Board of Directors also approved the hiring of State Street Global Advisors as a BWC Passive Index Manager for
the State Insurance Fund (SIF). State Street responded to a request for proposal posted by BWC on July 2, 2009. State
Street will manage assets of the SIF under the supervision of the BWC Investment Division.
Finally, the board hosted a public forum this morning, which provided an opportunity for Ohio business owners,
medical providers, injured workers and other interested parties to address them on the services and future direction
of BWC’s Division of Safety and Hygiene. More than 25 speakers discussed how BWC’s safety services impact their business.
The next BWC Board of Directors meeting will be held Friday, November 20, 2009 at 8 a.m. in Room 3, Level 2 of the
William Green Building, located at 30 W. Spring St., Columbus.
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Ohio Bureau of Workers’ Compensation Board of Directors
Chairman William Lhota, SI Employers | Charles Bryan, Actuary | David Caldwell,
Employee Organizations | Alison Falls, Investment & Securities | Thomas Pitts,
Employees | Kenneth Haffey, CPA | James Harris, Employee Organizations |
James Hummel, Large Employers | Jim Matesich, Small Employers | Larry Price,
Public | Robert Smith, Investment & Securities
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