PURPOSE: This rule specifies the conditions under which the use of a managed care plan certified by the department will justify a premium discount on Workers’ Compensation insurance.

1. (1) Upon issuance or renewal of a Workers’ Compensation insurance policy, there shall be a reduction in the total premium charged to an employer for the policy for the first three
2. (3) years during which the employer contracts with a managed health care system which has met the certification requirements of this rule and which serves the geographic area in which the employer is located. The premium reduction shall be five percent (5%) of the total premium which would otherwise be charged to the employer for each of the three

3. (3) initial policy years under the certified managed care system. An insurer may require the employer to notify it of the employer’s intent to contract with certified managed care system and to execute any such contract, prior to the issue date or renewal date of the policy, before granting the reduction. This arrangement shall be evidenced by the following documents:

   1. (A) An endorsement to the Workers’ Compensation policy setting forth the use of the certified managed care system and the extension of the five percent (5%) reduction in premium. The endorsement may include provisions on the effect of the employer’s use of providers outside the terms of the managed care agreement;
   2. (B) A contract between the certified managed care system and the employer specifying the terms and conditions associated with the use of the managed care system, including the employer’s agreement that the use of the organization is the free exercise of the employer’s right to choose a health care provider under section 287.140, RSMo;
   3. (C) A certification of a managed care utilization form to be given to the employer’s insurer documenting the existence of the contract specified in subsection (1)(B), as set forth in Exhibit II of this rule; and
   4. (D) A Workers’ Compensation insurer and a certified managed care system may also enter into an agreement specifying the terms and conditions associated with the use of the managed care system.
4. (2) For purposes of this rule, the term certified managed care system or system shall mean medical care cost containment arrangements such as preferred provider organizations (PPOs), health maintenance organizations (HMOs) and other direct employer/provider arrangements designed to provide incentives to medical care providers to manage the cost and utilization of care associated with claims covered by Workers’ Compensation insurance, which have been approved by the department. The approval criteria for PPO arrangements are set forth in section (3) of this rule. The approval criteria for non- PPO arrangements shall be developed under section (8) of this rule.

5. (3) For purposes of this rule, the term Workers’ Compensation preferred provider organization (WC/PPO) shall mean a health care plan designed to coordinate employee care and control and contain costs for medical and rehabilitative services associated with Missouri Workers’ Compensation claims through the use of special provider networks, utilization review and case management procedures. In order to be certified, a WC/PPO shall meet the following requirements:

   1. (A) The WC/PPO shall contract with member health care providers who are authorized to provide health care services in this state by the appropriate licensing authorities;

   2. (B) Regarding contract requirements for medical and rehabilitative services, the WC/PPO shall—

      1. 1. Provide for convenient access to the

following types of providers in one (1) or more Missouri counties or cities not within a county:

1. A. Primary care physicians;
2. B. Subspecialty physicians;
3. C. Rehabilitation centers; and
4. D. Hospitals;
5. 2. Provide for convenient access to pri-

mary care clinics which are specialized in providing occupational medical services;

1. 3. Employ a medical director who is

board-certified in occupational medicine; and

1. 4. Possess the capability for progressive

rehabilitation services, including, but not limited to:

1. A. Functional, objective capacity

evaluations;

1. B. Psychological testing; and
2. C. Work hardening;

3. (C) Regarding additional WC/PPO contract requirements, the WC/PPO shall—

   1. 1. Provide employers with job-site pre-

sentations or other presentations regarding how to make proper use of the managed care services of the organization;

1. 2. Base charges on negotiated rates of

reimbursement to providers for the services specified in paragraph (3)(B)1. comparable to the best group medical plans in the geographic market area served, including provisions for basing inpatient services charges on diagnosis-related group (DRG) rates;

1. 3. Include the prepricing of claims;
2. 4. Provide monthly reports, on a claim-

by-claim basis, specifying customary charges, charges allowed under the WC/PPO contract and the resulting savings, if any; and

1. 5. Provide for the external management

and oversight from the initial date of injury by a nonhealth care provider of the health care provider’s rendition of medical care in all cases; and

1. (D) Be in addition, under the management and control of officers and directors who are competent to manage the WC/PPO-managed health care operations, its finances, its compliance with agreements between itself and insurers or employers, or both, and its compliance with any applicable laws of Missouri.

1. (4) Certification Procedure.

   1. (A) For purposes of obtaining the department’s certification of a WC/PPO, the orga- 20 CSR 500-6

nization shall provide the department with the following materials:

1. 1. Copies of any PPO/employer and

PPO/insurer contracts to be used;

1. 2. A general diagram of the WC/PPO’s

organizational structure;

1. 3. A listing of the WC/PPO’s officers

and directors;

1. 4. The WC/PPO’s most recently audited

financial report;

1. 5. A thorough description of the

WC/PPO’s experience with the management of health care costs associated with Workers’ Compensation claims and with other health care claims;

1. 6. The geographic area, by county, the

WC/PPO plans to serve;

1. 7. A copy of the certificate of the board-

certified medical director;

1. 8. A complete list of all primary care

physicians, subspecialist physicians, rehabilitation centers, hospitals and work hardening centers to be employed by the organization;

1. 9. The estimated savings to employers

and insurers from the use of the organization;

1. 10. The outline of the operation of the

WC/PPO to be provided to employers explaining their rights and responsibilities; and

1. 11. Any other materials requested by the

director.

1. (B) The materials specified in subsection (4)(A) shall be retained by the department. Any significant changes to the nature of the WC/PPO’s operations as reflected in these materials shall be reported to the department, but these reports need not be made more than twice a year, as measured from the date of the granting of any certification.
2. (C) The department shall review these documents and grant certification, on the form contained in Exhibit I of this rule, to those WC/PPOs deemed to meet the criteria set forth in this rule. Any departmental decision to deny certification shall be accompanied by a written explanation by the department of the reasons for denial.
3. (D) The department may suspend or revoke the certification of a WC/PPO at any time it establishes that the criteria set forth in this rule are no longer being met. Any such organization may request a hearing before the director on that suspension or revocation.

1. (5) Insurers writing Workers’ Compensation insurance in Missouri may contract with a certified managed care system. This contract may cover all employers insured by the insurer in the state, any class or subclass of employers, any employers located in a particular geographic region, or on any other basis which does not result in unfair discrimination under section 375.936(11), RSMo. Any employers who participate in this arrangement shall execute the contract required in subsection (1)(B) of this rule. For purposes of encouraging its insured employers to use a managed care system with which it has contracted, an insurer may offer premium reductions in excess of those required in section (1) of this rule. Nothing shall preclude an insurer from discussing the relative merits of different managed care systems with its insureds.
2. (6) Where an insurer has not contracted with a certified managed care system in a given geographic region, but that a system does operate in that region, upon a request by an insured employer, the insurer shall provide the insured the premium reduction specified in section (1) of this rule so long as the certified system is willing to provide health care services to the employer. The insurer, however, may apply the five percent (5%) premium reduction specified in section (1) only to that portion of the employer’s operations occurring in the geographic regions served by the certified system.
3. (7) Nothing contained in this rule shall be interpreted as precluding an employer from taking advantage of other noncertified managed care options at his/her own expense, particularly where the employer’s operations are located outside the geographic territory of a certified managed care system. The use of this system, however, shall not entitle the employer to a premium reduction by its insurer.
4. (8) The director shall establish an informal task force for fostering the widest possible use of managed care systems in Missouri in relation to Workers’ Compensation insurance. The task force may consist of volunteers representing insurers, managed care providers, employers and other interested parties. The task force will assist the department in developing approval criteria for approving additional managed care systems in Missouri. The panel will assist the director in developing approval criteria for PPOs that do not meet the criteria of section (3) of this rule, and of other managed care systems such as HMOs and direct employer/provider contracts, and the appropriate level of premium discount to be associated with these systems. They also may assist in the development of performance standards to measure the effectiveness of all managed care systems associated with Workers’ Compensation insurance. All meetings of the advisory panel will be subject to the state’s open meetings law.
5. (9) An insurer need provide a premium discount to an insured employer only for a three (3)-year period, after which time any reduction in the employer’s premium as a result of the use of managed care services shall be reflected in the employer’s experience modification factor. An employer shall not be entitled to more than three (3) years of specified premium reductions by reason of changing insurers, changing managed care systems or changing the ownership of the employer. Change of ownership rules regarding employers approved by the department concerning Workers’ Compensation shall apply to these cases.

AUTHORITY: sections 287.320, RSMo (Cum. Supp. 1992) and 374.045, RSMo (1986).* Emergency rule filed Aug. 31, 1992, effective Nov. 1, 1992, expired Feb. 28, 1993. Original rule filed April 14, 1992, effective Feb. 26, 1993. *Original authority: 287.320, RSMo (1939), amended 1982, 1992 and 374.045, RSMo (1967). Exhibit I Certificate of Authority Managed Care System for Workers’ Compensation (State Seal) Missouri Department of Insurance ____________________________________________________ It is hereby certified, that _____________________________________________________________________________________________, has met the certification requirements of section 287.320 of the Revised Statutes of Missouri and the corresponding rule. Said entity has been assigned the following departmental identification number: _______________________________________________. An employer who duly contracts with said entity shall be entitled to a reduction in Missouri Workers’ Compensation insurance premiums in the amount of ________________% for the premiums which would otherwise be charged for a period of three years. This certificate is a continuous authority and shall not be re-executed annually, and shall remain in full force and effect unless suspended or revoked by the Director. 20 CSR 500-6 IN WITNESS WHEREOF, I have hereto set my hand and caused to be hereto affixed the Seal of said said Department. Done in my office in the City of Jefferson, this ______ day of ________, ________. _________________________________________ (Director of Insurance) Insured: _____________________________________________________ Insured’s Address: _____________________________________________ Insured’s Contact Person:________________________________________ Named Insurer:_______________________________________________ Policy Number:________________________________________________ Certified Managed Care System:_______________________________________________________________________________________ Address: ____________________________________________________________________________________________________________ Missouri Department of Insurance Identification Number:____________________________________________________________________ Contact Person: _______________________________________________ The above-named Certified Managed Care System and the above-named Insured have entered into a contract, the form of which has been approved by the Missouri Department of Insurance, under which medical and rehabilitative treatments for all injuries to the Insured’s employees compensable under Missouri’s Workers’ Compensation laws shall be directed to the named Certified Managed Care System for treatment, at the named Insured’s direction and control, in accordance with section 287.140, RSMo. Authorized Signature: Received By: Exhibit II Certificate of Managed Care Utilization Certified Managed Care System: ________________________________________________ Title:_______________________________________________________________________ Insured’s Representative:_______________________________________________________ Title:_______________________________________________________________________ Insurer’s Representative:_______________________________________________________ Title:_______________________________________________________________________ Date:_____________________________________ Telephone Number:_________________________ Telephone Number:_________________________ Policy Effective Dates: __________ to _________ Telephone Number:_________________________