Ohio Workers’ Comp Bureau SetsNew Rates for Hospitalized Workers

Stung by reports of high medical costs, the Ohio insurance fund for injured workers has proposed to cut the amount of money it pays to reimburse hospitals.

The Bureau of Workers’ Compensation will reduce its reimbursement rate for inpatient care from 70 percent of allowed charges to 55 percent beginning in October, said Tina Kielmeyer, the bureau’s interim administrator.

For outpatient treatment, the bureau would reduce the reimbursement rate from 60 percent of allowed charges to 50 percent.

The charges are those costs determined by the bureau to relate directly to the treatment of an on-the-job injury. The plan, to run through 2006, could save $50 million, Kielmeyer said.

Hospital officials said the plan could further hurt their ability to provide care, pointing out hospitals already lose money from Medicare and Medicaid reimbursement rates.

But labor groups said the hospitals’ bottom line should not drive the state’s payment plans.

“It’s not the job of this agency to make up the profit margins of hospitals,” said Scott Courtney, executive vice president of the Service Employees International Union District 1199.

The union’s analysis of bureau records found that during the past seven years, the bureau paid hospitals about $544 million above their actual costs to treat injured workers.

Bureau records show payments to hospitals rose 80 percent between 1997 and 2003, even though the number of injured workers dropped by nearly a third.

Business groups expressed concerns that hospitals that do a good job treating injured workers might suffer under the plan.

“I don’t know what the right reimbursement methodology is–that’s for the experts to figure out,” said Pat Grischow, a government relations spokeswoman for Canton-based Timken Co. “We want to make sure injured workers get the best care and the right treatments. That’s the point.”

Under the agency’s short-term plan, 60 hospitals would probably be reimbursed below their costs, Kielmeyer said.

Gov. Bob Taft supports the plan, calling it fair. The bureau’s medical expenses came to light during the state’s ongoing investment scandal involving $300 million in losses in questionable investments by the bureau.

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