Workers’ Comp Costs Targeted by New HMO : Health care: Compremier’s pilot program launched in Orange County is believed to be the first of its kind in the nation.

PacifiCare Health Systems Inc. said Monday that it has created a pilot program in Orange County to attack medical expenses for treating workers hurt on the job.

The new program--a separate health maintenance organization for injured employees--is believed to be the first in the nation to apply the HMO prepaid concept for delivering medical treatment to the workers’ compensation arena.

PacifiCare said the new HMO, called Compremier, will guarantee a 10% savings on medical costs, the fastest-rising component in the skyrocketing expenses of California workers’ compensation benefits.

“The concept isn’t new, but no one else has done it before,” said Vicki Merrill, Compremier’s president.

The program differs from last year’s entry of FHP International Inc. into the workplace arena. FHP bought a San Diego workers’ compensation insurance carrier to offer a total 24-hour managed-care package for health and workers’ compensation needs.

Compremier is offering a panel of workers’ compensation physicians to provide medical treatment on a prepaid basis. Companies or their insurance carriers pay a lump sum up front, eliminating most of the paperwork and all of the billing afterward.

Compremier works only with insurance carriers and self-insured companies--including the Ross chain of discount clothing stores.

Merrill said the pilot project, which began June 1 with the employees of six Ross stores in Orange County, will last six months and will try to include up to 10,000 Orange County workers at various companies.

If the plan is successful at reducing medical costs, the company will take the program statewide to insurers and self-insured employers, regardless of whether they are under a PacifiCare HMO plan.

“Only a year or so ago, medical costs made up 25% of the total workers’ comp cost,” Merrill said.

Today it is 49% of the total cost, said William P. Molmen, general counsel for the California Workers’ Compensation Institute, an insurance industry trade group based in San Francisco.

Though PacifiCare’s program is not a new idea, Molmen said, “this is a very positive step.”

Blue Cross of California also is expected to weigh in soon with its own version of managed care to reduce workers’ compensation costs, a company spokesman said.