PacifiCare Signs Deal With Workers’ Comp Insurer : Health: Agreement with Liberty Mutual, believed the first of its type, could give the HMO a big boost.

PacifiCare Health Systems Inc. and a major insurance company in Boston signed a deal that they said Tuesday would save employers money by allowing them to send injured workers to a health maintenance organization for the first time.

Liberty Mutual Insurance Group said it believes this is the first time a workers’ compensation insurer has teamed with an HMO in this type of arrangement. Liberty Mutual, with more than $20 billion in assets, sells workers’ comp and other types of insurance nationwide.

PacifiCare, with headquarters in Cypress, has more than 1 million members, mostly in the West, and this deal could give the HMO operator a big boost, said an analyst who follows the company.

“The workers’ comp market is a huge one, and it’s virtually untapped by HMOs,” said Thomas E. Hodapp of San Francisco investment bankers Robertson, Stephens & Co. “This could be pretty meaningful for them.”

Health maintenance organizations offer lower health costs but restrict patients’ choice of a doctor to the HMO’s own physicians or those with whom it contracts.

So injured workers whose companies elect to have an HMO would be restricted to the private doctors participating in this program.

But since it should be cheaper, the new plan will be popular with employers, Liberty Mutual hopes.

The insurer, which plans to sign similar deals soon with managed health providers on the East Coast, said it expects its competitors to follow with their own HMO deals as it becomes clear that the arrangement is profitable for HMOs and cuts workers’ comp costs for employers.

Workers’ comp is insurance paid for by employers and required by the states, covering employees who are hurt on the job.

The arrangement between Liberty Mutual and PacifiCare should also help reduce fraud in workers’ comp claims, because the deal gives the HMO an incentive to get workers back on the job as soon as possible. California’s workers’ comp system, critics says, is rife with fraud.

“This agreement represents a new form of partnership between the managed-health-care community and the insurance industry,” said Thomas Ramey, a senior vice president at Liberty Mutual.

For PacifiCare, the deal looks like the best way into the workers’ comp market.

“Some HMOs have bought insurance companies, and some insurers have bought HMOs,” said Vicki Merrill, president of Compremier, PacifiCare’s workers’ comp unit. “But we decided we could best use each company’s strengths through this kind of alliance.”