What Is The Difference Between MCOs and TPAs

Managed Care Organizations

MCOs are the principal connection between injured workers, employers, medical providers and the Bureau of Workers’ Compensation. Created by the Ohio legislature and then-Governor Voinovich after voters overturned their efforts to privatize Ohio’s workers’ compensation system in 1997, MCOs are medical cost containment companies. They oversee claim filing and supervise medical treatment and employer return-to-work programs. MCOs add additional levels of bureaucracy to claims processing previously managed by BWC Claims examiners (now known as CSS or Claims Service Specialists) as its decisions may be appealed through two levels before reaching the BWC. This can delay treatment by months.

MCOs direct the medical management of workplace injuries and occupational diseases. They assemble initial injury data and medical documentation, approve or deny treatment and testing, pay bills related to the claim and focus on returning injured employees to work soon.

All employers must choose one of 13 MCOs recognized by the BWC to manage their workers’ compensation claims. MCOs are paid by the BWC through premiums paid by employers into the State Insurance Fund. Employers can select or change their MCO every two years.

Third Party Administrator

Unlike MCOs, required for all Ohio employers to direct medical management of workers’ compensation claims, TPAs are neither required nor regulated by the BWC. They can be hired by employers at any time or not.

TPAs are private businesses hired by employers to help with the financial and administrative details of workers’ compensation claims. Slightly less than half of Ohio employers have a TPA representative.

TPAs can assist employers in reducing their workers’ compensation premiums through discount plans such as group rating, retrospective rating, self-insurance and others. They also represent employers at Industrial Commission hearings, process appeals, schedule defense medical examinations, file motions to terminate treatment and compensation payments and negotiate claim settlements.

To summarize, MCOs direct the medical aspects of a workers’ compensation claim while TPAs represent employers in processing claims and minimizing their workers’ comp expenditures and claim costs.

James Monast
Fighting for Ohio’s Injured Workers and their Families