"Frank Pennachio is one of the smartest people in workers comp. His piece on the complicity of employers in screwing up their own claims published in Risk and Insurance is just terrific.

TPAs are making a lot of money on managed care. At least in part, that's because employers are hammering them on claims handling costs. There is just no way that a TPA can effectively adjudicate a lost time claim for $1200 for the life of the claim/contract.

So, they have to make up the margin somewhere, and managed care is that 'somewhere'.

Here's Frank's summary:

"Claims administration contracts between employers and their insurance companies or third-party administrators have created a cycle of misaligned incentives and unintended consequences.

Many employers have lost sight of what a workers' compensation program is supposed to do, and vendors have created products and services that often drive costs up instead of down."

- Joe Paduda, principal
Health Strategy Associates
www.managedcarematters.com

"We joined the group because of our belief and trust in Frank. Frank has more knowledge of the inner working of the Work Comp system than any agent or educator that I know of! Frank has that immeasurable quality of salesmanship and trust, and believability that few people have. Frank is also able to bridge the gaps for us to be able to help our clients understand the fact that workers compensation is something that with proper controls and education they can take control of their own destiny and drive their costs down to the lowest possible cost."

- Shawn Cummings
Green Point Insurance Group, Inc.
http://www.greenpointins.com/default.cfm

"The Workcomp advisory group is one of the 'help groups' that come along that a wise agent cannot afford not to be a part of. Frank and Susan are on top of their game and are willing to share what they know to those that want to stay on the cutting edge of work comp. It's always good to have a community of agents to share specific issues and successes that come up to help you avoid pitfalls in the marketplace. Do not put off getting involved."

- Jimmy Swain
James M. Swain & Assoc. Inc.
http://www.swaininsurance.com/home.asp

"The practical knowledge shared by both Frank and Susan continues to be most useful in the real world of meeting prospective clients and demonstrating how we, as Advisors, can help by providing practical solutions to workers' comp issues. The road maps layout for Advisors by them allows all of us to use our time more efficiently and to be more effective in our practice. The open exchange of ideas allows Advisors to question and evaluate currently techniques and strategies in an effort to improve our own skills and those of fellow Advisors. I know of no better resource that the Workers' Comp Advisory Group to help improve our abilities to help our clients and to receive appropriate compensation for our efforts."

- Tom Bone
ISU Group
http://www.isugroup.com/isuis/isuis_default.aspx