After spending $1 million trying to set up a program to meet California requirements to treat injured workers under state workers' compensation reform laws, Cigna HealthCare has scrapped the project.
Employers want HMOs to enter the workers' compensation market and apply the techniques of managed care in a capitated system. At the same time, HMOs are eyeing the $4 billion spent annually on medical care for injured workers in California.
But the state law and regulations designed to implement it are too complicated to encourage HMOs to apply to become "certified healthcare organizations" to treat injured workers, said Jennifer Christian, M.D., Cigna's director of occupational health and safety in Glendale, Calif.
"The market is willing, but it is being regulated before it is born," she said.
Cigna would have had to spend another $4 million to get the program up and running, said Rochelle Glassman, a management consultant who worked with Cigna on the project.