The Value of Bundled Care Management in Workers’ Comp

HERO^SM MSK, the industry’s first risk-bearing, value-based care solution for high-acuity musculoskeletal injuries, brings predictability, cost certainty, and a unified care experience to a historically unpredictable patient journey.

Built on Paradigm’s 35+ years of expertise in catastrophic care management, HERO MSK delivers data-driven certainty, a deeply supported and personalized patient experience, a curated network of high-performing providers, and guaranteed functional outcomes.

The results speak for themselves: 90% return to work in less than six months after surgery¹, <6% attorney representation¹, nearly 95% patient engagement¹, and confidence restored where it matters most.

But most workers’ compensation cases do not look like this. Today, the system is fragmented which leads to delays, cost creep, and inconsistent outcomes. Why? Because a critical piece of the puzzle is missing—bundled care.

The problem: bundles are missing from workers’ comp
Over the past decade, bundled payments have grown into a key part of care delivery across healthcare. Like bundling a flight, hotel, and attraction for an all-inclusive travel package offers value and convenience, healthcare bundles align incentives, encourage coordination, and reduce administrative loads. 

For example, Medicare’s Comprehensive Care for Joint Replacement (CJR) program combines hospitalization, surgery, anesthesiology, implant, and post-acute care into a single bill that has resulted in a 3.6% reduction in payments.²

Through a single, predetermined payment for all services related to an episode of care, payers and patients alike can see lower costs, better outcomes, and improved experience. But while bundle-based programs have been extremely successful in commercial healthcare, workers’ compensation is still largely driven by a fee-for-service system that prioritizes activity over results.

“Fragmented care and misaligned incentives in workplace injury care have driven unacceptable variation in cost and outcomes,” says Lauren Rashford, PT, DPT, Vice President of Clinical Product Solutions at Paradigm. “Thoughtfully designed bundles that center the entire system on recovery gives the industry a path toward predictable, value-based results.”

Four drivers of a fragmented system
The workers’ compensation system has unique characteristics that contribute to fragmentation and have made adopting episodic, value-driven care a challenge, including:

A State-driven system: Because regulations for work-related injuries are determined on a state-by-state basis, there is a wider variance in fee schedules compared to Medicare and general health.
Fragmented provider networks: Workers’ comp provider networks are oriented to state-specific reimbursement, meaning plan administrators and payers often lack integrated provider relationships.
High case variation: Workplace injuries as a category have high variation when it comes to diagnosis, severity, and comorbidities, leading to difficulties in defining what a standard episode looks like.
Lack of data transparency: The industry is notorious for siloed data, which is a barrier to establishing the benchmarks and cost data necessary to set bundled rates.

As a result, workplace injury care continues to be a largely fragmented, fee-for-service care delivery system that penalizes payers and patients alike.

“The industry’s current model is like a delivery truck that gets paid for every stop it makes, not for delivering the right package,” explains Rashford. “Instead of prioritizing efficient routes, accuracy, and customer satisfaction, logistics companies would be incentivized for volume.”

Fragmented care, high costs
For injured workers, this emphasis on tasks and volume too often translates to disengagement, dissatisfaction, and prolonged recovery. For stakeholders, it means unpredictable costs, excessive bill review and scrutiny, increased indemnity exposure, higher litigation rates, and a wide variation in outcomes.

In fact, medical costs in workers’ compensation regularly exceed general health, with shoulder injury services alone costing approximately 67% more, according to research from the National Council on Compensation Insurance (NCCI).³ A combination of case management services billed at an hourly rate, medical bill review fees billed at percentage of savings model, and markups from managed care providers on ancillary services—combined with the disjointed gathering of data and information—drive uncertainty of cost, uncertainty of care, and uncertainty of outcome.

An epidemic of creeping catastrophic loss
These factors have an especially negative impact on what should be routine musculoskeletal injuries. For a growing number of outlier cases, recovery and return to work can turn into longer-term disability durations with unnecessary surgical procedures, compromised rehabilitation, and emerging behavioral health concerns.

The solution: value-based, bundle-driven care
A fragmented system, growing costs, and increased disability rates all speak to the need for value-based, bundle-driven workplace injury care that can deliver:

Predictable, transparent costs based on claims data modeling of episode length, outcome, and cost
Reduced disputes and bill review pain points, thanks to fixed pricing and a single bill
Better alignment through providers incentivized to deliver faster, more effective recovery
Overall better patient experience through more meaningful patient engagement
Reduced disability days and litigation leading to a reduction in indemnity costs

HERO MSK brings to workers’ compensation what commercial healthcare has successfully leveraged for years: validated clinical pathways paired with fixed-price, outcomes-driven bundles. By applying this proven model to high-acuity musculoskeletal injuries, this program introduces long-overdue predictability, cost certainty, and a more coordinated patient experience to one of the most volatile segments of the industry.

Much-needed certainty for volatile musculoskeletal cases
By delivering a competitive fixed-price model and guaranteeing functional outcomes, HERO MSK aligns care while increasing cost certainty and reserve accuracy for payers and plan managers.

“Paradigm has a 30+ year track record built on bringing a bundled-care approach to the most challenging and serious workplace industries”, says Rashford. “Now, we have identified a crucial gap in the market for non-catastrophic, high-acuity claims where traditional fee-for-service management has contributed to high volatility.”

Here is why Paradigm is uniquely positioned to bring this much-needed approach to the industry:

Proactive Care that Reduces Risk: A team that acts immediately to identify risk factors and early barriers while providing personalized support that prevents complications and avoids unnecessary utilization.
Data that Drives Faster Recovery: Paradigm has an unmatched data repository built on decades of case insights, enabling accurate modeling of episode length and cost to guide adherence, optimize care, and drive a successful return to functional activity.
A Network Built for Excellence: Our curated network of top orthopedic specialists and ambulatory surgery centers ensure access to the right providers for the full range of MSK injuries, conditions, and disorders to reduce fragmentation, ensure consistency, and deliver full accountability.
Full Continuity, from Start to Finish: We are a single accountable partner managing MSK cost, quality, and outcomes while easing workload and freeing adjuster bandwidth.

Bundling treatment in workers’ compensation increases certainty for what has traditionally been a volatile and unpredictable system. Payers and plan administrators achieve medical cost certainty that ensures accurate reserve planning, certainty in direction that relieves administrative burden, and certainty of outcome that promotes organizational stability and ultimately enables injured workers and families to get back to their lives.

Real world impact
For existing HERO MSK clients, Paradigm’s commitment to certainty in value and outcomes has delivered:

Learn more about HERO MSK and the power of value-based, bundled care management.