Commonwealth of Virginia Workers’ Compensation Services Case Study



In 1997, the Virginia Department of Planning and Budget conducted a study of the State’s Workers’ Compensation Program.  In total, thirty-seven recommendations were made to reduce cost and strengthen the workers’ compensation program’s fiscal position, improve services to the injured worker, assist agency representatives with the reporting and management of claims, and return injured workers to gainful employment.   The Program was outsourced in a competitive bid process and awarded to Managed Care Innovations, now known as MC Innovations (MCI), effective July 1, 1998.


The Commonwealth of Virginia provided management oversight of the State’s Workers’ Compensation Program through The Department of Human Resource Management (DHRM), Workers’ Compensation Services (WCS). The Program was also supported by The Office of The Governor through Executive Order 109 (2010) which addresses Workplace Safety and Employee Health.

In coordination with Workers’ Compensation Services, MCI, a Virginia Certified Small Business, served as the General Contractor of the Program.  The MCI model provided single contract administration, fiduciary accountability, and management of all services associated with the timely and accurate payment of claims with the goal of controlling total program costs. Under the banner of Total Program Management, MCI provided a Team of specialty service providers to meet the unique needs of the Commonwealth and the State Agencies.  For the Commonwealth of Virginia Program, this approach assured contract compliance, a quality assurance process to make certain all performance standards are met, transparency in all transactions, and a vision for a continuous improvement process.

To address these challenges, MCI developed and managed an extensive network of service providers to provide:

Claim Management Services

  • Bill Review and Payment
  • Telephonic Nurse Case Management
  • Preferred Provider Organization (PPO) Network
  • Independent Medical Exam Services
  • Medical Vocational Services
  • Loss Control Services
  • Surveillance
  • Pharmacy Network
  • Durable Medical Equipment
  • Job Club
  • Field Investigations
  • Diagnostic Services
  • Payroll and Classification Audits


The Commonwealth of Virginia Workers’ Compensation program is currently operating in its fourth contract with MC Innovations, which was effective July 1, 2013. The program has proven successful in a number of measures:

  •  Lost Time claims have reduced from over 2,000 claims annually in Fiscal Year 97 to less than 1,100 in FY09.
  • Over $200,000,000 in savings in twelve years as measured by the Commonwealth’s Actuary, when compared to expected costs when operating as a state run program.
  • An overall Customer Satisfaction Rating of 91.18 % of Agency Representative respondents rated the program as 6 or higher on a 10 point scale.
  • National Recognition by the Council of State Governments for Innovation for the development of the State’s Return to Work initiative to establish a Work As Therapy model to assist injured workers’ returning to employment.
  • An overall Return to Work rate of 98.8% ending Fiscal Year 09.

For more information on the Commonwealth of Virginia Workers’ Compensation Services program, visit

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