By JOSEPH PADUDA, principal at Health Strategy Associates LLC
Now that the Supreme Court has handed down the final word on the health care reform, we can stop speculating and start thinking about how it will affect workers' comp.
The most important single impact is this: when injured workers have coverage, there is no need for workers' compensation to pay for non-occupational conditions for injured claimants (whether the workers' comp payer follows through on this is a separate issue).
This is also the most significant short-term impact, especially in states like Texas and Florida where about one in four working age people don't have health insurance. Think of this example: a claimant needs surgery for a rotator cuff tear, has diabetes and hypertension. If they don't have coverage, the workers' comp payer will pay to treat the diabetes and hypertension because those conditions have to be addressed if the claimant is going to recover and get back to work. Now the comp carrier can send those bills to the health insurer.
And, the adjuster, case manager and utilization review function won't have to engage in the back-and-forth with the provider over treatment, delaying treatment and extending disability duration.
What may well be the most significant long-term impact of reform is the likelihood that workers will be healthier, their underlying conditions and comorbidities will be addressed by their health plans, and therefore comp payers won't have to pay for treatment of those conditions in order to resolve the work injury. Think diabetes and surgery.
In addition, several studies (here and here) indicate that those with health insurance tend to be healthier than those without. Healthier people heal faster, more good news for workers' comp.
There are plethoras of other ways the Patient Protection and Affordable Care Act will impact workers' comp. Here's a summary:
First, it may not be why you think; workers' comp costs won't come down because people with health insurance are less likely to file workers' comp claims (the theory being those without insurance are more likely to try to get comp to cover a non-occupational injury). In fact, studies indicate those with insurance are less likely to file a comp claim, although the correlation appears to be statistical and not causal.
For some diagnoses, identifying the cause of the injury is becoming increasingly problematic. It is often difficult for a physician to determine the 'cause' of back pain or dysfunction; it may, or may not be wholly or partially related to a work injury and different physicians often reach different conclusions about the cause of injury. While reform won't clear up those medical mysteries overnight, it will reduce the need for comp payers to pay for what are clearly non-work-related conditions.
Workers' comp is the most profitable payer for many facilities; margins are much higher for comp than for Medicaid (which pays below cost) and Medicare (which pays right around cost). When more people have health insurance, there will be less need to shift cost to workers comp to cover the expense of providing care to the uninsured. Sure, PPACA will not cover everyone, but it will cover about two-thirds of those currently without health insurance. And most of those newly-covered folks will be the employed (and dependents thereof).
When the law is implemented fully, there will be somewhere around 24 million to 28 million more Americans with health insurance; thus there will be a lot less need for hospitals and other providers to cost shift to workers' comp to make up for revenues lost due to treating the uninsured. Sure, Medicaid reimbursement is lousy and Medicare only a bit better but something's a lot better than nothing.
The provisions in PPACA and the stimulus bill provided funds for much-needed research into comparative effectiveness research. This research will improve the quality of care delivered as well as provide a more solid basis on which to assess medical treatment; More science and less art in the practice of medicine is good news indeed for comp payers saddled with questionable back surgeries, compound medications and H-Wave devices.
While some states may decide to not accept funding for the expansion of Medicaid, on balance this won't be a negative, any additional coverage is a net positive for comp.
That's not to say the news is all good for workers' comp. Perhaps the biggest problem will be access to care. There will (very) likely be an access problem in the near term as primary-care providers are inundated with new patients, and over the medium term for specialists as folks who've long avoided care because they could not afford it now get those problems resolved -- knee replacements, etc. Payers would be well-advised to develop strategies to strengthen relationships with primary care and specialist providers. Workers' comp primary care is best delivered by occupational medicine doctors, so this may also encourage payers and employers to direct their claimants to docs better equipped to deal with those patients.
What does this mean for you?
Healthier claimants, less cost-shifting, more science and possibly slightly higher frequency somewhat offset by tighter access to providers; on balance, PPACA is good news for workers' comp.
July 24, 2012
Copyright 2012© LRP Publications