Some hospitals in Connecticut are throwing what amounts to a temper tantrum. They are outraged that workers comp payers are actually paying them according to state law.
Strange, but true.
Sources indicate that Yale-New Haven Hospital and their affiliates have informed several payers that they will no longer provide elective procedures for the offending payers’ insureds. There are also reports of an effort on the part of Y-NH to get other hospitals to join in the fun.
The reason for their displeasure is several payers have ditched their hospital networks and begun paying hospitals according to the Workers Compensation Act.
The Act reads, in part, “The liability of the employer for hospital service shall be the amount it actually costs the hospital to render the service”.
But many payers in Connecticut (including the State itself) are not paying costs, but paying billed charges, or something close to it, and they’ve been doing it for years. Workers comp has been a huge moneymaker for Connecticut hospitals; on average commercial payers reimburse between 41.65% and 45.14% of charges.* Contrast that with comp payers’ reimbursing hospitals at billed charges or a few points off (in a network arrangement).
*(The variation between 41.65% and 45.14% depends on which measure you use; the former is based on recent data, the latter from data reported to the State). I’d also note that commercial payers are paying 122% of costs (again from CT State statistics).
Sources also indicate the good folks from Yale (several of whom live in my town) understand, and even agree with, the methodology the payers are using to reimburse the hospital. But they don’t want to accept that reimbursement, as they would rather go back to the good old days when they were making a fortune off all workers comp payers (when hospitals were being paid three to four times more than they should have been). (Most payers are still paying billed charges or close to it)
I’ll leave aside the obvious fiduciary responsibility issue here, except to note that as a CT taxpayer, I’m not too happy that the State has been paying way more than it should to hospitals for State employees’ workers’ comp bills. Instead, I’ll note that this amounts to a hidden tax on employers – all of whom are forced by regulation ot buy workers comp insurance. Those employers (and their insurers) that are paying billed charges, or a discount off billed charges, are helping those hospitals to pay for care delivered to those without insurance, make up the underpayments from Medicare and the state’s HUSKY program (kid health insurance), buy big new machines and build new facilities.
That’s nice, and its also grossly unfair to employers.
Workers comp insurance companies need to “Man Up” and not give into what is tantamount to blackmail on the part of providers. Policyholders need to tell their insurers not to spend one dime more than legally required.
The US health care system is incredibly screwed up, unfair, and dysfunctional, and hospitals are a key part of that system. But it’s not up to Connecticut employers and taxpayers to solve hospitals’ financial problems by paying a hidden tax.
Sep
18
