Insurance folks decry the difficulty inherent in operating in multiple states, each with their own rules, requirements, standards, and demands. It would be all so much easier if there was one national standard, and some would argue this would make for a “fairer” system.
However.
States have the Constitutional authority to oversee and regulate most insurance functions. While federal legislation and resulting regulations can – and do – supercede State laws (think voting rights, interstate speed limits, education standards, firearm background checks), to date states have been left pretty much alone when it comes to workers’ comp.
Is that going to change?
I think not, but reasonable people can make a good case for some national standardization – which would almost certainly require Congressional action. Of course, given Congress can’t even bother to authorize spending to deal with the opioid disaster or take action on Zika, something as tiny and non-problematic as workers’ comp is not likely to get any Congressperson’s attention.
Here’s where it gets ideologically sticky.
Folks who normally favor small, limited Federal government find themselves advocating for national standards to streamline work comp for insurers and employers. The hodgepodge of state regs creates a whole host of inappropriate incentives;
- injured employees get higher wage replacement payments depending on the state “where they were injured”
- while employers get lower rates in states with low wage replacement levels and
- doctors get paid more to treat workers’ comp patients in Connecticut than in Massachusetts – a LOT more
Those just scratch the surface; talking with Bob Wilson yesterday about this, he noted many payers are most frustrated by EDI rules and regs. Set up in an effort to normalize state requirements around a set of national standards, Bob noted many states seem to have a need to tweak things just a bit here and there. Once that begins, there’s no such thing as “standard”.
What does this mean for you?
Ideology sometimes conflicts with reality.
I don’t think work comp gets “federalized” in the near future either, but just for fun, I offer a hypothetical: Some Congressional staffer in DC picks up the latest issue of Health Affairs and sees that CMS pays more for opioids in the UNDER 65 age cohort (a little over $1 billion per year) than the OVER 65 age cohort (about $800 million per year) even though the UNDER 65 age cohort is a fraction of the size of the OVER 65 age cohort. This staffer asks herself: “What group is driving that?” And she realizes it’s the Social Security Disability population. Then she asks the next logical question, one that should scare everyone in work comp: “How did those people get there? Where did they come from?” That’s the beginning of the end.
Michael, can you share a link to that Health Affairs article you mention? Regarding “how did these people get there”, do we really know how many got there through workers’ comp versus non-comp health plans? Sure, WC has its problems, but the issue of workers ending up on SSDI is larger than just WC. There are many other avenues through which workers can take the wrong turn and “fall through the cracks”–a topic we’ll cover in depth in our 9/13 SAW/RTW forum: https://www.mathematica-mpr.com/events/helping-workers-keep-their-jobs
Here’s the link:
http://m.content.healthaffairs.org/content/35/5/824.abstract?sid=626b2208-441f-4b45-8fdd-d8148dddb109
And I have no idea what the work comp to SSDI pipeline looks like. I was posing a rhetorical and intentionally provocative question. But it’s an area of public policy research that would be really interesting.
Maybe my suggestion is too simplistic, but here it is:
Why don’t the big national players get together and identify common sense efficiencies (such as EDI standards), then lobby each state for those changes. In the group health environment, groups like WEDI (Workgroup for Electronic Data Interchange) have been very effective. ( http://www.wedi.org is the website).
Perhaps the large players could get together proposing consistent legislative language in each state to their respective elected officials for the various functions and responsibilities in workers comp.
Similar to how states are gradually adopting Compact Acts for licensing medical professionals and not requiring a separate new license in every state, every state having consistent workers comp procedures, time frames, medical management (networks, medical bills, case management, UR, Voc, etc.), forms and filings, data requirements and reporting, licensing, etc. could bring welcomed consistency, enhancing accuracy and quality in our industry.