[see update below]
Now that the Supreme Court has handed down the final word on the PPACA, we can stop speculating and start thinking thru how it will effect workers comp.
Overall, this is good news. That may not sit well with those ideologically opposed to reform, but here’s why.
The most important single impact is this – When injured workers have coverage, there is no need for WC to pay for non-occ conditions for injured claimants (whether the WC payer follows thru on this is a separate issue).
This is also the most significant short term impact, especially in states such as Texas and Florida where almost one in four working age people doesn’t have health insurance. Think of it this way – a claimant needs surgery for a rotator cuff tear, has diabetes and hypertension. If they don’t have coverage, the work comp payer will pay to treat the diabetes and hypertension – 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 over to the health insurer.
And, the adjuster, case manager and UR function won’t have to engage in the back-and-forth with the provider over treatment, delaying treatment and extending disability duration.
There are a plethora of other ways PPACA will impact work comp – here’s a summary
1. There will be somewhere around 24 – 28 million more Americans with health insurance; thus there will be a lotless need for hospitals and other providers to cost shift to work comp to make up for revenues lost due to treating the uninsured. Sure, Medicaid reimbursemt is lousy and Medicare only a bit better but something’s a lot better than nothing.
2. Possibly higher claims frequency, although this is based on assumptions and interpretations. The data indicate those workers with health insurance are more likely to file comp claims than those without, but that appears to be a statistical relationship and not a causal one. Employers who provide insurance have better employee relationships, which appears to make employees less afraid to file WC claims.
3. For the big managed care companies, continuation of a much stronger and tighter focus on managing individual and group health, Medicaid and Medicare will mean less interest in, and resources dedicated to comp. Make no mistake, this is an event for which the big and small health plans were woefully unprepared. Many have been scrambling to adapt, investing in technology, getting bigger via acquisition, and strengthening relationships with providers.
Coventry and Anthem are the large players most invested in comp; they appear to have different strategies and approaches which we’ll explore in a future post.
4. Healthier claimants – those with insurance are healthier than those without, and healthier claimants heal faster and don’t need as much treatment.
5. More science and less art in the practice of medicine as comparative effectiveness research gains traction – good news indeed for comp payers saddled with back surgeries 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.
UPDATE – A colleague reminded me (after I posted this today) of the access issue – and he is correct. There will (very) likely be an access problem over the near term as primary care providers are inundated with new patients, and over the medium term for specilaists as folks who’ve long avoided care because they could not afford it now get those problems resolved – knee replacements, etc. My colleague’s reminder is well worth considering, and payers would be well-advised to develop strategies to strengthen relationships with primary care – and specialist providers. WC primary care is best delivered by occ med docs, 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 – on balance, good news indeed for workers’ comp.
For those who are interested, I have a rather detailed presentation on this issue; send an email to infoAThealthstrategyassocDOTcom and we’ll get it out to you next week.
Jun
29
Great post. I know it is on our minds about the future with everything and I appreciate the work into the article. Thank you.
An increased demand for occupational med physicians is already happening, due to two fundamentals:
(1) Occ Med physicians get better outcomes at lower cost than the PMD (nothing new, but the focus on value is making employers and insurers more aware,) and
(2) The decreased supply of primary MDs; both factors have already been at play, and now…
(3) increasing coverage for primary care will put further demands on the primary docs, who really don’t like to do WC and now will have less time, and so they will stop accepting WC insurance. This has already happened in Rochester NY on a grand scale.
So, increasing the supply of clinically focused occupational medicine docs will benefit industry and carriers alike.
G Anstadt MD FACOEM FACPM
An increased demand for occupational med physicians is already happening, due to two fundamentals:
(1) Occ Med physicians get better outcomes at lower cost than the PMD (nothing new, but the focus on value is making employers and insurers more aware,) and
(2) The decreased supply of primary MDs; both factors have already been at play, and now…
(3) increasing coverage for primary care will put further demands on the primary docs, who really don’t like to do WC and now will have less time, and so they will stop accepting WC insurance. This has already happened in Rochester NY on a grand scale.
So, increasing the supply of clinically focused occupational medicine docs will benefit industry and carriers alike.
G Anstadt MD FACOEM FACPM
Agree on the posting – great job. Can you clarify the email address to get your presentation? Thanks.
The point in the update regarding potential access to care issues is well taken, but I think it is a mistake to limit that concern to the near and medium term. We have already been looking at looming access to care issues due to our aging demographic, so this will have the tendency to front load a problem that will be occurring anyway in the long term. Attempting to induce an increased number of people to enter the medical field promises to be problematic given that there will almost certainly continue to be downward pressure on price in order to try to contain costs.
What Obamacare will not provide will be a wage replacement system when an injury occurs which will have a continued impact on frequency
The access issue is definitely something to be keeping an eye on. Massachusetts ran into this issue after their coverage expansion, and I’ve heard that the same thing is happening in DC with mental health providers. (DC switched a lot of poor adults from a local healthcare program to Medicaid under the federal offer to expand Medicaid before 2014, and many of them got better mental-health coverage as a result.)
The ACA — and also the stimulus package — put a lot of money into expanding community health centers, which exist specifically to provide primary care to underserved populations, and which have been found to provide high-quality care while saving money. Whether the new supply is equal to the new demand remains to be seen, but it’s a start.
WRT comment 1, last sentence:
Hospitals lose money on Medicaid and most break even on Medicare. I’m not sure how having more patients that lose you money or, at best, just cover your cost, is good news.
WRT comment 1, last sentence:
Hospitals lose money on Medicaid and most break even on Medicare. I’m not sure how having more patients that lose you money or, at best, just cover your cost, is good news.
Joe,
Currently, at least in California, the presence or absence of existing health coverage has no bearing on employers’ constitutional mandate to provide all the treatment necessary to cure or relieve. Not today, or when the ACA is fully implemented. How do you figure that it does? Treatment cannot be appportioned. I agree that pre-existing coverage of a condition may mitigate the severity of its effect post-injury, but there is nothing in the ACA that changes the current obligation to treat. Any such change would require a state-by-state change in its statutes.
Steve – I did not say ACA changes anything about employer requirements related to work comp.
However, today many injured workers have NO health insurance, so WC often pays for treatment of non-injury-related conditions to speed RTW and healing. Going forward, this will be less of a burden.
Treatment can be assigned to the appropriate payer, if there is a payer to assign it to. This isn’t “apportionment” in the technical WC sense of the term rather subrogation.
Path to Federalization: A National Workers Compensation System–US Supreme Court Validates
United States Supreme Court has taken a giant leap forward to facilitate the Federalization of the entire nation’s workers’ compensation system. By it’s recent decision, upholding the mandate for insurance care under the Affordable Health Care for America Act (ACA) 2009, it has set the precedent to federalize the nation’s fragmented and chaotic workers’ compensation medical delivery system.
Complete Article With Links:http://tinyurl.com/8x7f7fa
Jon – Couldn’t disagree more.
Where you see everything done on the Federal level as a series of integrated, orchestrated steps leading down a carefully laid path towards federalization of work comp, most see nothing but multiple unrelated events.
I daresay it isn’t because the rest of us are myopic or asleep. I’d suggest there is no one at HHS, the White House, or in Congress who wants to “federalize” WC; no credible evidence that anyone in a position of authority is interested in such a move; and huge political liability for anyone in the Administration even mentioning such a move along with zero political benefit. Moreover, there is no political constituency for such a move.
Thus we have a huge political cost, no political benefit, and no interest from anyone in any position of power or authority in federalizing work comp.
Other than that…