Friday’s here!

And you get to start the weekend early (we hope).

While you were focused on other stuff – like work – here’s what else was going on in our little world.

Fraud – two very different views.

This morning’s WorkCompWire arrived with the news that some small businesses are concerned that their employees may be contemplating workers comp fraud.  In a survey sponsored by EMPLOYERS Insurance, 13% of respondents were concerned “employees would commit workers’ compensation fraud by faking an injury or illness in order to collect benefits.”

(according to EMPLOYERS, 6% were very concerned, 7% somewhat concerned)

The other fraud-related topic comes from WorkCompCentral’s Sherri Okamoto. Ms Okamoto filed a story on the Labor Dept.’s just-published finding on employee misclassification.  In the announcement by DOL, the following statement appeared:

A worker who is economically dependent on an employer is suffered or permitted to work by the employer. Thus, applying the economic realities test in view of the expansive definition of “employ” under the Act, most workers are employees under the FLSA.

WCC’s piece noted several recent court cases, rulings, and other findings that have forced employers to pay back wages, re-classify workers as employees, and otherwise restricted businesses’ efforts to avoid identifying workers as contractors.

The implications for health and workers’ comp insurers are clear: more premiums and a larger market.

Note – DoL’s document is well worth the read as it is highly relevant to the evolving “sharing economy”.

Implementing health reform

Following up on my piece re “there is no Obamacare”, found this from Avalere Health;

the average provider networks for plans offered on the health insurance exchanges created by the Affordable Care Act (ACA) include 34 percent fewer providers than the average commercial plan offered outside the exchange.

No one should be surprised by this.  Health plans competing on exchanges MUST be price competitive; now that healthplans can’t just deny coverage, they have to compete on the basis of delivering care at the lowest possible cost (yeah, outcomes will be a factor at some point, but they really aren’t so far).  The cost of care is determined in large part by provider reimbursement and utilization of health care services, both of which are driven by the payer-provider contract.  Providers want more volume, lower administrative burdens, less uncertainty about and much speedier reimbursement – and do NOT want to share patients with every other Dr Tom, Dr Dick, and Dr Mary in their service area.

And that’s why we have narrow networks on exchanges – providers give lower prices in return for more patients and less hassle.

BTW, this is right where we were back in the heyday of group- and staff-model HMOs; they fell out of favor as members wanted more choice.  Now, those people who want choice are going to have to pay a lot more for it.

Expect to see much more “network narrowing” in the future.

Another state is going to expand Medicaid – Alaska.

Providers are getting stronger

This week’s announcement that Connecticut-based Yale-New Haven health system is acquiring another big hospital in the eastern part of the state is just one more indication that the provider world is consolidating and gaining negotiating leverage.  Both health care providers and the payer industry are consolidating, but to date it appears the providers are the ones gaining the upper hand in the battle for leverage.

See you next week