What Medicare’s reimbursement changes mean for work comp

It isn’t possible to exaggerate the implications of the changes to Medicare’s provider fee schedule.

When Medicare shifts its weight, the foundations of workers comp move – a lot.  Here’s why.

First, around a third of provider reimbursement is governmental – and for some providers well over half of their payments come via Medicare, Medicaid, and other governmental programs which base reimbursement on CMS.

Second, the vast majority of work comp fee schedules are based on CMS therefore the changes  affect not only Medicare and Medicaid, but also many state workers compensation fee schedules. The decreases in reimbursement for imaging have been felt in Worker’s Comp. particularly in California and Florida. Also the increased reimbursement for physical therapy has also worked its way into the Worker’s Comp system.

The new fee schedule is known as MACRA.  Replacing the previous SGR system, MACRA will increase reimbursement 0.5% per year until 2019. At that point reimbursement will be flat until 2026.

While there are many other issues affected by this change, including increased reimbursement for quality and the use of electronic health records, the fee schedule changes themselves will have the most impact on Worker’s Compensation.

Expect continued increases in reimbursement for cognitive services; office visits, physical therapy and the like. I would also expect to see decreases in reimbursement for surgery and possibly ambulatory surgical centers which fare outside of MACRA.

What does this mean for you?

The schedule changes have already been felt in some states’ worker’s compensation systems. If Congress decides to take additional action which is possible but not probable this will also affect Worker’s Comp.