June 14, 2010

Healthcare Reform and Workers Compensation

In the the following guest post, Gary Anderberg, Phd, the Practice Leader For Outcomes and Analytics at Broadspire offers his thoughts on the potential impact of healthcare reform on workers comp in the coming years.

At the moment, health care reform appears to have a number of positive and negative potential impacts on workers compensation over the next few years. The net results cannot be estimated this early in the game. We can, however, identify a few elements and their possible consequences:

  • Insuring the now uninsured: Positive -- employees who have health insurance tend to file fewer workers compensation claims. They have less incentive to cost shift. Another result will be that chronic medical conditions will be, over time, better controlled and less likely to increase the severity of work related claims.
  • Availability of care: Negative -- with a large number of people having new health coverage, doctors and facilities may be swamped in some areas. The problem will lead to (a) delays in appointments for workers compensation-related medical treatments and (b) less willingness by providers to participate in occupational medical networks and offer discounts off fee schedules.
  • Removing the pre-existing exclusion: Unknown -- in 2014 the pre-existing exclusion will disappear in group health. This cuts several ways at once. There will be less incentive for employees to claim long standing "wear and tear" conditions as work related - a positive change. There may also be much greater demand on employers for workplace and job accommodations leading to new exposures and safety issues.
  • Medicare reform: Negative -- the passage of HR 3590 was predicated on massive adjustments in Medicare reimbursement levels, which are marginal for medical providers now. This will pressure providers, especially hospitals and some specialists, to cost shift where possible and workers compensation is a soft target in most states. We could see significant increases in medical costs per claim as the Medicare changes begin to bite in a couple of years. (The recession-driven cutbacks in state Medicaid reimbursements will only amplify this effect in the near term.)
  • Libby care: Unknown -- the "Libby care" clause of HR 3590 (sec 1881A) is not intended to lead to the federalization of industrial diseases absent some very specific catastrophic circumstances comparable to those of the WR Grace disaster in Libby, MT. But we all know that ERISA was intended to address a very narrow set of union pension abuses when it was passed, but the Department of Labor, abetted by the Florida Administrators decision of the Supreme Court in 1977, expanded it greatly. The Libby care provision will bear watching.
Workers compensation was not at the table when Congress hammered out its health care reform solutions. Other than a few glancing mentions, such as the Libby care clause noted above, occupational medicine was overlooked and, by default, left to the states. This is probably a good thing, on balance. Yet, as health care reform changes begin to penetrate the enormous US health care enterprise, they will impact workers compensation in many overt and subtle ways over the next several years. Carriers, third party administrators, and managed care vendors will need to be alert to capture possible advantages and avoid potential nasty surprises.


While I am against the healthcare "reform" legislation, in terms of WC patients I don't see where availability of care will be impacted. Since every injured worker is presumed to be faking it or to have a pre-existing condition which led to the injury, I am less than impressed by the care received and the lack of payment for this care.

My husband was injured 3 1/2 years ago; he needed cervical surgery and lumbar surgery as the injury led to complete foot drop. As a nurse and as someone with knowledge of how slowly the system crawls, I kept my husband out of the comp. system in terms of hiring an attorney long enough to have the neck surgery approved. He was advised to have the lumbar surgery as soon as he was recovered enough from the neck surgery, as that was his best chance to regain use of his ankle. by the time he recovered from the neck surgery the comp. carrier had gone on the warpath, we hired a lawyer, and TWO years later the comp carrier would not approve the surgery sighting "pre-existing spinal arthritis". By that time the surgeon informed us that it was too late for the surgery and his foot drop and leg atrophy were permanent. He has needed a second AFO, and after an entire year the comp carrier still hasn't paid for it and our attorney has told us it will have to wait until we go through the hearing (BTW, the impartial did not answer the key questions needed answered) so we are in the process of depositions and re-applying for another hearing.

What good is timely access if the carrier stonewalls constantly to try to avoid ultimate liability?

Wake up and smell the coffee.

As to point #1, I agree that the conventional wisdom is that workers without health coverage file more comp claims. However, that may not be correct. A 2005 RAND study found that uninsured workers are less likely to file claims.

As to the point on pre-existing conditions and WC claim filing generally: for more complex conditions, WC and health coverage are not close substitutes. This is because WC offers indemnity benefits, and the medical care is first-dollar coverage. We sometimes tend to forget these differences when we approach the issues from a health-care perspective.

Finally, moving from study to personal anecdote here, my experience has been that when medical treatment is given for any injury, health insurers actively check before paying to see if there is other coverage (WC or auto accident). Health insurers will still have an incentive to check on that in the new environment.


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This page contains a single entry by Julie Ferguson published on June 14, 2010 8:55 AM.

A killer edition of Health Wonk Review & other noteworthy news was the previous entry in this blog.

Tewksbury (Finally) Opts In is the next entry in this blog.

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