Update on Affordable Care Act’s Impact on Workers’ Comp

Recently, members of the workers’ compensation industry met in Orlando, Florida at the 2015 Workers’ Compensation Education Conference.

At the conference, David North, President and CEO of Sedgwick, and Richard Victor, Executive Director of the Workers’ Compensation Research Institute (WCRI), spoke about the impact the ACA is having on workers’ compensation, and how it will impact it in the future.

As reported last week in Safety National’s article, four of the top five group health care providers have been involved in mergers and acquisitions this year, and anything that has had such a significant impact on healthcare, will also impact workers’ comp.

The speakers outlined five phases that workers’ compensation will go through to evolve and adapt to the ACA.

These are the five phases:

  1. Awareness – developing an understanding of the ACA and its potential impact
  2. Research – investigating the potential impact (where the industry is now)
  3. Strategy – developing strategies to address ACA impact
  4. Execution – implementing the strategies
  5. Analysis – reviewing the strategies implemented and make adjustments

As previously written about in other posts, one of the biggest concerns for the workers’ comp industry is that the ACA will lead to cost shifting. And a big driver of cost shifting, according to North and Victor, is Accountable Care Organizations (ACOs).

How cost shifting to workers’ comp will occur is that physicians will have a financial incentive to push treatment to workers’ comp because the ACO will be paid a flat rate per employee, and therefore, the physician will not receive any additional compensation for treating the patient under group health.

The WCRI researched this and found that in states with significant penetration of capitated ACOs, there has been a 30% increase in workers’ comp soft tissue injuries due to being pushed out of group health.

This will also be a problem, the WCRI discovered, in states that easily allow for repetitive trauma claims that are not traceable to a specific date.

Mr. North and Dr. Victor stated that there will also be positive impacts as well. Because of the emphasis on wellness and incentives for employers to implement wellness programs will lead to a healthier workforce, this too will benefit workers’ comp.

Finally, the ACO models, with providers being incentivized based on outcomes and quality of care, will also be something work comp would benefit from, the article stated.

The speakers addressed two questions regarding the impact of the ACA; Is the ACA leading to higher healthcare costs? And what impact do you believe the Cadillac tax will have on workers’ comp? Will we see additional cost shifting?

The answer to the first question was “…yes. ACA was intended to increase coverage, not lower costs”; and the answer to the second question was “It depends. If employers respond to the Cadillac tax by increasing co-payments and deductibles to avoid the tax, then we will likely see more cost shifting to workers’ comp.”

What does this mean for workers’ comp?

It is undeniably clear that workers’ comp is going to get more expensive as the ACA leads to higher healthcare costs, but what is not clear is what the industry is prepared to do about it, what alternatives are they willing to try and explore, and what is holding them back from doing so?

In my post, “Change for Change’s Sake: What Real Change in Workers’ Comp Looks Like”, which referenced an earlier article from Safety National, I outlined what real change would look like, what the industry needs to do, and what is holding it back.

The sad fact is that unless you have a title, attend multiple conferences, and make lots of money keeping the status quo the status quo, no one listens to you. And when someone does respond to your idea, they twist your idea into some kind of joke by inferring that you want to send injured workers to underdeveloped countries not ready for medical travel, or that you want to send them to countries that are ready for medical travelers, but they would not know about that because they have no knowledge about what is happening there.

In short, they are ignorant and uniformed about the quality of medical care available in those medical travel destinations that have been recognized as leading the way.

Instead, they pass their ignorance onto clients and others in the industry, without actually knowing the reality. Why do they do this? Because in some way, they or their friends, benefit from keeping others ignorant of alternatives, and so become hypocrites when they talk about changing the system, but all they are really doing is more of the same.

HEALTH CARE IS GLOBALIZING.

Both Mr. North and Dr. Victor said that what happens in healthcare affects workers’ comp. Or are they just lying?

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

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