Impact of Healthcare Reform on Workers Compensation

I usually write to patients on my blog and to employers through my LinkedIn blog. But since this topic affects both, and as you know I advocate for a partnership between the two, I thought I’d post this on both blogs.

On the heels of the Affordable Care Act, the workers’ compensation insurance industry braced for both claims and costs to rise. Long seen as the insurance of last resort, the industry expected people previously uninsured would seek the no co-pays or deductibles of workers’ compensation, or that those who suddenly gained access to healthcare would uncover long-standing conditions they could blame on their job. Both situations lend themselves to sufferers of repetitive strain injuries or RSI, the number one occupational illness in the country. They were legitimate causes for concern.

What You Should Know: Workers

Analyst Michael Stack of Amaxx Risk Solutions, Inc. counseled claims managers to take a more proactive role to uncover fraud, waste and abuse within the system. He specifically suggested increased utilization reviews. If you’ve suspected you may have an RSI, but have been unwilling or unable to seek treatment, there are two things you should consider before filing a claim. The first is causation: if you are on the computer all day at work, but then go home and play video poker, manage the school's on-line chat forum or spend your evenings on your eReader, these things too can cause an RSI. Along with playing sports, a musical instrument or jogging. Second, if you’ve been putting off going to the doctor to get that elbow examined because you haven’t had health insurance, your injury may legitimately be due to work but you will likely have a harder time proving your claim. You should also be aware that to use your regular health coverage for a work related injury is insurance fraud.

What You Should Know: Employers

There is no doubt that the ACA will affect healthcare across the board, workers’ compensation included. Higher reimbursement rates for doctors and no deductibles or copayments for employees are both very real considerations. Also, the same diagnosis has traditionally cost more under workers’ compensation than under group health insurance. This affects employers and employees alike. There is an additional consideration for employers regarding the premium reimbursement mechanism under ACA. If an employer elects to pass those savings on to their employees, they would be charged as payroll under workers’ compensation, those increasing those rates.

Still, as some thought leaders in the industry pointed out, there are some real benefits to employers as well. Provided they maximize the two systems. An overall healthier society, better standards of care and more successful outcomes are sited. When it comes to RSIs, these will all have a tremendous impact in incidents of injury. A less sedentary workforce, better posture and better awareness will all reduce RSIs. But more importantly, better standards of care and more successful treatment will impact return-to-work outcomes, the real cost driver of RSIs.

There is another element to the ACA that benefits employers tremendously, and that's the ability to use first aid treatment in the care of RSIs. I discuss this at length in my book and the savings for both workers and employers are significant.

As a way of testing the impact of the ACA on workers’ compensation, the Rand Corporation did a study using the Massachusetts system and found that emergency room and inpatient hospitalizations actually fell by 5 to 10 percent, with costs remaining about the same. I would say that, with proper education and utilization, on the part of employers and employees, the ACA has the potential to actually dramatically reduce workers’ compensation costs.