The Affordable Care Act and Workers’ Comp

In a recent scholarly article, David A. North outlines how the Affordable Care Act has changed workers’ compensation, and what we might expect in the future.

In a recent scholarly article, David A. North outlines how the Affordable Care Act has changed workers’ compensation, and what we might expect in the future.

• The Affordable Care Act (ACA) requires employers to “pay or play,” by providing healthcare coverage for employees who work 30 or more hours a week.
• It encourages wider adoption of accountable care organizations (ACOs), which promote wiser use of medical care dollars. ACOs reward providers for keeping patients healthy, rather than for delivering more (often unnecessary) medical services.
• It eliminates pre-existing medical condition exclusions, expanding coverage for those already insured and allowing many previously uncovered Americans to obtain health insurance.

Pros

All these initiatives should help reduce cost-shifting, or the temptation of workers to claim workers’ compensation benefits for uncovered non-work injuries or illnesses.

• In Massachusetts, which enacted healthcare reform in 2006, the number of uninsured people accessing emergency rooms dropped 40 percent. Workers’ compensation emergency room bill volume also dropped seven percent. The author suggests that Massachusetts’ healthcare reform may reduce workers’ compensation “billing volume and costs.” However, findings in Massachusetts might not apply nationwide.
• It promotes expansion of wellness programs. Wellness and safety programs can positively affect workers’ compensation costs.
• It encourages people to enter the healthcare field by funding grants and scholarships for primary healthcare physicians, nurses, dentists and mental and behavioral health professionals.
• It encourages healthcare technology advancements. The ACA itself, and projected provider shortages, are encouraging technologies that save physicians time. Examples include electronic medical records, telehealth, robotic devices, Internet-connected sensors, 3-D printing and more.
• It encourages the use of paraprofessionals, such as nurse practitioners and physician’s assistants. Using lower-cost providers for routine care can free physicians’ time and help control medical costs.

Cons:

• Medical provider shortages could affect the timeliness of treatment of workers’ compensation injuries. Employers have an incentive to get injured workers back to productive work as soon as possible, to reduce lost time costs. The Congressional Budget Office estimates the ACA will give 26 million newly insured individuals greater access to the healthcare system by 2017. That could create provider shortages, increasing waiting times as much as 50 percent and increasing times between medical appointments. This could increase the length of disabilities.

  The author recommends that employers begin forging relationships with healthcare facilities and providers near their locations and develop agreements to provide quality care.

• Medical providers often charge more for treating a workers’ compensation case than they would for a similar non-occupational case—often charging 40 percent more for common outpatient surgeries. They attribute that to a “hassle-factor” for the additional paperwork or payment delays involved. Naturally, the discrepancy was greatest in states that either had no fee schedule for workers’ compensation treatments, or that paid on a percentage of fees basis. This difference in fees could give providers incentive to treat non-occupational cases as occupational cases and increase employers’ costs.

What Employers Can Do

The full effects of the Affordable Care Act and growing technology will take years to play out. To better understand the effects of the ACA on your workers’ compensation claims, the author suggests the following action steps:

• Monitor claims duration. How long are claims staying open versus historical levels?
• Monitor medical costs. Do electronic medical records and advanced technologies affect costs for the better or worse?
• Monitor lost time claims/lost time days. Are indemnity payments increasing because employees are off work longer due to reduced access to care?
• Monitor reopened claims. Are fewer claims reopened due to effectiveness of care?
• Monitor litigation rates. Are litigation rates increasing or decreasing? Improved communication and quality of care can reduce rates.
• Survey claimants and your medical providers. Their experiences can tell you what is working and what is not.