PPACA expected to lower workers’ comp claims

PPACA expected to lower workers’ comp claims

workers comp falling employee-resize-380x300BY BRUCE JACOBS

Add “Obamacare” to the phrase “unintended consequences” and a lot of people sprint straight to the storm cellar.

But the unintended consequences (none of which are direct) of the Patient Protection and Affordable Care Act on the workers’ compensation system may present employers, workers and carriers with perhaps more silver lining than cloud.

According to figures from the government’s Centers for Medicare and Medicaid Services, the health care bill in 2012 totaled $2.8 trillion, with about 2 percent of that figure, say experts, supporting medical costs associated with workers’ compensation.

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The exact impact of Obamacare on that 2 percent probably won’t really be understood for a little while, but there’s no doubt some kind of impact will be felt, said Professor Jonathan Gruber, an MIT economist who lent his expertise in crafting both Mitt Romney’s 2006 Massachusetts health care law and the 2010 PPACA.

First, the one, big cloud:

Shortage of doctors

Some 9.5 million individuals, some previously uninsured, signed up for healthcare through the PPACA exchanges as of March. By 2017, the Congressional Budget Office estimates that the law will have reduced the about 47 million uninsured Americans by half, bringing some 23.5 million people into the healthcare system.

At roughly the same time, the Association of American Medical Colleges estimates the United States will be short some 45,000 primary-care doctors.

While business will no doubt be brisk for those physicians who remain in practice, Gruber worries that patients seeking medical attention for workplace injuries – particularly in already underserved parts of the country – will be unable to access convenient, high-quality, reasonably-priced care. This isn’t a problem that will afflict workers only, obviously. Everyone will feel it.

Now, the silver lining(s):

Healthier employees/lower costs


Derek A. Jones, an actuary and insurance specialist in the New York office of Milliman, sums up the expectations of many, saying he anticipates expanded medical coverage to foster a healthier U.S. population, which should lead to savings in the workers’ compensation system by reducing the number of claims.

Moreover, healthier workers who do get injured will recover quicker, return to work faster, and discontinue claims sooner.

Jones, again, isn’t alone in making this point; it’s one you’ll hear repeatedly in any conversation with a workers’ comp expert.

Cost shifting/fraud reduction 

For at least some employees who don’t carry health insurance, the workers’ compensation system is often the only way to address temporary and even chronic medical problems, many of which are not work-related. One such abuse, dubbed “Monday injuries,” involves waiting until the start of the week to attribute a non-job-related injury to the workplace.

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Workers’ compensation deceits like “Monday injuries” and just plain false claims amount to some $7.2 billion annually, according to the National Insurance Crime Bureau, a number that includes cheating by employees, employers and providers alike.

However, as more workers are able to purchase and carry affordable medical insurance through the exchanges, they will use this new coverage – and not the workers’ comp system – to address their medical needs.

“Monday injuries” and other forms of worker-inspired fraud should decrease significantly, predict the authors of an article appearing in the May 2014 issue of the American Academy of Orthopedic Surgeons.

Administrative savings

These same authors anticipate that new PPACA regulations regarding reporting standards and coordination of benefits may help companies reign in costs by reducing administrative and overhead spending.

Best practices research

Through 2019, the PPACA has authorized some $650 million annually to support the Patient-Centered Outcomes Research Institute, whose mission is simple: fund relevant research to create a body of “evidence-based” information so that people confronting difficult healthcare choices can make informed decisions “that reflect their desired health outcomes.”

Joe Paduda, principal of Health Strategy Associates, a Madison, Conn., consulting firm specializing in managed care for workers’ compensation and group health, believes strongly that comparative effectiveness research can bring consistency and reason to the “wide variation in quality of care, over-use of surgery, inability to manage chronic pain, impact of obesity, and the often inconsistent medical care delivered to far too many injured workers.”

In short, PCORI’s work also should help cut workers’ comp claims.