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By Ryan Benharris, Esq.
The Impact of the Affordable Care Act on National Workers’ Compensation was the leadoff session at the 2015 Workers Compensation Research Institute (WCRI) Annual Convention. “Resilience or Renovation,” was the overall theme of this year’s event, which took place from March 5-6 in Boston. The majority of the sessions discussed factors that have revolutionized workers’ compensation systems over the past several decades. As the Affordable Care Act (ACA) is commonly seen as the largest change in American health care in nearly 40 years it clearly has the potential of significantly affecting workers’ compensation in America. A WCRI study specially investigated whether the ACA has created a shifting of patient treatment from general health insurers to workers’ compensation insurers by creating added financial incentive for doctors to move to workers’ compensation for higher treatment reimbursement.
Dr. Richard A. Victor, WCRI’s President and Chief Executive Officer, presented the findings of WCRI’s study with respect to the ACA and its impact on workers’ compensation in the United States. Victor, a founding member of WCRI who has led the organization since its inception, indicated that the ACA has clearly created new demands on the workers’ compensation system, specifically on the insurers and with respect to an increase in how treating physicians are handling patients of industrial accidents. WCRI’s findings seem to fall in line with the notion that as a result of the ACA, more workers’ compensation claims are good for doctors who are otherwise stuck navigating capped insurance reimbursement programs.
When the ACA was signed into law in 2010, its purpose was to increase the overall quality and accessibility to health insurance for all Americans. As a result, Victor discussed that WCRI fields questions almost daily about whether it believes that governmental access to better quality care has changed how medical providers are treating injured workers. Victor and WCRI assert that its research strongly indicates that the ACA has created a shifting of treatment off of general health insurers and making that patient care the responsibility of workers’ compensation carriers.
Accountable Care Organizations and the Causal Connection
Central to the analysis of the impact on the ACA on workers’ compensation was the creation and expansion of Accountable Care Organizations. Accountable Care Organizations seek to tie provider reimbursements to quality metrics. Victor explained that physician participation in Accountable Care Organizations is vital to the continued success of the ACA. The ACA expanded the importance of Accountable Care Organizations which work to create an obligation on providers to keep patient care costs reasonable. The ACA encourages (and essentially mandates) Accountable Care Organizations to create financial responsibility with respect to the treatment of patients.
As in nearly all spats between injured workers and workers’ compensation carriers, the issue of causal relationship (or lack thereof) rears its ugly head in discussing the impact of the ACA. The creation of the ACA added more fuel to the always highly disputed issue regarding whether or not the patient’s condition is, in fact, work related. At the core of a majority of disputes in workers’ compensation cases, the employee and the insurer are at odds over whether or not the treatment sought is related to the industrial accident. Victor discussed that in most jurisdictions, if the patient seeks care for treatment that is work related, it will be covered by the workers’ compensation carrier. If the treatment is not work related it will be covered by the general health carrier. Victor indicated that reimbursement rates set under the ACA and specifically under Accountable Care Organizations tend to be significantly lower than reimbursement rates under workers’ compensation systems.
Victor continued to explain how providers affect workers’ compensation cases because it is the doctor who will typically determine whether the employee’s condition is causally related to an industrial accident, and stated that decisions about the work-relatedness of a condition rely heavily on assessment of the treating doctor. Victor explained that in most jurisdictions a financial incentive to have treatment covered by a workers’ compensation carrier could certainly influence whether the treating physician would determine if an injury was, in fact work related. As he later pointed out in his presentation, WCRI’s research tends to support the notion that doctors are more increasingly willing to determine that a patient’s condition is work related because there may be financial incentive to treat the patient under the workers’ compensation system rather than through capitated general health insurers that subscribe to Accountable Care Organizations.
According to Victor, if the patient seeks treatment pursuant to the ACA guidelines through an Accountable Care Organization, the reality is that if the treatment is not deemed work related, then the provider has already, essentially, been pre-paid for the care and there is no real financial incentive to continue treating. If the provider is able to deem that the treatment is work related, he can further bill the workers’ compensation insurer for treatment that has not already been prepaid.
Capitated Payment Plans
Victor explained that an explicit goal of the ACA was to increase the number of patients covered by capitated payment plans. Capitated payment plans set specific per-patient treatment amounts on patients for whom providers will be reimbursed whether or not they have to actually treat the patient. Victor noted that capitated plans will generally financially discourage physicians from long lasting treatment. As a result, WCRI looked at the kinds of claims in which capitation is more likely to force a shift in payment from workers’ compensation to general health policies. Victor pointed out that States with higher percentages of insured workers in capitated health care systems saw a significant shift in coverage to workers’ compensation claims for employees claiming soft tissue injuries, because of the necessity for longer, more costly treatment. As capitated health care plans force physicians to consider the cost of long term care to a patient because of specific caps, States having a high percentage of insured workers covered under capitated plans tend to see more case shifting than states that do not have a high percentage of employees covered under capitated plans.
Victor concluded his presentation by showing the rising number of workers whose health insurance deductibles are $2,000 or more. WCRI indicates that less than 10 percent of insured workers had deductibles of $2,000 or more in 2006. He compared that to 2013 when the percentage was between 15 percent and 30 percent. He said that rising deductibles are very likely responsible for patients shifting treatment to workers’ compensation carriers. According to Victor, workers that have to pay for their treatment out of pocket will be more likely to put it through workers’ compensation to avoid the personal costs.
WCRI’s study seemed to strongly suggest that the ACA will continue to trend toward the notion that recovery of more claims will be sought under workers’ compensation systems because the ACA is making the treatment of patients under general health coverage increasingly more cost prohibitive. Victor suggested that if the case shifting does continue, employer premiums will also naturally increase.
Skeptics of the study inquire whether the ACA has encouraged more providers to determine patients’ conditions are work related because of a financial incentive or, instead, whether we are simply seeing more workers’ compensation treatment being sought because patients are being more honest than they have in the past about whether the condition is actually work related. Victor said he was unwilling to adopt that as an excuse as he felt higher workers’ compensation reimbursement rates were incentive enough for providers to seek treatment under that system.
WCRI’s findings clearly raise new questions with respect to how the ever-changing face of American Health Care coverage will affect state workers’ compensation systems. As obstacles have always plagued both insurers and injured workers with respect to payment for treatment, it remains increasingly more important for employees and employers follow injury reporting guidelines meticulously to avoid improper case shifting.
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About the author. Ryan Benharris is a Partner at the Law Offices of Deborah G. Kohl in Fall River, Massachusetts. Mr. Benharris concentrates his practice in the areas of Massachusetts Workers’ Compensation, the Longshore and Harbor Workers’ Compensation Act, Social Security Disability, and Municipal Accidental Disability Retirements and Appeals. He earned his B.A. from the University of Massachusetts – Amherst in 2001 and his J.D. at Southern New England School of Law (now known as University of Massachusetts School of Law – Dartmouth) in 2005. In 2008, he was awarded the Stanley Rudman Award for Advocacy by Massachusetts Continuing Legal Education. He is a frequent lecture at MCLE on Massachusetts Workers’ Compensation. He also served on the faculty for the 2013 Massachusetts National Academy of Elder Law Attorneys CLE as a speaker on Social Security Disability Practice for Attorneys. Outside of his practice, Mr. Benharris was elected President of the University of Massachusetts School of Law Alumni Association in 2013 after serving as a Director on the board for more than five years (two as its Vice-President). Mr. Benharris is a member of the Massachusetts Bar Association, the Workers’ Injury Law & Advocacy Group (both its original chapter and its Longshore and Harbor Workers Compensation sub-division), and the National Organization of Social Security Claimants’ Representatives. He is a contributing writer for LexisNexis Practice Guide Massachusetts Workers’ Compensation (LexisNexis).