The Healthcare Reform Bill and Workers Compensation

At the moment, health care reform appears to have a number of positive and negative potential impacts on workers’ compensation over the next few years. The net results cannot be estimated this early in the game. We can, however, identify a few elements and their possible consequences.
 

1.     Insuring the now uninsured: Positive — employees who have health insurance tend to file fewer workers’ compensation claims. They have less incentive to cost shift. Another result will be that chronic medical conditions will be, over time, better controlled and less likely to increase the severity of work related claims.

 

2.     Availability of care: Negative — with a large number of people having new health coverage, doctors and facilities may be swamped in some areas. The problem will lead to

 

 (a) delays in appointments for workers’ compensation related medical treatments and,
 (b) less willingness by providers to participate in occupational medical networks and offer discounts off fee schedules.

 

3.     Removing the pre-existing exclusion: Unknown — in 2014 the pre-existing exclusion will disappear in group health. This cuts several ways at once. There will be less incentive for employees to claim long standing “wear and tear” conditions as work related — a positive change. There may also be much greater demand on employers for workplace and job accommodations leading to new exposures and safety issues.

 

4.     Medicare reform: Negative — the passage of HR 3590 was predicated on massive adjustments in Medicare reimbursement levels, which are marginal for medical providers now. This will pressure providers, especially hospitals and some specialists, to cost shift where possible and workers’ compensation is a soft target in most states. We could see significant increases in medical costs per claim as the Medicare changes begin to bite in a couple of years. (The recession-driven cutbacks in state Medicaid reimbursements will only amplify this effect in the near term.)

 

5.     Libby care: Unknown — the "Libby care" clause of HR 3590 (sec 1881A) is not intended to lead to the federalization of industrial diseases absent some very specific catastrophic circumstances comparable to those of the WR Grace disaster in Libby, MT. But we all know that ERISA was intended to address a very narrow set of union pension abuses when it was passed, but the Department of Labor, abetted by the Florida Administrators decision of the Supreme Court in 1977, expanded it greatly. The Libby care provision will bear watching.

 

Workers’ compensation was not at the table when Congress hammered out its health care reform solutions. Other than a few glancing mentions, such as the Libby care clause noted above, occupational medicine was overlooked and, by default, left to the states. This is probably a good thing, on balance. Yet, as health care reform changes begin to penetrate the enormous US health care enterprise, they will impact workers’ compensation in many overt and subtle ways over the next several years. (workersxzcompxzkit) Carriers, third party administrators, and managed care vendors will need to be alert to capture possible advantages and avoid potential nasty surprises.

  

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.