Many serious discussions took place during 2016 that required claims management teams to examine their impact on workers’ compensation costs. While these discussions may be in the past, the New Year signals an opportunity to continue the conversation and make progress in managing risk and costs within every program.
Affordable Care Act
The change in presidential administrations will certainly bring changes to healthcare in the United States. Over the last several years, the Affordable Care Act (ACA) brought changes to all workers’ compensation programs. These changes had an impact in the following areas:
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- Cost shifting under the ACA: The individual mandate impacted workers’ compensation in that there were now more people insured under private insurance plans. This change put more pressure on medical providers to increase fee schedule reimbursement rates to offset costs associated with marketplace subsidies (Medicaid and Medicare patients). Doctor availability, or the lack thereof, also drove conversations on treatment of work-related injuries.
- Claim shifting under the ACA: Changes were also felt in this area. Various mandates under the ACA has an effect on the way parties view workers’ compensation medical benefits—the decrease in uninsured rates across the country removed one stigma of workers’ compensation and its perceived role among many as being “medical insurance” for the uninsured.
- Solvency of government healthcare such as Medicare. Medicare Secondary Payer compliance will continue to remain a hot button issue even though the ACA did not directly change this program.
Any changes to the ACA will influence claims frequency in workers’ compensation. Proactive stakeholders should be engaged on this issue and ready to respond.
Prescription Drug and Opioid Abuse
The overuse and abuse of various prescription drugs continues to be a driver in workers’ compensation program costs. Congress and state lawmakers have been mainly reactive to this problem and failed to work in a proactive manner. While states are implementing guidelines for the proper use of painkillers in workers’ compensation programs, members of the claims management teams and attorneys need to address this issue in their claims.
- Monitor prescription drugs in claims files and implement drug utilization review when allowed;
- Recommend prescription drug “contracts” with doctors, injured parties and other stakeholders when concerns about overuse/abuse are raised; and
- Engage treating physicians about legitimate concerns of overuse/abuse, if permitted
The American Workforce
Over the last few decades, manufacturing inside the United States has been in steady decline. This forced the labor market to transform itself into a service-based economy. Change could be on the horizon with major manufacturing becoming more interested in producing products at home. If so, this will give rise to a change in how workers’ compensation programs manage risk and improve their programs.
In the meantime, successful and cost-effective workers’ compensation programs will continue to deal with the following issues:
- The aging workforce in the United States;
- A mobile workforce that performs job functions from remote or via telecommuting; and
- Ongoing issues and concerns with matters such as violence, street drugs in the workplace, or injured workers’ using “medical marijuana.”
Conclusions
Regardless of how things do change, now is the time for all interested stakeholders to re-evaluate their workers’ compensation programs. A special emphasis on this review should include:
- Proper workplace safety and training that is consistent. Getting buy-in from upper management and union leaders is key;
- Being prepared for emergencies. This include all work-injury and unexpected disasters. This should include severe weather and man-made incidents;
- Re-commitment by yourself and team to driving efficiencies in your workers’ compensation program. Everything needs to be on the table when it comes to this evaluation; and
- Staying connected to injured employees and seeking opportunities to return them to work. This not only includes within the same organization, but also with other non-profit partners who employ persons of all abilities.
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Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices.
Contact: [email protected].
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