PPACA: The End of Workers\' Compensation?
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PPACA: The End of Workers\' Compensation?



Paper written for online elective course on the PPACA as part of my MHA degree.

Paper written for online elective course on the PPACA as part of my MHA degree.



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    PPACA: The End of Workers\' Compensation? PPACA: The End of Workers\' Compensation? Document Transcript

    • Running Head: PPACA: The End of Workers’ Compensation? 1 PPACA: The End of Workers’ Compensation? Richard Krasner Florida Atlantic University HSA 6930 The 2010 Patient Protection and Affordable Care Act Dr. Mahle August 1, 2011
    • Running Head: PPACA: The End of Workers’ Compensation? 2 Table of ContentsIntroduction .................................................................................................................................................. 3Impact of PPACA on Workers’ Compensation .............................................................................................. 4Conclusion ................................................................................................................................................... 10References .................................................................................................................................................. 11
    • Running Head: PPACA: The End of Workers’ Compensation? 3Introduction On March, 25, 2011, a memorial service was held on a New York City street corner nearWashington Square Park, now the site of one of NYU’s main campus buildings. The memorialservice was held by family members and thousands of people who had marched to the sitethrough Greenwich Village. They were commemorating the famous fire that occurred there onehundred years earlier and took the lives of 146 young women, mostly Italian and Jewishimmigrants, (Wikipedia, 2011). The acquittal of the owners of the Triangle Shirtwaist Companyand the tremendous loss of life began a reform movement both in New York State andnationwide to improve working conditions, fire safety and access to medical and other benefitsfor workers injured on the job through state workers’ compensation laws. The workers’ compensation industry began that day one hundred years ago, and thequestion as to whether or not workers’ compensation will continue to be a remedy for thosekilled or injured while working, under the PPACA, is the topic of this paper. While the law isonly a year old, and was signed within days of the ninety-ninth anniversary of the Triangle fire,how it will impact workers’ compensation remains unknown, but we can look at some possibleareas of concern to those in the workers’ compensation industry.Historical Background In 1972, the National Commission on State Workmen’s Compensation Laws issued areport that took the position that it would be unwise and unnecessary for any national health
    • Running Head: PPACA: The End of Workers’ Compensation? 4insurance program to assume medical costs of workers’ compensation. The Commission statedthat to fold workers’ compensation medical costs into a national health insuranceprogram wouldbe inconsistent with the central tenet of workers’ compensation and that the costs of work-relatedinjuries and diseases should be allocated to the responsible source. In the 1990’s, the ClintonAdministration’s health reform proposals favored the merging of the medical component ofworkers’ compensation into a federal health care system. The Administration backed off of thisproposal after strong opposition from business owners who said it would not produce any realsavings, would have pre-empted state “choice of provider” laws and empower employees toselect providers from any federally approved health plan, (Eaton, 2010).Impact of PPACA on Workers’ Compensation My perusal of the available research, post enactment, on the impact PPACA will have onworkers’ compensation led me to five online articles or commentaries from individuals andorganizations heavily connected to or involved with the workers’ compensation industry. Whileeach of them said it was too early to know the full effect of the law on workers’ compensation,all of the authors stated that there were twoimpacts that PPACA might have on workers’compensation: direct and indirect.One author even said there might also be speculative impactsas well, (Krohm, 2011).However, there was no consensus on which aspects of the law weredirect impacts and which were indirect impacts, as will become apparent.
    • Running Head: PPACA: The End of Workers’ Compensation? 5 Direct Impacts Much of the research showed that there are very few direct impacts on workers’compensation, (Eaton, 2010). The obvious reason for this is that workers’ compensation was nota minor focus of the legislation, (Eaton, 2010; Krohm, 2011). Krohmstated that, “there is nolanguage in the law that would directly and explicitly affect workers’ compensation.From thebeginning of bill-drafting in both the House and Senate, it was clear that workers’ compensationwas not an area that should get mixed into the reform process”. Three direct impacts cited by two other authors included revisions to the Black Lungprogram that will make it easier for coal miners and their survivors to obtain black lung benefits,(Harrison, 2010; National Council on Compensation Insurance [NCCI], 2010), new taxes onpharmaceutical and medical device manufacturers that might be passed on to policyholders,causing higher workers’ compensation premiums, (Harrison, 2010), and changes in Medicarereimbursement levels that may have a cost impact for those states that utilize Medicare as a basisfor reimbursements in their workers’ compensation fee schedules for physicians and hospitals(inpatient, outpatient and ambulatory surgical centers), (NCCI, 2010). Indirect Impacts The authors compiled an extensive list of indirect impacts of the PPACA on workers’compensation, and there is considerable overlap between them. Black Lung claims was cited byEaton as an indirect impact, contradicting what Harrison and NCCI had stated. Another indirectimpact cited by Eaton had to do with the requirement of theSecretary of Health and HumanServices to determine whether the reporting of health services delivered through workers’
    • Running Head: PPACA: The End of Workers’ Compensation? 6compensation medical services should be a part of the new national reporting standards, whichwill result in changes to state record keeping and reporting practices. Standards for the coordination and subrogation of benefits would have been established ifthe language in an earlier version of the legislation had been passed, but this portion wasremovedduring reconciliation, (Eaton, 2010; NCCI, 2010). Revision of Medicare reimbursement levelswas also cited by Eaton as an indirect impact on workers’ compensation. Expansion of Medicaidcoverage, which will add between 15 and 20 million people to Medicaid, will place a stress onstate budgets that pay most of the Medicaid benefits. This will make it difficult for workers’compensation systems to get additional revenue to increase benefits or improve administrativeservices, (Eaton, 2010; Krohm, 2011). On the other hand, new excise taxes on pharmaceuticals and medical devices were citedby Eaton and NCCI as an indirect impact that would result in rising costs for devices used inworkers’ compensation cases. Related to that was the indirect impact of an expanded MedicarePart D that would cause pharmacy costs to rise due to extra demand, and the absence of pricecontrols or re-importation options, (Krohm, 2011).Pilot projects that will explore ways to reduceor contain costs may involve evidence-based protocols to be used in workers’ compensation,(Eaton, 2010). Access to providers, especially with the increase in the number of Americans havinghealth insurance, will impact workers’ compensation because with the decline in the number ofphysicians choosing primary care as their specialty, those that do choose to work as primary care
    • Running Head: PPACA: The End of Workers’ Compensation? 7physicians will do so if reimbursement rates are higher under private plans than under workers’compensation, (Eaton, 2010). Lastly, the elimination of the donut hole through the legislationmay lead to increases in prices, especially those drugs prescribed for workers’ compensationclaimants, (Eaton, 2010). Additionally, the short supply and patient backlog of primary care providers in rural andpoverty stricken areas may get worse after 2014 due to penalties for those who remain uninsured,and when tax credits to subsidize purchase of insurance kick in, which may impact injuredworkers as well, (Krohm, 2011). Other indirect impacts mentioned as being far-reaching was thatthe frequency and importance of “medical use” review will increase because health insurers andworkers’ compensation insurers battle over responsibility for medical expenses; there is also aquestion as to whether or not health reform will increase or decrease the number of workers’comp claims, (Krohm, 2011). This is due to a provision in the law that allows health insurers to charge smokers 50%more for coverage and another provision provides that if employees are enrolled in a companywellness program or meet certain health standards, they can get a 30% reduction inpremiums,(Harrison, 2010). This in turn would lead to improved national health, which wouldhelp to reduce workers’ compensation claims, (Eaton, 2010; Harrison, 2010; NCCI, 2010). Still others believe that because more employees will have health insurance, they will beless likely to file questionable or hard-to-prove claims, if they can get health insurance to pay forit. On the other hand, there are some who believe that PPACA will result in increased workers’compensation claims because if they have health insurance they will take advantage of medical
    • Running Head: PPACA: The End of Workers’ Compensation? 8services such as surgeries. More treatment and surgeries means they will miss time from work,which will increase workers’ compensation claims to receive indemnity (wages and otherincome) benefits while not working, (Harrison, 2010). On the heels of improving the overall national health, debate exists among those in theindustry and the nation at large as to whether the legislation will improve or damage the nationaleconomy, with those in favor of the legislation believing it will make a positive impact, andthose against who focus on the immediate costs and believe it will stifle job creation and drag therecovery, (Eaton, 2010). One final indirect impact is that health reform would be seen as astepping stone to the federalization of workers’ compensation. A bill introduced to the House ofRepresentatives in 2009 would create a National Commission on State Workers’ CompensationLaws to examine state workers’ compensation programs. It was believe that this would be aprecursor to federalization, but Harrison does not agree with this idea because the bill has beenstalled in committee. Speculative Impacts Another area of overlap between the authors is in what Krohm considered speculativeimpacts on workers’ compensation. He suggested that there would be a slight reduction in claimsfrequency rates because more workers will have access to health insurance. This is highlyspeculative because the connection between general health coverage and the propensity to fileworkers’ compensation claims is scant. He believes that more workers will be healthier becausethey have greater access to care, especially if they can lessen or reduce the impact on their healthfrom such problems as obesity, smoking, depression and substance abuse.
    • Running Head: PPACA: The End of Workers’ Compensation? 9 Another speculative impact he mentions is that the pilot programs and experimentationcalled for in PPACA to create better models for managing the coordination and delivery ofmedical care, and as Eaton indicated would lead to more evidence-based protocols on how totreat certain high-cost occupational injuries and diseases. Finally, he speculates that the impact ofPPACA on the national economy and on workers’ compensation in particular, will be one of“wait, see and respond accordingly”. One speculative impact that none of the authors mentioned has to do with something thathas already happening even before the creation and enactment of PPACA. Some four years ago,I learned about a company in Connecticut that was engaged in the health care claims subrogationarena. This company had created a software system to participate in a pilot project the New YorkState Workers’ Compensation Board was conducting in connection with the Health InformationMatching Program (HIMP) laws for the purpose of subrogating health care claims that are laterdetermined to be workers’ compensation claims, but that when the injured worker was treated,presented his employer’s health insurance card, and therefore the health care carrier was billedfor the services provided, instead of the workers’ compensation carrier. “New York law provides that a health insurer who makes payments for medical services on behalf of an employee who has suffered a work-related injury is entitled to be reimbursed by the employee’s employer or its workers’ compensation carrier, if the claim is found compensable.” WCL §13(d)(1) In my research of the subrogation arena, I discovered that there are many companies outthere doing the same or similar types of work. It is purely speculative on my part, but it ispossible that as more people get covered under PPACA with health insurance, the probability
    • Running Head: PPACA: The End of Workers’ Compensation? 10that more workers will present their health insurance card instead of telling the provider that theysuffered an on the job injury and should be covered under the workers’ compensationinsuranceof their employers.What impact this will have on the number of workers’ compensationclaims filed in the future is anyone’s guess. But the potential exists for a substantial increase inworkers’ compensation claims not only in New York, but nationwide if the situations in whichthis occurs happens elsewhere. Again, we will have to wait, see and respond accordingly.Conclusion The consensus of opinion regarding the impact of PPACA on workers’ compensation can besummed up by Eaton as follows: “the PPACA will have little direct or immediate effect on state workers’compensation systems. However, there is potential for considerable indirect affects, especially withregard to record keeping, coordination of benefits, and other details of administration. The actual impactof the recent federal legislation is difficult to predict. Some of the potential indirect effects may increasecosts while others may moderate or even decrease costs.” So to answer the question as to whether PPACAis the end of workers’ compensation, we will have to wait, see and respond accordingly when the timecomes.
    • Running Head: PPACA: The End of Workers’ Compensation? 11 ReferencesEaton, T.A., The Impact of the Patient Protection and Affordable Care Act of 2010 On State Workers’ Compensation Systems. Presentations and Speeches.Paper 28. Retrieved from http://digitalcommons.law.uga.edu/fac_presp/28Harrison, D.M., (2010). Health Care Reform and Workers’ Compensation, Alabama Employment Law Letter.Retrieved from http://www.hrhero.com/hl/articles/2010/04/22/health-care- reform-and-workers-compensationKrohm, G., (2011). What Will Federal Health Care Reform Mean For Workers’ Compensation in the U.S.? Retrieved from http://www.iaiabc.org/i4a/headlines/headlinedetails.cfm?id=156National Council on Compensation Insurance, Inc., (2010).National Health Care Law: Implications for Workers’ Compensation Insurance. Retrieved from https://www.ncci.com/documents/NationalHealthandWC.pdfNew York State Workers’ Compensation Law, Article 2, Section 13 (d) (1).Wikipedia, Retrieved from http://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire