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Look at health care topics affecting workers' compensation

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  1. 1. The Impact of Health Care Reform on Workers’ Compensation Dean Hashimoto, M.D., J.D. Boston College Law School Partners HealthCare System Massachusetts Department of Industrial Accidents
  2. 2. Objectives: <ul><li>Describe possible impacts of Health Care Reform on workers’ compensation system, short-term and long-term. </li></ul><ul><li>Conclusion: No immediate impact with long-term impact likely related to reduction in Medicare reimbursements. </li></ul>
  3. 3. Fundamental Difference in Approach <ul><li>While the 1993 Clinton proposal sought to combine WC medical care with mainstream medical care, the 2010 Health Care Reform rejected this “24 hour care” approach. </li></ul><ul><li>Only a few specific references to occupational medical benefits: Libby Montana and Black Lung. </li></ul>
  4. 4. Fundamental Differences <ul><li>Workers Comp </li></ul><ul><li>Employer mandate </li></ul><ul><li>No deductibles, co-insurance, etc. </li></ul><ul><li>High prevalence of musculoskeletal injuries </li></ul><ul><li>Indemnity relationship </li></ul><ul><li>Litigation </li></ul><ul><li>HC Reform </li></ul><ul><li>Individual mandate </li></ul><ul><li>“ Consumer driven” </li></ul><ul><li>Entire disease and injury spectrum </li></ul><ul><li>Focus solely on health costs </li></ul><ul><li>Less litigation </li></ul>
  5. 5. Major features of Health Care Reform <ul><li>Insuring the uninsured. </li></ul><ul><li>Improve access to care. </li></ul><ul><li>Removing pre-existing medical condition exclusion. </li></ul>
  6. 6. Will insuring the uninsured impact WC by reducing the number of WC claims?
  7. 7. Insuring the Uninsured <ul><li>Reduce WC claims: </li></ul><ul><li>Less incentive to cost-shift into WC. </li></ul><ul><li>Lessen severity of medical injuries due to healthier workers. </li></ul><ul><li>Little or no impact: </li></ul><ul><li>Many of uninsured are young and healthy </li></ul><ul><li>Massachusetts experience for 2 years </li></ul>
  8. 8. Will improving access to doctors by the general population hurt access to medical care by WC recipients?
  9. 9. Will improving access to doctors by the general population hurt access to medical care by WC recipients? <ul><li>Yes: </li></ul><ul><li>The increased need for PCPs and other providers will result in increasing delays and access problems for WC patients. </li></ul><ul><li>No: </li></ul><ul><li>WC medical care is often provided by specialty networks or by providers with this interest. </li></ul><ul><li>WC patients will become more desirable financially as Medicare reimbursement decreases. </li></ul>
  10. 10. Will removing the pre-existing exclusions from general health insurance policies impact WC?
  11. 11. Impact of ending pre-existing condition exclusions? <ul><li>Yes: </li></ul><ul><li>Less incentive to claim longstanding “wear and tear” conditions. </li></ul><ul><li>No: </li></ul><ul><li>Increased pressure to cost shift into WC because of lower Medicare reimbursements. </li></ul><ul><li>Major incentive to file a WC claim is based on indemnity payment. </li></ul>
  12. 12. Will Health Care Reform Impact Medical Inflationary Costs in WC? <ul><li>WC medical inflation has been substantially higher than inflation in group health insurance. </li></ul><ul><li>About 80% of medical costs in WC are driven by utilization rates, rather than the payment structure. </li></ul>
  13. 13. Comparing WC payment rates with Medicare rates <ul><li>WC reimbursement rates are overall substantially higher than Medicare rates, particularly for outpatient surgeries. </li></ul><ul><li>High utilization of PT, chiropractic, MRI, and other services. </li></ul><ul><li>This higher utilization may be justified, at least in part, by the larger focus of restoring functionality and returning the injured worker back to work. </li></ul>
  14. 14. Impact of lower Medicare reimbursement <ul><li>Cost shifting into WC for better medical reimbursements. </li></ul><ul><li>Eventually, less inflationary increases or even decreases in WC fee schedules based on Medicare reimbursement rates. </li></ul><ul><li>However, WC will remain higher than Medicare reimbursements because of larger focus of improving functionality and return to work. </li></ul>
  15. 15. Different approaches to changing medical treatment patterns? <ul><li>HC reform: </li></ul><ul><li>Bundled payments </li></ul><ul><li>Accountable care organizations </li></ul><ul><li>Medical homes </li></ul><ul><li>WC: </li></ul><ul><li>Increase reliance on treatment guidelines and UR. </li></ul><ul><li>Decrease medical reimbursement rates. </li></ul><ul><li>Increase specialized WC treatment networks. </li></ul>
  16. 16. Additional changes associated with Health Care Reform <ul><li>Electronic medical records </li></ul><ul><li>Health promotion in workplaces </li></ul><ul><li>Beyond Health Care Reform: Elimination of Occupational Health and Safety Education and Research Centers? </li></ul>
  17. 17. Promotion of electronic medical records <ul><li>Improved access to medical records. </li></ul><ul><li>Greater opportunity for collaboration between treating providers. </li></ul><ul><li>Increased likelihood that past medical history will be reviewed by treating provider. </li></ul><ul><li>“ Consumer driven” approach likely impacts contents of medical records. </li></ul>
  18. 18. Health promotion by employers and group health insurers <ul><li>Aim is to reduce risk factors and improve overall health of workers and their families. </li></ul><ul><li>Increased employer role is encouraged. </li></ul><ul><li>? Impact on relevant co-morbidities that may affect musculoskeletal injuries including obesity, diabetes, mental health, and substance abuse. </li></ul><ul><li>Example: NIOSH WorkLife Initiative to promote health, wellness, and wellbeing. </li></ul>
  19. 19. Beyond Health Care Reform: Occupational Health and Safety Education and Resource Centers <ul><li>Academic training centers for occupational health physicians and nurses. </li></ul><ul><li>Obama budget proposal eliminates funding. </li></ul>
  20. 20. Conclusions <ul><li>Many unknowns. Flexibility built into Health Care Reform legislation. </li></ul><ul><li>No short term impact. </li></ul><ul><li>Most likely long term impact will be associated with reductions in Medicare reimbursements. </li></ul>