Why is it Acceptable to Shift Costs to Workers' Comp?

Tuesday, October 12, 2010 | 0

By Joe Paduda
Health Strategy Associates and CompPharma

On Sept. 30, WorkCompCentral's [subscription required] Bill Kidd wrote about the battle in Illinois over reimbursement for surgical implants.

The quick-and-dirty is hospitals are resisting a reduction in compensation for the devices themselves from 65% of billed charges to the manufacturer's invoice price plus 25% plus shipping and handling.

While the 'invoice price' is fungible at best, the change will almost certainly reduce comp payers' costs in what is rapidly becoming one of the costliest states in the union.

That is, if hospitals' efforts to overturn the change are successfully resisted. You can read Bill's piece for the details what i want to address is the larger issue why do some providers think it is acceptable, if not standard business practice, to charge workers comp claimants more for care than other patients?

Sure, this makes sense for primary care and treating specialists - we all know it takes more time to deal w the rules, regulations, return to work process etc inherent in work comp. And it takes a good deal more work for a retail pharmacy to process a comp script than a Medicare or group prescription.

But that's not the case for medical devices, or hospitals, or many other types of care and treatment. Yet hospital care for comp patients is almost always significantly more expensive, medical device costs are much higher, and outpatient facility charges are legendary for their high cost.

On one hand, I completely understand the providers' perspective - with declining Medicaid and Medicare reimbursement, the money's got to come from somewhere.

But I don't agree with it. This amounts to a hidden tax, a surcharge on employers to pay for un- and under-compensated care that hurts employers, jobs, insurers, taxpayers, school boards, governments.

As reform becomes the law of the land, there will be less need for facilities to shift costs to workers comp. Here's hoping there will be less shifting, as well.

Joe Paduda is owner of Health Strategy Associates, an employer consulting firm in Connecticut, and co-owner of CompPharma, a consortium of pharmacy benefit managers. This column was reprinted with his permission from his blog, http://www.joepaduda.com