Workers' Comp and the Affordable Care Act

Thursday, July 5, 2012 | 0

Assuming that Obamacare isn't grievously wounded by Congressional de-funding and that a Romney win in the election doesn't result in repeal of the law, what effect will it have on workers' comp?

I've already received several client e-mails asking whether the Affordable Healthcare Act will have any affect on their cases.

For most California workers' comp cases that are in process, the answer is no. Injured workers now in the system probably won't see effects unless they remain in the comp system for years.

Longer term, Obamacare will probably have significant effects, but the degree of this is currently speculative.

For example, it's unclear what effect Obamacare will have on utilization of the comp system. Will some workers who did not have group health insurance or individual policies now have coverage and forgo claims that their conditions are industrial? That's a known unknown.

How will access to care be affected? That's also hard to gauge. If millions of people who lacked insurance coverage now gain coverage, who will treat those who are newly insured? Hospital emergency room doctors may no longer see waves of uninsured patients, but where will the doctors be recruited to the masses of the newly insured? Some of those may come from the comp system, particularly from the sort of primary care clinics that often now are front-line occupational clinic treaters. But again, this is just speculation.

California currently uses its own fee schedule to compensate treating doctors in workers' comp, but for years there has been talk of moving to an alternative payment system based on Medicare reimbursement methods. Many of the specialized care doctors in California have resisted this move which would lower their pay but boost pay for primary care providers.

Arnold Schwarzenegger's administration never got around to dealing with this and it's unclear what Jerry Brown's Division of Workers' Compensation intends to do on this issue.

Obamacare will make further adjustments to Medicare reimbursement rates. But California's workers' comp system may or may not transition from its unique reimbursement system to a Medicare based formula, so again the effects of the Affordable Healthcare Act aren't clear.

Longer term, Obamacare may have affects through emphasis on wellness programs, research on effective treatments, efforts to increase use of electronic medical records, use of generic medications and other initiatives to increase medical efficiency.

Harder to know is whether workers' comp medical costs can be held down somewhat if more workers have their co-morbid conditions addressed.

For example, workers with underlying diabetes and obesity tend to have more complications in their medical treatment. Under California case law, workers' comp insurers can be held liable for treating the underlying medical conditions if that is necessary in order for the industrially related condition to be treated. Studies have shown that workers with co-morbid conditions tend to have longer recovery times and more complications in treatment. Bottom line: it's more expensive.

Again, this is one of the known unknowns. If the longer trend is to a healthier populace which has access to healthcare, perhaps there will be long-term comp cost savings from Obamacare. But not all American healthcare trends are treatment access driven; diet, lifestyle and demographic trends play a role as well.

Another significant impact of the Affordable Care Act may be in the realm of workers' comp settlements. Currently, many injured workers are reluctant to settle their cases and give up the right to claim future medical care at the comp carrier's expense. This results in cases being carried on insurer books for decades, tying up reserves.

If health insurers will not be able to deny insurance coverage to individuals with a preexisting condition, will an injured worker be able to cash out medical and then get treatment for that same industrial injury or occupational disease under the group health or private insurance policy?

If this issue has been addressed in the Obamacare statute or any regulations yet developed, I'm not aware of it (blog readers with any insight into this are invited to e mail me their information at jyoung@boxerlaw.com)

Currently, my understanding is that under current law, if a worker who is on Social Security disability or Social Security Income and therefore Medicare eligible settles with a Medicare set-aside, regulations do not allow them to use the set-aside money to purchase health insurance with that money, i.e. the MSA money is to be used for treating the work related condition only, not for purchasing health insurance (of course, a worker could use other settlement funds to purchase health insurance or a policy that supplements Medicare).

If Obamacare survives, we'll likely see workers' comp settlements that will fund health insurance. But then again, perhaps regulations will clarify that workers' comp injuries remain an excluded pre-existing condition.

Under our current healthcare system, many injured workers have trouble getting any health insurance if they are not working. Individual coverage can be difficult to find even if the work condition is excluded from coverage. So Obamacare may be a boon to those workers if subsidies are enough to help workers pay for coverage, particularly workers who are unemployed after an injury.

There are other aspects of Obamacare that merit mention, including the "Libby" provisions that may serve as a model for mass occupational diseases that is described in Jon Gelman's blog:

Here is a link to a study by Paul Heaton at Rand on the effect of Romney's Massachussetts healthcare reform on the Massachussetts workers' comp system.