Impact of Affordable Care Act on Workers’ Compensation: Case Shifting

The opening sesson at the 2015 WCRI conference focused on whether the ACA was leading to case shifting in workers’ compensation.  The speaker was Richard Victor, President & CEO of WCRI.

One of the biggest concerns with regard to ACA’s impact on workers’ compensation is the risk of increase case shifting from group health to workers. compensation.  A recent WCRI study focused on this issue.

A central part of ACA is creation of Accountable Care Organizations (ACOs). ACOs are a network of doctors and hospitals that share financial and medical responsibility for providing care for patients. These ACOs have financial incentive to produce better outcomes for the patients. Some in the industry are looking at whether workers’ compensation can be incorporated into these ACOs because of their outcomes-based focus.  

In many cases, whether or not a condition is work related is determined mostly by the treating physician’s assessment. Since workers’ compensation often pays higher rates than group health, the providers in a traditional system have incentive to shift to worker’s comp. In addition, that cases that are workers’ comp and their outcomes are not factored into the ACO performance evaluation. 

According to the WCRI study, this cost shifting will mostly happen with soft tissue injuries are involved and it is most likely to happen in states where there is higher prevelence of Capitated health plans, where physicians are reimbursed a flat rate per patient. The study showed a 30% increase in soft tissue workers’ compensation claims in states where Capitated health plans are common. In states with less than 10% Capitated plan enrollment there was no noted increase in soft tissue workers’ compensation injuries. 

The study also showed this increase in cost shifting when the employee was covered under a large deductible plan for their group health. 

Since the study appears to show a financial incentive for the cost shifting to workers’ comp, the study in the future will focus on whether this trend toward shifting happens more in states with a higher workers’ comp fee schedule.

One person from the audience questioned whether this was actual cost shifting or if this was things ending up under workers’ compensation that should be there in the first place. Richard indicated this was unlikely given the significantly higher reimbursement rates under workers’ comp in many states.