Medical providers who see reductions in revenue from healthinsurers due to Obamacare's cost-containment measures may try toincrease the volume and mix of services that can be billed toproperty and casualty carriers to compensate, a new reportcontends.

Whle Obamacare provisions do not directly target or affectP&C insurance, the Insurance Research Council, in a reporttitled, “The Affordable Care Act and Property-Casualty Insurance,”says, “To the extent the cost-containment provisions of the ACAnegatively affect medical-provider revenue, then efforts byproviders to increase revenue from other sources, includingproperty and casualty insurance, should be expected.”

Most medical providers that treat injuries covered by P&Cproducts, such as auto insurance and workers' compensation, “arelikely to be affected by the cost-containment efforts of public andprivate health insurers,” which could have a “long-term effect onproperty and casualty insurance claims experience and costs,”according to the report.

P&C carriers could be “particularly vulnerable” tocost-shifting efforts, the IRC says, because they do not have thebargaining power that health insurers have when it comes tonegotiating prices for medical services. Large health insurers, theIRC says, are able to negotiate lower prices on medical services,while individual, uninsured purchasers of services find themselvesat the opposite end of the spectrum. P&C carriers findthemselves somewhere in the middle, says the IRC.

Should medical providers try to raise revenues by increasing thenumber of services provided to patients, the IRC says insurancesystems “with relatively weak utilization controls” will beespecially vulnerable. The report adds that P&C carriers lack“the kind of precertification and concurrent utilization-reviewcontrols that are frequently applied in public and privatehealth-insurance programs.

P&C carriers may also be subject to claim shifting frominsured individuals, the report argues. If employer-sponsored plansare altered to increase out-of-pocket costs for insureds, such asthrough higher deductibles, the IRC says insureds could claim thatan injury is covered by P&C insurance. “In some cases,” the IRCsays, “the claim may be legitimate, but would have been previouslyfiled as a health-insurance claims.” In other instances, claimsmight be fraudulently represented as P&C related, argues thereport.

The potential impact on P&C insurance is not all bad though,according to the IRC report. P&C carriers could see fewerclaims if the number of uninsured is reduced—a key goal ofObamacare.

The IRC says, “By reducing the number of uninsured, the ACAcould potentially reduce the number of fraudulent claims” whereclaimants' primary motive is to secure coverage when they are notcovered by health insurance. The impact on P&C insurers,though, depends on how greatly the law reduces the number ofuninsured. “If the impact of the ACA on the uninsured population issignificant, then the potential impact on property and casualtyclaim frequency could also be significant,” the IRC says.