In the wake of the healthcare-reform law, cost shifting of non-work-related injuries to the workers' compensation remains a potential issue, and potential stress on the healthcare system could lead to delays and drive workers' comp costs up, says broker Marsh in a briefing.

But the law's focus on improvements in standards of care could reduce the use of costly procedures that produce questionable results, and employers could see premium refunds if they maintain better-than-expected performance in their healthcare programs, Marsh says.

In its analysis, “Health Care Reform and Workers' Compensation Programs,” Marsh says, “Employers have long been concerned that injuries from non-work-related causes will be shifted to workers' compensation” due to higher reimbursement rates for medical providers and the lack of deductibles and co-payments for employees. While some speculated that the greater access to health insurance under the Affordable Care Act would reduce cost shifting to workers' comp, Marsh says it has “become clear that the law will not result in all Americans having health-insurance coverage.”

One-in-ten large companies plan to cut back on hours for at least a portion of their workforce to avoid providing coverage for employees working 30 or more hours per week, Marsh points out, citing a Mercer survey, while other employers are using higher co-payment and deductibles to help offset cost increases. “It appears, therefore, that the financial incentive for employees to shift treatment toward workers' compensation will continue under the ACA,” Marsh says.

Regarding access to care, Marsh notes that the law is designed to increase the number of individuals in the U.S. with health insurance, which “could put additional stress on a healthcare system that is already short on doctors.”

Marsh says this could particularly impact specialists, leading to delays in obtaining diagnostic tests and scheduling elective surgeries and other procedures. “Longer periods of disability and complications as a result of such delays would ultimately drive workers' compensation costs up,” says Marsh.

Employers, therefore, must develop medical networks “that focus on quality of care and outcomes—even if it means paying more on a fee-for-service basis.”

While the healthcare industry has traditionally focused on volume—more patient admissions, tests and procedures to drive higher revenues—Marsh notes that post-reform, the industry has shifted focus to improving standards of care and achieving better patient outcomes. Marsh says, “If this transition results in less emphasis on costly procedures, which often produce questionable results, workers' compensation costs could be reduced.”

The law also “provides for insurers to rebate premiums to employers that have better-than-expected performance with their healthcare programs,” says Marsh, which employers can either pass on to workers or use to offset future premiums.

Marsh warns though, that the National Council on Compensation Insurance (NCCI) has already “indicated that if premium refunds are given to employees, this would be considered payroll under the workers' compensation premium calculations.” As workers' comp premiums are tied to payroll, costs could rise for employers that pass the refunds on to workers.

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Marsh Weighs Obamacare Impact on Workers' Comp System

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