How Will the Affordable Care Act (ACA) Impact the Workers’ Compensation System?

As a TPA of workers’ compensation claims we regularly get asked, “How will the Affordable Care Act (ACA) impact the workers’ compensation system?” The true response is that we are not certain of the exact implications. Ultimately, time will tell. However, research on the subject has led us to believe that the Affordable Care Act could impact the system in the following ways:

1) Increased demand for physicians may result in a shortage of supply

  • More insured individuals will result in a greater demand for treatment, which could lead to longer waiting periods for appointments for all.
  • Extended waiting periods could drive increased indemnity expense. Also, this issue could add to further complications to higher severity claims.

2) Impact of private health insurance deductibles

  • Potentially, if an individual is faced with a high deductible payment for private health insurance that they cannot afford, they could be tempted to look to shift the expense elsewhere. One logical place could be the workers’ compensation system.

3) Fee Schedules

  • If fee schedules within the ACA framework are capped at a rate that is below workers’ compensation fee schedules, it is conceivable that — when in doubt — medical facilities could look to shift treatment to the occupational route vs. private health insurance. In states where the workers’ compensation fee schedule is aggressive (such as California), the opposite of this phenomenon could be true.

4) Healthier Workforce

  • More insured individuals should result in a higher percentage of the workforce with access to quality preventative healthcare.
  • Should result in a healthier overall population, with potentially lessco-morbidity.
  • The impact could be fewer claims, quicker recovery time & positively impacted medical costs.

What can be done to control the impacts of the ACA?

Thoughtful, proactive claim administration will be the key to mitigating the impact of a major change to the workers’ compensation system such as the ACA. A couple up-front tools that are very effective are Predictive Modeling and Nurse Triage programs. Each of these will help to identify adverse claims early on in the process. Early identification creates opportunity for the claim administrator to take actions that will impact potentially negative costs that could be associated with the ACA.

In Conclusion

Ultimately, it may take years to conclusively determine the impact (good or bad) that the ACA had on the workers’ compensation industry. Each state may experience slightly different trends. The key will be to watch the roll out closely and to be prepared to modify your program, or approach, accordingly.

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