Tag Archives: ahca

Don’t Lower Number on Medicaid….

As Congress returns from recess, the current version of the Senate bill to repeal and replace the Affordable Care Act (ACA) aims to reduce Medicaid spending by $800 billion over 10 years. By reducing the federal match for new enrollees and tightening eligibility standards related to the federal poverty level, the plan will make it harder for people to cycle on and off Medicaid in accordance with their employment status, ultimately reducing the number of “expansion enrollees” that qualified for Medicaid under the ACA. The net effect is to make it financially infeasible for states to continue to cover the ACA expansion population, leading to more than 20 million Medicaid patients losing their insurance over the next decade.

In 2016, total Medicaid spending was $575.9 billion, which is 3.1% of gross domestic product (up from 1% of GDP in 1982). Federal funding accounts for 63% ($363.4 billion) of Medicaid spending (up from 53% in 1982). Actual state spending per Medicaid enrollee varies dramatically across states, ranging from $3,500 to $9,500 per person, per year. This immense variation is partially because of readily explainable differences in input costs (i.e., lower labor costs in low-income states) and significant differences in benefits between states. (Some states, for example, have generous home health programs.) But some of the variation in cost is because of poorly understood factors — such as the relative efficiency of the delivery system in each state.

See also: Don’t Be Dissuaded by Medicaid Myths  

So what if, instead of attempting to control Medicaid costs by reducing the number of individuals enrolled in the program, we looked for innovative ways to reduce the cost of the Medicaid program per customer? If we focus on reducing waste as a way to bring down costs, we could simultaneously improve health outcomes, too. Such an approach is not wishful thinking — it has already been shown to produce real cost savings in some states.

All hospitals operate in slightly different and distinct ways, and only recently has there been enough data available for hospitals and managed care organizations to meaningfully compare their outcomes and use the results to help them create more efficient systems. But some states are starting to work within their own hospital systems, with promising results. Take Maryland. By focusing relentlessly on improving outcomes — for example, through implementing new practices aimed to limit unnecessary medical complications — Maryland has witnessed extensive decreases in hospital complication rates. In the first two years of its initiative (2009–11), complications were reduced by 15%, saving $110 million (0.6% of total hospital cost). This success was attributed, in part, to Maryland’s use of financial rewards and penalties as incentives for hospital performance. The continuation of the program has resulted in further reductions in complications.

Other states have seen similar success. Texas has decreased avoidable emergency room visits by 10% and re-admissions by 25%, for a savings of $100 million (the research on that has yet to be published). Minnesota has decreased re-admissions by 19%, meaning a savings of $70 million for Medicaid. New York is beginning to see similar success. (Full disclosure: Some of the U.S. states referenced are using classification tools from my company, 3M Health Information Systems, to develop new Medicaid payment models.)

How do these state Medicaid programs achieve better outcomes? They use a combination of sharing comparative results between hospitals or managed care organizations to highlight differences between institutions, sharing of best practices and modest financial incentives to improve. Just as important, a pay-for-outcomes approach must focus on a small number of outcomes that have a measurable financial impact and that cover the vast majority of avoidable services or poor outcomes. (If there are hundreds of measures, healthcare institutions will simply get lost.) This small set of outcomes includes hospital complications that can be minimized, such as limiting the risk of patients’ acquiring pneumonia in the hospital after a stroke; treating a cold at a primary care doctor’s office or an urgent care center instead of an emergency room; and limiting avoidable hospital admissions or re-admissions by treating continuing conditions, such as out-of-control diabetes, at the primary care doctor’s office.

These states are led by governors of both parties. These are programs that can have broad bipartisan support, in part because they not only lead to cost savings but also lead to better medical outcomes.

See also: When Leaders Don’t Lead on Medicaid  

There are significant savings opportunities across other states to improve outcomes and reduce waste. Rather than uniformly cutting costs or health care coverage, the federal government could create incentives for progress by instituting programs like the ones these states have already shown can be successful. While the status of repeal-and-replace is unclear, the need to address payment reform — especially for Medicaid — remains. How much money can be saved by improving outcomes? The Institute of Medicine estimates that between 20% and 30% of total healthcare spending is either wasteful or a consequence of poor outcomes. Is there $800 billion in savings available?

A pay-for-outcomes approach won’t solve every problem — but it would be quite a start.

Norbert Goldfield, MD, is medical director of clinical and economic research for 3M Health Information Systems. The opinions expressed in this commentary are the author’s own and do not necessarily reflect the views of 3M.

Why Fairness Matters in Federal Reforms

As Congress looks at restructuring two national insurance plans — the American Health Care Act of 2017 and the National Flood Insurance Program — legislators must address the issue of fairness. That is the view of Wharton professors Howard Kunreuther and Mark Pauly, who co-wrote the book, “Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry.”

In this opinion piece, they argue that considering the issue of fairness in designing these programs is not merely an exercise to aid the old and needy. Rather, it is also to make legislators think about what policies will make premiums less onerous to people with lower risk so they will not be discouraged about getting coverage.

The U.S. is at a critical moment as Congress is attempting to determine how two insurance programs should be structured to help Americans who need protection from physical and financial risk. Both the reauthorization of the National Flood Insurance Program (NFIP) and the American Health Care Act of 2017 raise questions as to whether affected individuals would be treated more fairly under the new legislation than they currently are.

For us, fairness in the context of new legislation means consideration of the impact that a sudden increase in premiums or unexpected changes in the terms of coverage will have on the well-being of the affected individuals.

See also: Flood Risk: Question Is Where, Not When  

When the National Flood Insurance Program (NFIP) was enacted in 1968, there was a concern that high premiums would significantly reduce property values and that this could become an unfair economic strain. For this reason, the NFIP specified that homeowners living in high-risk areas at the time the law was enacted would be charged a subsidized premium.

The same potential conflict regarding fairness applies to health insurance. Is it fair that those with pre-existing medical conditions or those who unexpectedly acquire high-risk conditions might have to pay much higher health insurance premiums than when they were less at risk?  Yet this is what will happen if private insurers are allowed to charge risk-based premiums and politicians decide to provide limited subsidies to cushion those higher premiums.  However, is it fair to impose high premiums on individuals with low risks to finance such subsidies? And is it fair to offer no reward to those who take steps to improve their health status and thus reduce their future health spending risk?

Elected representatives on both sides of the aisle continually espouse the principle of fairness across a wide range of issues, including trade, tax reform and jobs. If they truly want to extend that allegiance to the principle of fairness, they might wish to consider offering some form of financial assistance to help working class families who become high-risk for floods or to help them buy or continue coverage for health care. The choice of the right amount of support regarded as fair is ultimately a political issue where voters’ perspectives may differ.

There are efficient ways to address the fairness problem for both insurance programs that might gain bipartisan support. With respect to health insurance premiums, it is easy to justify assisting low-income and older people who want to buy coverage. Empirical studies of Medicaid programs suggest that individuals care about other people’s health conditions. Many taxpayers are thus likely to support having the public sector cover part of the cost of health insurance for those whose health might be improved by having insurance.

In the case of flood insurance, those subject to water-related damage should receive information on the cost of insurance that reflects their flood risk. If this risk-based premium exceeds a proportion of their income or housing costs, they could be given an insurance voucher or tax credit so they could afford insurance. A new RAND study recommends that those whose total housing costs — including flood insurance premiums — exceed a certain percentage of their income be provided with financial assistance. This would ensure that taxpayers are not subsidizing high-income individuals.

It is important to encourage property owners in flood prone areas to invest in cost-effective, loss-reduction measures. Homeowners could be offered a long-term home improvement loan, tied to the property, to pay for cost-effective ways to mitigate future losses, such as elevating the house or moving utilities to a higher floor, so that the annual cost of the loan, paid all or in part by vouchers or tax credits, would be less than their savings from the reduced risk-based premium. This proposal is not only fair but also encourages property owners to reduce future losses from inevitable disasters. It also avoids using taxpayer dollars to assist uninsured and unprotected victims from hurricanes and floods who will demand and may receive federal disaster relief.

See also: How to Make Flood Insurance Affordable  

In summary, the proposed flood and health insurance programs should be designed with reasonable premiums for high-risk individuals so they will want to purchase coverage that protects them against catastrophic financial losses. At the same time, one needs to be concerned about not discouraging low-risk individuals from purchasing insurance by imposing the subsidy burden on them alone through premiums much higher than their risk rather than on the general population through a broad-based tax. By considering the issue of fairness as an important criterion in designing these programs, we will have taken a major step in enabling high-risk individuals to have coverage while at the same time maintaining the basic principles of insurance.

Republished with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.

A Way to Reduce Healthcare Costs

As policymakers inside the beltway negotiate the future of the American Health Care Act (AHCA), the focus appears to be on who will pay for healthcare, how it will be subsidized and whether the state insurance exchanges will remain viable. The assumption is being made that access to care is the same as access to high quality care, and the driving force for change to the AHCA are these cost issues.

In this changing marketplace, it is imperative that insurers consider the quality of care being provided, in addition to the finances, because medical errors and poor care cost us all in the long run.

There is good news for insurers in this battle of ideologies. Certified Physician Assistants (PA-Cs) deliver on both fronts, providing high-quality care in a cost-effective manner. A 2016 article in the Journal of Clinical Outcomes Management showed no significant difference over 18 months in patient mortality, hospital readmissions, lengths of stay and consults with specialists when care was led by PAs compared with doctors. Additionally, PA-Cs can help meet the new and still confusing performance metrics designated by the Centers for Medicare and Medicaid services, such as the new Medicare Access and CHIP Reauthorization Act (MACRA).

For these reasons, it is important that insurers and all healthcare stakeholders understand the role and qualifications of Certified PAs in healthcare today, including: education and commitment to lifelong learning; rigorous certification; how PAs are compensated and reimbursed; and the demographics and distribution of PAs around the U.S.

These insights will help insurers understand how PA-Cs can contribute to improved cost management and patient satisfaction metrics while meeting patient needs and regulatory demands.

First, consider the credentials of Certified PAs.

Certified PAs are prepared and proven to meet the needs of patients today through a combination of a graduate level education and a rigorous certification and certification maintenance process.

PA-Cs are educated in the medical model. Like physicians, they maintain certification at the highest level in healthcare. They must earn substantial continuing medical education (CME) credits every two years and sit for a proctored exam that covers general medical knowledge every 10 years to remain certified.

Certification is a hotly debated topic in healthcare today. There is an anti-maintenance of certification (MOC) movement — a belief that initial assessment by exam after graduating from school is sufficient and maintenance of certification should be through CME only.

See also: What Physicians Say on Workers’ Comp  

Periodic assessment helps to ensure that PAs maintain and objectively demonstrate a baseline fund of knowledge that is essential for practice across the health care spectrum. The combination of substantive, relevant CME and periodic assessments ensure that PA-Cs maintain relevant knowledge throughout their careers.

The National Commission on Certification of Physician Assistants (NCCPA) believes this combined approach reinforces the public trust and assures employers and payers that PA-Cs provide the safe, quality care patients should expect and demand.

Who we are; where we practice

NCCPA has the most comprehensive source of workforce data for the PA profession, with input from 94% of the nation’s PA-Cs. From that, we publish four reports annually detailing statistics on: all Certified PAs; those in 22 specialties; PA demographics by state; and on those PAs who were newly certified in the previous year. Here are some key findings:

  • More than 70% of Certified PAs now practice in specialties outside primary care. There are 103 Certified PAs for every 1,000 physicians in the U.S., with notably higher ratios in surgical subspecialties, emergency medicine and dermatology.
  • The median age of Certified PAs is only 38, so they are not nearing retirement age like many physicians. Only 0.6% planned to retire in 2016.
  • The states with the largest number of PAs are New York, California, Texas, Pennsylvania and Florida. However, three of the top five states with the largest number of PAs per capita are Alaska, South Dakota and Montana, indicating that Certified PAs often fill the void for healthcare in rural areas.
  • Certified PAs make an average salary of more than $104,000, which is less than half of a physician, making them an affordable provider who can still meet the clear majority of patient needs.

PA-Cs are everywhere, in every specialty, clinical setting and state, with services running the gamut from providing core medical services to performing surgical procedures, to assisting in complex surgical procedures.

  • Almost 19% practice in surgical specialties like cardiovascular and thoracic surgery and orthopedic surgery, handling pre-ops and post-ops but also performing procedures like vein harvesting, central IV-line placement, lumbar punctures and fracture reduction.
  • More than 14% are employed in emergency medicine, working in every area from fast track to admitting patients to the hospital or referring for follow up to a community physician.
  • Almost 1.5% practice in psychiatry, managing patients with the gamut of mental health issues from anxiety to schizophrenia, providing continuity of care for patients on long-term medications and helping to detoxify substance abuse patients and referring for counseling.
  • They manage complex patients with multiple co-morbidities and conditions such as diabetes, HIV and hypertension.
  • Certified PAs are also improving efficiency in work places across the country, working on task forces to develop telemedicine programs, observation units to reduce hospital admissions and processes to increase patient satisfaction.

How PAs are paid and reimbursed

Most PAs are employed and salaried providers. In some states, Certified PAs can own their own business, with a physician as medical director.

Medicare pays PAs at 85% of the physician fee to perform the same services. Medicare increases that to 100% if the service is “incident to” the physician’s care. To be considered as “incident to,” the physician must perform the full first visit, services must be rendered in the office/clinic and a physician must be onsite when PAs treat the patient. Hospitals that employ PAs bill for their clinical services under Medicare Part B.

Most often, private insurers follow Medicare guidelines. Thus, Certified PAs represent immediate cost-savings for insurers.

See also: Medicare Implements Value-Based Purchasing  

Q. What do MACRA, HCHAPS, PCMH, ACO, ACA have in common?
A. Value-based care!

Whether the ACA is changed or repealed, the demand for quality and cost-effective care will not lessen. Every healthcare model is seeking data to back up its promises. As patients, we all want to see metrics that can be replicated so that we know we are getting the best value care for our money. Solutions need to be refined in everything from clinical setting to workflows. However, as in any business, staff is one of the most significant factors in success—what they do and how much it costs for them to do it.

As Congress debates how we pay for this coverage, and wrangles about the details of exchanges and subsidies, insurers are being asked to reduce the cost of healthcare insurance, while at the same time being true to stakeholders, be they public or private, by remaining profitable.

The simple answer is to reduce the cost of medical care. Employing Certified PAs is one way employers can do that. Knowing they maintain certification at the highest standards in healthcare provides a level of assurance that PAs are a quality solution, not just a lower-cost solution. That should boost confidence in reimbursing Certified PAs who, at the end of the day, are a bargain for payers.

Is U.S. Healthcare Ready for ‘All Payer’?

Congress is debating the American Health Care Act, the first of three steps in Republicans’ march toward repealing and replacing the Affordable Care Act. Things are not going smoothly. GOP conservatives, which have considerable clout in the House of Representatives, want the bill to repeal more and replace less. More moderate Republican Senators, of which there are enough to block any legislation, argue the legislation goes too far in some respects. Attempts to mollify one side hardens opposition on the other. And so far, no real effort has been made to entice Democrats to do more than watch Republicans fight one another.

It’s possible President Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell can corral enough votes in each chamber to push the AHCA through Congress. It’s possible, but I’m skeptical. And what if they can’t?

See also: What Trump Wants to Do on ACA  

Well, they could do nothing, leaving enough uncertainty lying about that the individual market, at least, collapses. That could make 2018 a tough election year for Republicans. Or they could offer AHCA version 2.0 and hope for better results. Wishful thinking is a great pastime but hardly a vehicle for making public policy.

All of which argues for doing something outside the proverbial box. Maybe Congress could even address the core problem facing America’s healthcare system: the cost of medical care. What might that look like? One option would be to look at an idea that’s been around since the 1990s, if not longer: an all payer system. It would certainly be an interesting debate.

To oversimplify, under an all payer system, providers and payers (usually the government) establish a price for each medical treatment and service. Every provider accepts this rate as payment in full, and every payer (government, private insurance, self-funded plans and individuals) pays this rate.

As noted by The Hill, several states experimented with one version or another of all payer systems in the 1990s, although today only Maryland’s remains. As recently as 2014, academics at Dartmouth proposed using 125% of Medicare reimbursement rates for a national all payer program. Pricing transparency advocates like all payer systems because everyone knows the cost of care – the ultimate transparency. And this system eliminates the wide variance in pricing for identical treatment so prominent today.

A pure all payer system would be difficult to pass, however. Free market Republicans will not accept the government setting the price for all medical care payments. And pharmaceutical companies, doctors, hospitals and other providers are not going to take kindly to having anyone set a one-size-fits-all cost structure. But there are variations on the all payer theme that might make such a system more palatable — and allow for a healthy (and entertaining) debate..

For example, consider an all-payer system in which Medicare reimbursement rates are simply a starting point — the benchmark used by all providers in setting their costs and all payers in determining their reimbursement levels. No more Alice in Wonderland pricing by hospitals and other providers. Each service provider would describe its fees as a multiple of Medicare. Insurers would offer plans that cap reimbursements at different multiples of Medicare. If the doctor’s charges are at a lower or the same multiple as an insurance policy’s, that provider would be fully reimbursed by the carrier, and no charges beyond co-payments, deductibles and co-insurance (if any) would be required of the patient. If the practice has set a higher Medicare multiple than a patient’s policy covers then the patient is liable for the additional cost. The key, however, is that the consumer would know this before incurring the charge. (Which is why emergency care would be treated somewhat differently).

See also: Letter to Congress on Replacing ACA  

An all payer system requires higher cost providers to justify the extra expense. It eliminates the helter skelter of ever-changing networks. Health insurance premiums would reflect reimbursement rates and would correlate with the number of providers whose services would be covered in full.

Conservatives can’t claim all payer systems is a government takeover of healthcare. On the contrary, the only role Medicare plays is providing the baseline for reimbursement … a common language all providers and payers speak. What they do with that baseline is up to them. Liberals won’t like that insurance companies remain in the healthcare system and will object to limiting, as a practical matter, poorer Americans to low reimbursement policies.

Right now, all attention is on the American Health Care Act. That’s as it should be. After all, it’s not dead yet. But, given that there’s a good chance the legislation will crash and burn, there’s no harm in thinking about what could come next. I’m rooting for something that isn’t just a rehash of the 2009 debate, but rather something bolder. An all payer proposal is just one idea, and there are no doubt many better ones.

What’s your favorite?

This article first appeared at the Alan Katz Blog.

Workers’ Compensation Issues to Watch in 2014

Rates Continue to Climb

In most of the U.S., rates for workers’ compensation insurance are continuing to climb, driven by rising medical costs, the low-interest-rate environment and the general unprofitability of the line of business.  This is in spite of the fact that many states have undertaken regulatory reform aimed at controlling medical costs and driving costs out of the system.  Despite significant investment in medical management efforts, workers’ compensation costs are consistently higher than group health costs for the same diagnosis. Why is this? Numerous studies have shown that a small percentage of medical providers are driving a large percentage of the workers’ compensation costs. Implementing treatment guidelines, drug formularies and utilization review protocols is a step in the right direction. However, until regulators find a way to remove abusive medical providers from the workers’ compensation system, high costs will always be a problem. Rather than treating the symptoms, we need to address the causes of rising costs.

The Potential Expiration of TRIPRA

Unless Congress takes action, the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) will expire on Dec. 31, 2014. Carriers are now writing coverage without the backstop of TRIPRA. What does this mean to the workers’ compensation industry? Companies with high employee concentrations in certain cities are already seeing fewer options, with some carriers scaling back their writings to reduce their exposure to a potential terrorism event.  Some carriers are setting policy expiration dates to coincide with the expiration of TRIPRA or are advocating for unilateral mid-term premium increases if TRIPRA is not renewed or is materially modified.  Many workers’ compensation underwriters are pushing for higher rates because of this issue.  If TRIPRA is allowed to expire, companies in certain industries and geographic areas may have no option but to obtain future coverage from their state funds as the commercial marketplace pulls back to avoid the increased risk.  The longer it takes Congress to act, the more pronounced this issue will become.

Impact of the Affordable Health Care Act (AHCA)

There has been much speculation about the potential impact that the ACHA will have on workers’ compensation.  Some feel it will increase leakage from group health to workers’ compensation, while others feel it will have the opposite effect. One thing for certain is that with increased coverage being provided on the group health side, the overall utilization of services will go up. With a finite number of medical providers available, this means it is imperative that workers’ compensation payers identify the providers who deliver the best clinical outcomes for injured workers. The focus on workers’ compensation medical networks in the future will need to shift from fee-for-service discounts to quality of care and best outcomes. This may cost more on a fee-for-service basis, but getting appropriate and timely care will generally lead to faster return-to-work, ensure the proper treatment and ultimately lower costs.

Integrated Disability Management

More employers are realizing that the impact of federal employment laws like the Americans with Disabilities Act (ADA) and the Family Medical Leave Act (FMLA) must be considered on workers’ compensation claims. Companies are also realizing the value of managing non-occupational disability so that valued employees can get back to the workplace and be productive. As a result, companies are requesting that their TPAs develop integrated disability management programs designed to handle both occupational and non-occupational disability in a consistent and effective manner. These integrated disability management programs are the next generation of claims handing and will expand in the future.

State Legislative Issues

Several states that passed significant reform legislation in the last two years are working to implement those reforms. Passing a law is only the first step, as the rules, regulations and implementation of those laws determines if they will achieve their intended purpose. The most significant issues to watch are in California, New York and Oklahoma.

When California passed SB 863 in 2012, the expectation from the state’s legislature was that it would increase benefits to injured workers while lowering costs for employers in the state. While the benefit levels for permanent disability have been increased, the savings components are still a work in progress. Litigation and unanticipated consequences of the bill have resulted in increased complexity and continually rising insurance rates.  For example, a significant component of the intended cost savings was to result from the new Independent Medical Review (IMR) process.  However, in recent months the volume of IMR requests has been many times what was anticipated, preventing the IMR provider from meeting the required turn-around guidelines and adding significant administrative costs to the system.  Based on their analysis of the higher costs, the California WCIRB recommended an 8.7% pure premium increase for 2014. There is currently talk of potential clean-up legislation to go along with the continued efforts at implementation. We will know by the end of the year whether SB 863 will be able to produce the promised cost savings.

New York streamlined its assessment process, resulting in a significant reduction of the assessment rate for most employers. These rates are adjusted annually and have varied significantly in the past few years.  It remains to be seen if these assessment savings will continue into the future.  In addition, New York has been struggling to implement the reforms that were passed in 2007 legislation, and it was 2013 before the last of the regulations were issued for this law. This 2007 bill was another piece of legislation that promised cost savings that have yet to fully materialize.

The big news in Oklahoma is the bill that allowed employers to opt-out of workers’ compensation starting in February 2014. The Oklahoma Supreme Court recently upheld the constitutionality of the legislation, clearing the way for its implementation. However, there have been delays in developing the rules and regulations supporting the opt-out plans, and this has in turned delayed carriers’ development of policies to cover new benefit plans. It appears unlikely that everything will be in place so that employers will be able to opt out beginning in February. In addition, the Oklahoma legislation included significant reforms to the underlying workers’ compensation system, so many employers considering opt-out will wait to see the impact these system changes will have on their workers’ compensation costs before proceeding.

Vendor Consolidation

In the last few years, there has been significant vendor consolidation in the worker’s compensation industry. First on the TPA side, and most recently on the medical management side. Much of this consolidation was driven by private equity investments where the tremendous medical spend in workers’ compensation is seen as an opportunity for a profitable return on investment.

All this consolidation is making buyers of these services uneasy. They question how this consolidation will affect the quality of the services they receive and wonder how their goals of reducing costs align with private equity’s goals of increasing revenues. These are legitimate concerns, and it is imperative that buyers remain vigilant concerning vendor partners.


Despite the huge amount of premium, exposure and claims data produced by the workers’ compensation industry, many complain about the lack of actionable information. Dashboards and many other analytic tools do a nice job pulling data together in one place, but ultimately the data is only as good as what one does with it. As an industry, we will see a continued focus on the use of more meaningful analytics that can assist in identifying savings opportunities, formulating action plans and measuring the impact of change.

Assessing Return on Investment for Medical Cost Management Efforts

In the last few years, the money spent on medical management has been steadily increasing.  Programs including bill review, utilization review and nurse case management are all necessary components of any successful workers’ compensation program. However, it is important that these programs are constantly monitored to ensure they are being utilized appropriately. If left unchecked, these “cost-saving” issues can actually become cost drivers.

Impact of Presumption Laws on Municipal Budgets

In 2013, there were a handful of municipalities that filed for bankruptcy because of large underfunded workers’ compensation and pension obligations. This trend is not only likely to continue, but could get worse. The presumption laws in most states can turn common health conditions like heart disease and cancer into workers’ compensation claims. In California and Nevada, for example, a large number of retired police officers and firefighters are collecting both their pension and the benefits from a workers’ compensation presumption claim. The statute of limitations for linking these diseases to the workplace has been extended to more than 10 years in some jurisdictions. The resulting burden for paying the costs of these benefits in the case of public entities ends up falling on taxpayers.

Medicare Set-Asides

Many felt that the passage of the SMART Act in January 2013 was the end of the battle on Medicare Secondary Payer compliance issues. In fact, this was just the beginning of the fight. Implementation of the SMART Act has been slower than expected and the legislation did nothing to address the huge costs associated with Medical Set-Aside arrangements. The rules and case law associated with Medicare are constantly evolving, and now it appears that these reimbursement rights will be expanded to Medicaid coverage, which would create an entirely new monitoring and compliance area.  This is an issue payers need to remain diligent on.

Please join me on Jan. 15, 2014, for a Marsh-sponsored webinar to discuss these issues and other potential legislative developments to watch in 2014.  Click here to register.