Tag Archives: group health

How Should Workers’ Compensation Evolve?

Workers’ compensation has been around for more than 100 years. It was developed as a grand bargain between labor and employers to ensure that injured workers received appropriate medical care and wage-loss benefits while employers received protections against tort lawsuits arising from workplace injuries.

The workplace is vastly different than it was when workers’ compensation was conceived. Workers’ compensation has also evolved in some ways, but in other ways it has not kept pace with changing workplace demographics and injury exposures. There are discussions in our industry around whether workers’ compensation is still meeting the needs of both employers and injured workers. Even the U.S. Department of Labor and OSHA have recently questioned the adequacy of workers’ compensation benefits. Some employers are actively pushing for an alternative option to workers’ compensation because they feel workers’ compensation no longer provides suitable protection for employers and injured workers.

As a person who has been very actively engaged in the workers’ compensation industry, I see a variety of issues within the current system and I hear complaints from a variety of stakeholders about it. Industry groups are starting to engage in discussion about the future of workers’ compensation. With that as a backdrop, here are my thoughts around how workers’ compensation needs to evolve.

Change Medical Delivery Model

The single biggest flaw in workers’ compensation is the current medical delivery model. Medical costs keep rising, and outcomes are often poor. This is because, historically, the medical delivery model in workers’ compensation has been focused on two things: discounts and conflict.

See Also: Workers’ Comp Market Trends

Too often, medical treatment in workers’ compensation claims is used as a weapon for secondary gain. Certain attorneys consistently refer injured workers to certain physicians who extend disability, perform unnecessary treatment and ultimately produce poor medical outcomes for the injured workers. These physicians producing the poor outcomes are well-known by the payers, yet they are allowed to continue to ruin the lives of injured workers so that the settlement will be larger and the attorney fee higher. This is just wrong.

The reimbursement model has prominently focused on who will deliver the cheapest care, not necessarily the best care. In fact, sometimes the best physicians refuse to treat workers’ compensation patients because of the low reimbursement rates. In addition, unnecessary utilization review delays workers from receiving care. Bills are not submitted at fee schedule rates, which necessitates spending money on bill review services to ensure that the appropriate amount is paid. There is a lot of money wasted on the bill churn that would be better spent on medical care.

We need to start over completely on the medical delivery model and look at what is happening in group health and Medicare for guidance. Under those models, insureds are not free to treat with any provider they choose; they must treat with someone “in network.” Certain treatments must be pre-authorized, and prescription drugs must be on an approved formulary to be covered. Both group health and Medicare are now scoring medical providers to see which of them produce the best outcomes. Those that consistently produce poor outcomes are excluded from coverage. Everyone with medical insurance, including Medicare, has operated under these rules for years. Yet, when the same rules are proposed under workers’ compensation, there is outrage that the injured worker would be denied the right to treat as he wishes.

The industry and regulator needs to focus on identifying which medical providers produce the best outcomes for injured workers and also which providers follow established treatment guidelines. These physicians, and only these physicians, need to be treating workers’ compensation patients. Let’s eliminate the “plaintiff and defense” doctor mentality and just have good doctors treating our injured workers. Once we have identified those physicians, we need to get out of their way and let them treat the patient. There is no need for utilization review when an approved physician is following treatment guidelines and dispensing off the pharmacy formulary.

Let’s change the focus from conflict and discounts to better outcomes and expedited treatment. These won’t be easy changes to make, but the result will be better outcomes for injured workers and lower costs for employers. Win-Win!

Reduce Bureaucracy

The administrative bureaucracy around workers’ compensation is complex, time-consuming and extremely costly. It also does little to enhance the underlying purpose of the workers’ compensation system, which is to deliver benefits to injured workers and return them to the workplace in a timely manner. States create a never-ending mountain of forms that must be filed and data that must be reported. These requirements vary by state, forcing carriers and TPAs to comply with more than 50 different sets of rules and regulations.

Also, why are penalties for compliance errors not based on a pattern of conduct instead of being issued with every violation? If a payer is 99%-compliant across thousands of claims, it is making every effort to comply. But mistakes happen when humans are involved, so perfection is not obtainable. The focus of compliance efforts should be ensuring that every effort is being made to comply, not simply generating revenue from every error.

State regulators need to take a critical look at their administrative requirements with a focus on increasing efficiency, reducing redundancy and lowering the costs to both payers and the states themselves.

Tighten Thresholds of Compensability and Eliminate Presumptions

The threshold for something to be a compensable workers’ compensation claim varies from 1% (aggravating condition) to more than 50% (major cause). Workers’ compensation benefits should be reserved for injuries and diseases caused by the workplace environment, not a simple aggravation. In addition, the normal human aging process should not produce a compensable workers’ compensation claim under the theory of “repetitive trauma.” There should not be workers’ compensation benefits for simply standing, walking, bending and other basic activities related to daily living.

States should adopt a consistent threshold that the work injury is the major cause of the disabling condition. If work is not more than 50% responsible for the condition, then it belongs under group health.

While we are at it, presumptions for certain conditions and occupations should be eliminated. These laws are based more on politics than science, and they add significant unnecessary costs to public entity employers, which, in turn, increases the tax burden on every person in this country. They also fly in the face of equal protection under the law by creating a preferred class of injured workers. If the facts of the case and the science support a compensable claim, then it should be compensable. However, a firefighter who has smoked two packs of cigarettes a day for 20 years should not automatically receive workers’ compensation benefits for lung cancer because of a presumption law.

Eliminate Permanent Partial Disability and Focus on Return to Work

The human body is a remarkable machine because it has the ability to heal itself. In addition, medical treatment is specifically meant to restore function. Most injuries do not result in some type of permanent impairment, yet most states have a permanent partial disability benefit. Why? This is how workers’ compensation attorneys get paid. Permanent partial disability benefits represent a tort element injected into this no-fault benefit delivery system, and this is the leading cause of litigation in workers’ compensation.

The goal of workers’ compensation is to return injured workers to employment. If they can go back to their regular earnings, then the goal is accomplished. If they cannot, then there should be a wage-loss benefit. This gives incentive to employers to return injured workers’ to employment, and it would significantly reduce litigation and conflict in the system.

Eliminate Waiting Periods

The suggestions I have provided thus far would all reduce workers’ compensation costs. The savings should allow us to increase certain benefits without increasing employer costs. Let’s start eliminating the waiting period. Why should someone have to go without pay for three to seven days because they suffered a workplace injury? This creates an unnecessary financial hardship on injured workers. You don’t have a waiting period when taking sick days from work, so why is there a waiting period for workers’ compensation benefits? Yes, a change would result in more indemnity claims, but we are talking small dollars in additional benefits when compared with the benefit this would provide to injured workers by reducing the financial strain caused by a workplace injury.

Eliminate Caps on Indemnity Benefits

All states cap the weekly indemnity benefits that injured workers can receive. These caps range from a high of $1,628 (Iowa) to a low of $469 (Mississippi). In 34 states, the benefit cap is less than $1,000/week.

Think about that for a moment. In most states, if you are earning more than $78,000 per year, you will be subject to the benefit cap. This is not something that only affects the top 1% of the workforce. This cap affects skilled trade workers, factory workers, teachers, healthcare workers, municipal employees, police, firefighters and a variety of others. It is truly a penalty on the middle class. For workers subject to the cap, their workers’ compensation benefits will be significantly less than their normal wages. How many of us could avoid financial ruin if our income was suddenly reduced by a significant percentage?

See Also: Why Mental Health Matters in Work Comp

Workers’ compensation benefits are designed to be a backstop for those unfortunate enough to suffer a workplace injury. Having a workers’ compensation claim should not mean someone suffers a significant financial hardship simply because they earn a decent living. Eliminating the benefit cap would solve this problem.

Define and Cover Known Occupational Diseases

One area where workers’ compensation really needs to evolve is the coverage of occupational diseases. This concept was not contemplated when workers’ compensation statutes were drafted because the focus was on sudden traumatic injuries, but we know that occupational diseases are a reality. Science tells us that there are certain conditions that may be caused by workplace exposures. These conditions can take years to manifest.

The industry and regulators need to work together to identify those diseases that are caused by the work environment and ensure that benefits are available to address them. This means eliminating statutes of limitations that are shorter than the latency period for the condition to develop.

I refer back to my comments on thresholds of compensability. If the workplace exposure is more than 50% responsible for the condition, then it should be covered. If not, then it should be paid under group health.

Reduce Inconsistency Between States

Workers’ compensation is a state-based system, so there will always be variations between the states. However, there are some areas where the inconsistency increases costs and does not treat all workers equally.

If states could agree on a common data template for carrier reporting, it would significantly reduce the administrative costs associated with gathering and reporting data. All the states don’t need to use the same data elements, but they could accept the feed and simply ignore what they did not need. There have been efforts in this area for years with no resolution. In addition, a common workplace poster for coverage and common forms would also significantly reduce the costs associated with compliance in these areas. As mentioned previously, the bureaucracy of workers’ compensation adds unnecessary cost to the system. We should be able to make some small changes to common templates to reduce costs and increase efficiency.

Another area of inconsistency is the simple definition of who is an employee subject to workers’ compensation coverage. If two people work for the same company performing the same job in different states, one should not be subject to workers’ compensation while the other is not, yet this occurs. States vary on their definitions of employees vs. independent contractors. Some states exclude farm workers and domestic servants from workers’ compensation, while others mandate coverage for those workers. Whether or not you are eligible for workers’ compensation should not vary based on your state of employment.

Ensure That Permanent Total and Death Benefits Are Adequate

Having a family’s breadwinner die or become permanently totally disabled (PTD) is both emotionally and financially devastating. Workers’ compensation benefits are supposed to help reduce the financial impact. Yet there are four states that have hard caps on all indemnity benefits (DC, MS, IN, SC). If you are permanently totally disabled in those states, benefits only pay for 450-500 weeks. That means, by design, those states shift PTD claims to the social welfare system.

Things are even worse with death benefits. There are 19 states that cap death benefits, including the four listed above. In Georgia and Florida, death benefits are capped at only $150,000. Some would argue that there may be life insurance to provide additional funds, but there is certainly no guarantee of that.

The most devastating injuries should not result in even more devastating financial consequences for the injured worker and the family.

Adopt an Advocacy-Based Claims Model

In many ways, workers’ compensation is a system based on conflict. We have “adjusters” who “investigate” your claim. A very small percentage of claims are ultimately denied as not being compensable, yet the claims review process is based on those claims rather than the vast majority, which resolve without any issues. Businesses stress the importance of customer service, and most employers agree that the workforce is the most valuable asset of any business. However, many businesses often fail to treat their own injured employees with the same consideration they give to their customers. That customer service focus needs to be extended not just to customers but to employees.

In discussions around creating an “Advocacy-Based Claims Model,” employers adopting this approach are seeing less litigation, lower costs and greater employee satisfaction. Rather than just denying a claim and inviting litigation, workers are told about benefit options that are available when workers’ compensation is not appropriate. Changing this model is about changing attitudes, the language we use to communicate and even the workflow. It can be done.

Workers’ compensation is still a valuable protection for both injured workers and employers. However, the time has come for it to evolve to better reflect the realities of the current workforce, risks present in the workplace, and advances in science and medicine. If workers’ compensation is to remain relevant for another 100 years, it needs to keep up with changes in society.

healthcare

Future of Work Comp Healthcare Delivery

Reform is changing healthcare delivery models, but there is a large gap between the healthcare related to workers’ compensation and the group health approach.

As a result of healthcare reform, the industry has experienced significant consolidation of health systems and medical practices, with an added emphasis on patients as consumers of healthcare, all as providers continue to evolve. As employers, though, our message is confused.

We tell employees that we have a great healthcare system for them, encourage them to choose the best physician to meet their needs and remind them to get regular checkups. However, if an employee gets injured, we have a separate system with a separate set of doctors and a separate set of rules.

If employers can find better doctors to treat workers, they can improve the quality of the workers’ compensation system. Employers are not going to get better doctors just by paying more; but, if they can identify which doctors are doing a better job and reward them, results improve.

California’s model has been experimenting with the concept of rewarding doctors for providing superior care, which has resulted in significant cost reduction. Great doctors are actually reducing the amount of medical attention required and, overall, workers’ compensation claims costs. As a result of better care and employee satisfaction, litigation costs have also dropped. Quality matters.

With advancements in technology, reimbursement models, a focus on quality and the movement of connected care, health systems across the U.S. are offering accountable care organizations (ACOs) for employer benefit solutions. Many think mergers and consolidation are a bad thing, however, in this consolidated world where health systems have changed, mergers and consolidation are changing “well care” to “sick care.” By taking a holistic approach, you are able to take a patient from wellness to injury care. Workers’ compensation needs to be part of this discussion. If not, we cause an even greater divide.

This holistic approach is not a new concept. In the 1990s, there were three 24-hour care pilot programs that tried this approach and resulted in lowered cost and improved medical control. At the same time, 10 states also mandated 24-hour pilot studies. Employers generally liked the pilot programs, which resulted in benefits such as increased medical control and reduced costs. On the national front today, the National Institute for Occupational Safety and Health (NIOSH) has a total worker health program that considers the total person and the factors that affect the individual’s health. The workers’ compensation system could borrow and apply successful elements from these programs.

When you send an injured worker to the best and brightest, you make the workers and their families feel like you are treating them well. This gets the patient to do what the doctor wants and stops the unfortunate spiral of delays in care. Technology is going to refine this approach even further. Technology will enable patients to get in touch with doctors immediately and will make the worker feel like he was properly cared for. This has the potential to be extremely effective and efficient for the system.

When a connected care system is not in place, the gaps in care are leading to needless disability and extended absence. Technology and telemedicine are essential components of this connected care. Gathering and analyzing health data is also important to drive positive behavior and improve overall quality of care.

The patient base is also more complicated, and that is where finding the great doctor comes into play. Today, if you have a patient with a broken arm, you may, in fact, have a patient with a broken arm and diabetes, which is much more difficult to treat. We need to find these great doctors and find systems for them to work with that operate far more efficiently. Technology is a very big part of that.

The current workers’ compensation system is not set up to reimburse for payments under this new model, including the use of nurse practitioners and physician’s assistants. The system needs to move in this direction. There are simply not enough physicians to see everyone. These healthcare professionals are essential elements of the group system, and the workers’ compensation system could be improved significantly by recognizing the need for these important providers.

Workers’ compensation currently works in silos, and that is an obstacle. The health system ACO model is communicating directly to the employers. As this model becomes adopted, the board room is not seeing the financial benefits just yet. However, when employers decide they want change, change happens. It is just a matter of getting their attention.

Employers are paying attention to the data they receive on the types of health systems. If the data around what is working in group health becomes available to employers, they will evolve.

Holistic care is certainly a trend that is largely becoming a reality. Workers with sedentary lifestyles who become injured on the job bring complicated connections between injury and pre-existing conditions that are hard to separate. It makes sense to treat people as they are—as a whole person. It is very important to try to get all of the systems to work together to treat the employee as one person.

We need a network that drives total employee health, and we can only have that if group health and workers’ compensation can talk to each other. Data is going to drive this evolution. The best-case scenario is if all this wonderful science and data can be put to use to help patients and merge what currently are parallel systems.

These issues were discussed in more details during an Out Front Ideas with Kimberly and Mark webinar, which was broadcast on Sept. 30, 2015. The archived webinar can be viewed here.

Debunking ‘Opt-Out’ Myths (Part 5)

Option programs in Texas and Oklahoma produce substantially less litigation than workers’ compensation systems do, which provides a powerful endorsement for states considering such programs.

A look at litigation for workers’ compensation and option programs must consider three main exposures: (1) claims for employer liability, (2) claims that the law violates the particular state’s constitution and (3) claims for wrongful denial of benefits.

Claims for Employer Liability

Public policymakers have long understood that it is not fair to require employers to pay a high level of statutorily mandated injury benefits and also be exposed to legal liability damage claims regarding the cause of injury. There are several approaches available to state legislators in striking that balance in a workers’ compensation system or an option to workers’ compensation, but each approach must reflect this inverse relationship between the extent of an injury benefit mandate and the extent of employer exposure to liability.

Employer exposure to liability has been almost entirely removed from workers’ compensation systems because of extensive benefit mandates that include medical coverage for life. However, the option to Texas workers’ compensation takes the opposite approach. It has no injury benefit mandates but exposes employers to broad liability for negligence.

That formula will be pursued by few, if any, other state legislatures because of the risk that certain irresponsible employers would provide no injury benefit coverage to their workers. However, the Texas option liability exposure does provide an additional incentive for employers to focus on workplace safety. It also provides employers with an incentive to make a strong commitment to take care of the injured employee’s medical and indemnity needs.

Employer liability exposure under the Texas option is real. There have been more than 80 liability settlements or judgments of $1 million or more. This unlimited risk of liability is ever-present.

However, option programs experience less than half as many disputed claims as the Texas workers’ compensation system (which is widely acknowledged as the one of the best-performing systems in the U.S.). The tiny percentage of disputed option claims is, primarily, because of legal requirements to fully communicate all rights and responsibilities (at program inception and continuing) in language that employees can understand — a requirement that is quite hard to find within any workers’ compensation program.

Option programs are also legally required to use claim procedures that ensure a full and fair review of benefit claims, including access to state and federal courts.

Yet only 1.5% of Texas option claims have any attorney involvement, and less than one in 1,000 liability claims actually go through formal litigation. So, this liability exposure has a positive impact on workplace safety, while still proving to be manageable and fully insurable in a highly competitive option marketplace.

It took more than a decade for the insurance industry and case law development to create the current balance that is delivering injury benefits to more than 95% of Texas workers through either workers’ compensation or option injury benefit plans. The existing Oklahoma option and the proposed Tennessee and South Carolina options all mandate some level of injury benefits and reduce employer exposure to liability to simplify the public policy debate and avoid this long period of industry maturation.

Constitutional Challenges

In existence for more than 100 years, the Texas option has never faced a challenge on constitutional grounds. Texas courts have long respected an employee’s right to work, employer rights to tailor employee compensation and benefits and the legislature’s right to determine an appropriate balance between mandated injury benefits and employer liability exposures.

The Oklahoma Supreme Court has now twice rejected lawsuits challenging the constitutionality of the Oklahoma option in 2013 and 2015. Oklahoma trial lawyers have filed more than a dozen lawsuits at the Oklahoma Supreme Court challenging the constitutionality of the 2013 workers’ compensation reforms. Oklahoma courts may further consider different provisions of the option law, but attorneys from the claimant and defense bar now agree that the Oklahoma Employee Injury Benefit Act is here to stay.

Oklahoma and Texas employers can freely move into and out of the workers’ compensation system at any time. So, even if the Oklahoma option is ever stricken down on constitutionality grounds (as unlikely as that prospect is), the law provides a 90-day grace period for employers to move back into workers’ compensation, without penalty. Similar provisions are in the pending Tennessee and South Carolina legislation.

Claims for Wrongful Denial of Benefits

Day-to-day legal challenges by injured workers regarding their rights to benefit payments are a normal feature of all workers’ compensation systems, and the same is true of option injury benefit systems. It is an unfortunate fact of life that, as with any line of insurance business, not every claim will be handled well. But as we have seen in Oklahoma over the past year and in Texas for more than two decades, dramatically fewer claims are disputed by injured workers under option programs.

Twice as many Texas workers’ compensation claims for benefits are disputed as compared with Texas option claims. This is true even when combining all injury benefit plan disputes and employer liability disputes under the Texas option.

Option opponents love to allege these programs only save money by failing to fully compensate injured workers. But, if this were true, why do we see fewer disputes in option programs?

Option program savings are achieved through more employee accountability for injury reporting, earlier diagnosis, persistent medical care from the best providers and more efficient resolution of fewer disputes. Option programs help ensure that employers and injured workers are communicating, engaged at the table (with or without legal counsel) and working together for better medical outcomes and return-to-work. This model must be contrasted with employers and injured workers routinely fighting through the complexity contained in thousands of pages of workers’ compensation statutes, regulations and case law that necessitate attorney involvement for basic system navigation.

A large cadre of workers’ compensation claimants and lawyers can be found in the hallways and hearing rooms of the Oklahoma and other state workers’ compensation commissions and courts on any given day. But there have been few day-to-day Oklahoma option benefit challenges. Oklahoma option programs now cover more than 22,000 workers, and almost every claim that has arisen over the past year has been fairly and efficiently resolved through the injury benefit plan’s claim procedures — essentially the same claim procedures that have applied to private employer group health and retirement plans across the U.S. for more than 40 years.

Over the span of 26 years in Texas and the past year in Oklahoma, not one state or federal employee has ever been hired to specialize in the oversight or administration of the approximately 50,000 option injury program claims that are successfully resolved every year. In contrast, tens of millions in taxpayer dollars are spent in many states every year to oversee and administer day-to-day workers’ compensation claims.

As further testimony to employee appreciation for the full disclosure of their rights and responsibilities under option injury benefit plans and the customer service they receive, not a single workforce in the past 26 years has organized a union as a result of the employer electing an option to workers’ compensation in Texas or Oklahoma. For workforces that are already unionized, their members and leadership appreciate the fact that option programs routinely pay a higher percentage of disability benefits, with no waiting period and no (or a higher) weekly dollar maximum.

Plus, disability benefits are paid on the employer’s normal payroll system, which allows employers and injured workers to seamlessly continue deductions for group health, retirement, child support and union dues. Successful Texas option programs have been in place for many, many years that cover textile, communications, food and commercial workers, teamsters and other collective bargaining units.

Conclusion

With liability exposures clarified and injured workers clearly more satisfied and getting better, faster under option programs in Texas and Oklahoma, legislators and employers in other states no longer need to “wait and see.” Single-digit annual cost savings can still be achieved through traditional workers’ compensation reforms, but option-qualified employers are seeing strong, double-digit cost reductions. Option programs support tremendous productivity, reinvestment and economic development gains for injured workers, employers and communities.

So, in spite of rhetoric from trial lawyers trying to survive and from their allies in the workers’ compensation insurance industry who fear free-market competition, there is no reason why workers’ compensation option legislation and program implementation should not be pursued by state legislators and employers as fast as their other priorities permit.

Why Is Workers’ Comp Managed Care Hard?

There are many reasons why workers’ compensation managed care is so difficult, ranging from general economic cost pressures to the regulatory complexities faced by many large employers with multi-state work locations. Issues such as the ability to direct medical care, fee schedules, dispute resolution and the use of treatment protocols and provider networks vary from state to state.

Workers’ comp medical costs have continued to outpace overall medical inflation for years. Twenty years ago, the typical ratio was 60/40 indemnity costs (lost-wages benefits) to medical costs. Today, that ratio has reversed.

Furthermore, workers’ comp has always been susceptible to considerable cost-shifting both by injured workers and medical providers. Many injured workers without health insurance or with limited coverage have been suspected of submitting claims under workers comp to receive 100% “first dollar” coverage with no co-pays or deductibles. This is often known as the “Monday Morning Syndrome” — weekend injuries from recreational activities get reported first thing Monday morning as “work-related.” The support for this theory is that for years it was documented that the No. 1 time of reported injuries is between 9 and 10 Monday morning. In addition, if an injury or illness is reported as work-related the employee may be entitled to lost-wage replacement benefits, which results in a double incentive.

Medical providers also historically have had an incentive to shift costs to workers’ comp. The best example are HMOs financed by pre-paid capitated rates for group health benefits. Work-related injuries are not included in group health plan coverage, allowing HMOs to bill additional charges on a fee-for-service basis. My former HMO had a large sign at the registration desk that read, “Please let us know if your medical care is work-related.”

I was once hired by a major defense contractor during a competitive bid process and was told that all the other consultants had recommended it run its workers’ comp program through its HMOs. My response was, “That is the last thing you want to do.” The risk manager had a big smile on his face.

Many people in the industry were hoping that the ACA and the goal of universal coverage would eliminate the incentive for cost-shifting in workers’ comp. In theory, that may be true. In reality, the ACA may have limited impact or, worse, actually create more incentives for cost-shifting.

The ACA has no direct impact because the various federal mandates for health insurance do not apply to workers’ comp laws. Unlike Clinton-era health reform efforts, the ACA did not attempt to roll workers’ comp into “one big program.”

The ACA may exacerbate cost-shifting if health coverage costs will rise significantly for both employers and employees, which is widely predicted. The ACA premium rating factors virtually eliminate experience rating in favor of community rating for small employers, which helps pay for the added costs and mandated benefits. This will significantly drive up costs for many employers, with estimates as high as 50% above normal yearly premium increases.

Employees are also faced with the prospect of narrower networks and increased incentive to cost-shift, including the growing trend of consumer-driven health plans with high deductibles and other out-of-pocket costs.

Medical providers under intense cost pressures under the ACA may very well continue to cost-shift to the state workers’ compensation systems and “first dollar” coverage to increase revenues. I fear that the high hopes that the ACA will help eliminate cost-shifting may go the way of “if you like your current health plan you can keep it.”

One prominent proponent of the ACA just predicted that 80% of employers will actually eliminate company-paid health benefits by 2018 in favor of directing employees to the state exchanges because paying the $2,000 fine under the ACA for not providing health coverage will be cheaper than providing coverage.

Workers’ compensation managed care is far more complex than managed care in group health benefits for many reasons, including; 50 different state laws and jurisdictional requirements, cost-shifting, fraud and abuse, overutilization of unnecessary or even harmful health services, excessive litigation and friction costs, historical animosities between labor and management, bureaucratic state agencies and an insurance industry and claim administrators who get a grade of C+ from many industry analysts.

If employers think the answers in containing workers’ comp medical costs are in Washington, D.C., or the various state capitals in which they operate, they need to think again. The answer is in the mirror. Many employers are still searching for the cheapest claims administrator and not the best. Remember that “you get what you pay for.”

The same goes for the overwhelming popular use of PPO “discount arrangements.” If employers think they are saving money by looking for the cheapest doctor in town they couldn’t be more misguided. The treating physician plays a key role in diagnosis and treatment, helps determine causation, degree of impairment and the length of disability and return-to-work. Family physicians and other primary care providers are rarely trained in occupational medicine or workers’ comp laws and requirements and are notorious for granting indiscriminate time off work.

Employers must take a much more active role and provide the best and most appropriate medical care for sick and injured workers from the moment of injury or illness and establish better real-time communications between injured workers, medical providers, work supervisors and insurance companies and claims administrators.

Unfortunately, there is no magic bullet. But there is a rule of thumb: Do not even discuss medical cost containment with outside vendors or consultants who recommend broad-based group health networks and strategies. They simply do not apply to workers’ comp and will do nothing but hurt an employer’s ability to address the real cost drivers and complexities of state workers’ comp laws, requirements and systems.