Tag Archives: reimbursment

Shifting ‘Healthcare’ to ‘Well Care’

New York City has been a leader in the future of healthcare. Listing calories on menus, banning soda sales in sizes larger than 16 ounces and now requiring a designation on menus for any items with more than 2,300 mg of sodium (or a teaspoon of salt) are, if you haven’t figured it out, great ideas. While they seem a bit big brother-ish, I applaud the intent.

Today’s healthcare is a losing battle. Incentives are completely misaligned. Providers get paid for dispensing care, and we keep introducing better — and more expensive — solutions that cure health conditions that inevitably develop as we age.

Today’s usage of the word “healthcare” is “care for the sick.” The only way we are going to solve our cost crisis is to change healthcare to mean “well care.”

By aligning incentives to encourage well care, the system will be a lot less frictional. So, how would this work? The HMOs of the 1980s and 1990s had it right. Provider reimbursement rates would be based in part on compliance by their patients. And providers would be free to decline to treat patients who, because of lifestyle choices, would affect their compensation.

Public awareness and support of this new well care normal can be tied to affordability, and I would envision a new class of coverage developing for those who opt in to a well care lifestyle. Accountability would be directly tied to affordability and also to provider choice. Seemingly insurmountable issues call for creative solutions. We need to change course now.

Obamacare Expands Into Workers’ Comp

The Affordable Care Act (ACA) was created to expand healthcare coverage. Unfortunately, the act has overstepped its bounds and will dip into the workers’ compensation coffers by requiring mandatory reporting for Medicaid beneficiaries.

Medicaid originated in 1965 to cover low-income people with children who had disabilities. State and federal governments fund Medicaid, with the state being the primary administrator. Each state receives direction for the program from the federal government, but eligibility for the program is based on income and assets.

Now the new twist. As of Oct. 1, 2016, state Medicaid programs will be able to recover all of the proceeds from a settlement that were expended on a beneficiary’s behalf. Medicaid will be able to attach a beneficiary’s third-party liability settlement (including workers’ compensation) for the entire amount of the beneficiary’s award – not just the amount allocated to medical expenses. This means funds intended to compensate beneficiaries for pain and suffering, lost wages or any damages other than medical expenses could be subject to the reach of state Medicaid agencies seeking recovery.

This will affect many employers because adoption of ACA has afforded broader coverage under state Medicaid programs, which now include individuals within 133% of the federal poverty level (roughly $32,252.50 for a family of four in 2015) and under the age of 65 years. Medicaid now covers a greater percentage of the workforce.

Since the inception of the Secondary Payer Act (MSP), the primary focus for Centers for Medicare and Medicaid Services (CMS) has been on Medicare reimbursement, primarily because there was a lack of federal direction to the states to recognize Medicaid’s rights and because, before ACA, the majority of Medicaid recipients were unemployed. The lack of recovery process has placed a tremendous burden on state Medicaid programs, because many of them are paying for treatment for individuals who are now covered by workers’ compensation. Medicaid needs to be reimbursed for these expenditures, because voluntary reimbursement has not been successful, resulting in many state programs experiencing insolvency.

The federal laws regarding the rights and responsibilities of recovery from parties in injury cases such as workers’ compensation had to change. These changes translate into digging deeper into an employer’s pockets and taking away more control from the employer.

The National Conference of Insurance Legislators (NCOIL) is developing a model for legislation to assist in recovery efforts. If adopted, this legislation would apply to all workers’ compensation and personal injury claims for medical payments coverage and third party payments for bodily injury from insurers and self-funded primary plans. Rhode Island, West Virginia, Vermont and Kentucky are already exploring “intercept” programs to help comply with the mandatory reporting requirements. Employers that operate in many jurisdictions may have to navigate many different programs as each has distinct reporting and repayment provisions.

Workers’ compensation was never intended to be part of Medicaid. It is only because of the expanded benefit rights from ACA that more employed individuals are Medicaid recipients. Now, not only do employers have to be concerned with MSP rights for Medicare, but they also have to be concerned with Medicaid. While Medicare is a standard set of federal rules, Medicaid will vary from state to state, so compliance is not consistent.

Employees and carriers alike have to be concerned that any settlement arising out of a work-related injury could be subject to “interception” on behalf of the state Medicaid program. No winners here.

While there is no escaping the law, employers can minimize problems by ensuring that they only accept claims that arise out of the course and scope of employment (AOECOE). If an injury did not occur at work or if work did not exacerbate a condition, then it is not a work-related injury and is outside the scope of the Medicare and Medicaid Secondary Payer Acts.

The EFA-STM Program, a book-end solution for the diagnosis and management of soft tissue injuries, has proven effective in helping all stakeholders – employers, physicians and employees – by helping deliver better care for the work-related injury and identifying whether there is a change in condition; i.e. is it work related or not? The program not only is of benefit for the reduction of workers’ compensation claims, it is instrumental in helping all stakeholders navigate the Secondary Payer Acts.

Please join us for the Emerging Trends in Workers’ Compensation Summit in Carlsbad, CA, on Jan. 28, 2016. To get the special ITL rate of $175, use this promotional code: EMERGE2016.