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BOSTON — States with a significant number of workers in capitated health plans are likely to see medical costs shifting from group health plans to workers compensation insurance, according to preliminary data from the Workers Compensation Research Institute.
Group health plans with capitation arrangements, such as health maintenance organizations, pay medical providers a set annual fee per plan member, regardless of visits. That differs from fee-per-service plans, in which providers are paid for each procedure or visit.
Speaking Thursday at WCRI’s conference in Boston, Richard Victor, executive director of Cambridge, Massachusetts-based WCRI, said workers comp plans pay providers in addition to the fees they receive under capitated plans, since those don’t cover work-related injuries. But injuries that don’t qualify for comp limit provider payments to what they receive under a capitated group health plan.
Therefore, he said capitation encourages providers to seek workers comp payments rather than payments only from capitated health plans.
“If it's work-related, then the provider gets the same fee for service as what's paid by workers comp,” Mr. Victor said. “If it's not work-related, the provider's already been prepaid for any care that they give. Potentially, that's a pretty powerful incentive. If I call it ‘X,’ I get paid. If I call it ‘Y,’ I don't” get any additional payment.
He noted the determination of whether an injury is work-related often is left to the a worker’s treating physician, such whether back or joint pain is caused by a combination of a person’s job and factors outside the workplace.
“I’m not talking about fraud because a lot of these conditions are … inherently ambiguous,” Mr. Victor said of WCRI’s research.
Accountable care organizations — networks of doctors and hospitals established under federal health care reform to meet improve patient care while lowering health care costs — are shifting toward capitation payment methods, Mr. Victor said. Therefore, he said providers in ACOs may be incentivized to shift patient claims from group health plans to workers comp plans that pay more for certain conditions, such as soft-tissue injuries.
That trend could increase as more ACOs come into existence, Mr. Victor said.
States with more than 25% of workers covered under capitated group health plans — such as California, New York, Pennsylvania, Michigan and Massachusetts — also are more likely to see cost-shifting to workers comp because medical providers in those states are more well-versed about whether workers comp or group health plans pay more, Mr. Victor said.
Private employers in Ohio will see a 10.8% workers compensation rate decrease as of July 1, the Ohio Bureau of Workers' Compensation said.