Following the money on injuries?

Doctors are classifying certain injuries as job-related more often in states that have higher workers compensation fee schedules, but reasons other than making more money are often at work.

The Cambridge, Massachusetts-based Workers Compensation Research Institute said in a mid-April report that when workers comp reimbursement rates increased 20% for physician office services, soft-tissue injuries that did not have a straightforward cause, such as a sore back, were classified as work-related 6% more often.

In states with higher fee schedules such as Illinois, where WCRI and other sources say group health pays $1,000 for a knee arthroscopy while workers comp pays almost $4,000, the study concluded that doctors may be classifying cases with a nebulous cause as work-related “to receive a higher reimbursement.”

“It seems that financial incentives matter in the doctor's decision,” said Olesya Fomenko, an economist at the Cambridge, Massachusetts-based WCRI and co-author of the report. “When the causation is not so clear for lower back pain and strains, where it can be work-related or not and it's up to the doctor to decide, we are seeing that the higher the fee schedule levels the higher the number of soft-tissue cases paid by workers compensation.”

According to the WCRI, injuries with more obvious causes, such as broken bones or lacerations, did not show the same case-shifting from group health to comp.

Joe Paduda, principal of Madison, Connecticut-based Health Strategy Associates L.L.C., said he does not believe cases are being shifted from group health to workers comp simply to increase revenue.

“Correlation is not causation,” Mr. Paduda said. “Just because more of the soft-tissue injuries are allocated to workers comp in the higher-fee-schedule states doesn't mean these cases should not be workers comp cases.”

However, others said there is reason to believe monetary gain can be a deciding factor in cases where the cause is difficult to determine.

Financial incentives for the doctor and the patient point to defaulting to the workers compensation system, said Michael Gavin, Duluth, Georgia-based president of medical cost management company Prium.

“If the patient doesn't have to pay and the doctor gets paid more, everybody wins,” Mr. Gavin said.

One physician agrees that financial incentives exist.

“I have heard feedback from patients about their having additional financial responsibilities relating to their medical care, such as the higher cost of out-of-pocket payments,” said Dr. Robert Hall, Westerville, Ohio-based medical director for the workers compensation division of Optum Inc.

“It's not the right thing to do — switching a case to workers comp purely on the basis of financial reasons — but from the physician's side, I would say it could happen,” Dr. Hall said.

He said nonfinancial reasons, such as a patient asking to transfer their case to workers comp to receive care from a doctor outside their group health network, could also result in the change.

In Minnesota, according to the WRCI report, prices for soft-tissue surgeries in workers comp and group health are closely aligned and there has been no increase in moving cases to comp.

“Having fee schedules in place has played a large role in controlling these costs,” said Lisa Wichterman, St. Paul-based medical policy specialist at the Minnesota Department of Labor and Industry.

Brian Allen, Westerville-based vice president of government affairs for Optum's workers comp division, said medical expenses in workers comp should not necessarily be compared with group health prices because the two systems are very different.

States in the study with the highest workers' comp prices, such as Wisconsin, do not have a fee schedule.

“The business community and others continue to try to make the case for some sort of medical cost containment, as Wisconsin has the highest medical cost and highest medical inflation in workers compensation, but right now the Legislature does not have an appetite for a government-established fee schedule,” said Andy Franken, president of the Madison, Wisconsin-based nonprofit Wisconsin Insurance Alliance.

Mr. Allen said fee schedules, which are in place in 43 states, can be incentives for good and bad behavior alike.

“If a fee schedule is too low for certain procedures, doctors may skip those and go to a more expensive procedure or they might do extra procedures,” he said.

“An area to focus on that goes beyond this study is how we can more scientifically determine causation and (the injury's) relationship to work, as opposed to categorizing the injury based on what the patient says and what the physician selects based on the provided information,” Dr. Hall said.