Insight, analysis & opinion from Joe Paduda

< Back to Home

Feb
19

Why is workers comp reimbursement based on Medicare?

Many states have physician fee schedules for workers comp, and most of those are based on Medicare.
That makes no sense.
Medicare covers all the health conditions and maladies encountered by elderly and disabled folks – from breast cancer to cataracts, from dementia to diverticulitis. There is little to no concern for the patient’s ability to ‘return to work’; few are actually working.
In contrast, most of the working population is not old, and the conditions are overwhelmingly musculoskeletal, and returning that claimant to functionality is critical. There is lots of paperwork to fill out, return to work scripts to write, adjusters to talk with, job descriptions to review, and employers to appease, all while treating an injury and dealing with a worker who may/may not want to return to their job.
Sure, many states pay providers a slight premium over Medicare, but that premium doesn’t even offset the already low medicare rate, much less adequately compensate providers for the additional work.
Unfortunately, a bad situation may well get worse. Medicare reimbursement is scheduled to decline, and not by a little. According to Paul Ginsburg writing in the Health Affairs blog, “a cumulative payment rate reduction of 41 percent is scheduled through 2016 (9.9 percent on 1 July 2008 and approximately 5 percent annually thereafter), in contrast to a 21 percent increase in physician input prices projected by the Medicare Actuary.”
Yes, although their costs are going up 21% over the next ten years, they will be paid 41% less. And due to the shortsightedness of regulators and legislators, reimbursement for comp will suffer an identical drop. I know, Congress always bails out the docs and increases reimbursement…but sooner or later that won’t happen. Then we’re really in trouble.
Perhaps states should start thinking now about a smarter way to pay docs.
Or, we can wait for Congress…


4 thoughts on “Why is workers comp reimbursement based on Medicare?”

  1. Joe, I don’t think there is anything wrong with basing WC fee schedules on Medicare’s RBRVS allowances. In fact,I think it is desirable since this methodology is a well-researched and frequently-updated indicator of the relative value/cost of various procedures and services. Furthermore it is comprehensive.Many state fee schedules not tied to the RBRVS often fail to include less-frequently utilized CPT codes and fees, leading to prolonged squabbling over appropriate reimbursement.
    One can then apply whatever multiplier( if any) to the base Medicare fees in order to yield the desired level of compensation, while preserving the correct relativity between codes.

  2. I agree with Dr. L and also think MD’s need to look at ways of helping to control the rising cost of medicine by controlling utlization. This has to be tied to tort reform as well so doctor’s do not have to practice defensive medicine. It is a bigger fix then adjusting a fee schedule and pointing a finger at one group

  3. Dear Doctors:
    If you agree that comp. rates should be tied to Medicare, then you should have no problem treating comp. patients whose injuries are in dispute.
    The facts in this regard are far different. In the Boston area, which is the area about which I can speak, the rates are tied to MEDICAID, and the best otho and neurosurgeons have banded together and formed private practices. The are located within hospitals. The hospital allows them to have physical space, takes care of their credentialing, and affords them OR priviliges. Yet, these doctors are not hospital employees, and as such are able to turn away injured workers. They do not want to accept Medicaid rates around here, and if they cannot prenegotiate their fees they simply refuse to see you. They will refuse to accept your private health insurance as well, as they are worried that, at some future date, monies will be taken back if a fee is later negotiated that is less than what they want to accept.
    Medicine, as you know, is a business. Doctors complain constantly about how much harder they have to work becaue insurance company reimbursements are not keeping pace with their costs.
    Is it really their costs, or does it have more to do with lifestyle issues?
    As an injured nurse, I know of what I speak. I closed my comp. case because no well respected surgeon would help me. The day I went before the judge I was able to make 2 appointments with doctors whose office’s would not have booked me the day before.
    By the time I had my surgery, a year and a half had passed. My surgery resulted in permanent nerve damage and I am unable to work. I have no health insurnace other than Medicare Part A because I can’t afford it.
    I recently wanted to get some PT prescribed by my surgeon; I got turned away from the PT group affiliated with the hosptial because – yes – they are privately owned by the head therpist and the owners of the club where the facility is located. I might add that this therpist is married to one of the surgeons in one of the groups that turned me away. Several years ago, their overly ostentatious new home was featured in the magazine section of the major Boston daily. Part of their success is borne on the back of injured workers.
    I hope that your behavior does not mirror that of the doctors I’ve encountered here; otherwise a serious look in the mirror is in order.
    As for tort reform, fewer than 5 percent of all physicians are responsible for nearly all malpractice claims. Yet it is next to impossible to take away the license of an MD. Sorry for the cynicism, but it is well deserved.

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates

SUBSCRIBE BY EMAIL

SEARCH THIS SITE

A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

DISCLAIMER

© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.

ARCHIVES

Archives