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The Federalization of Workers Comp – seriously?

This afternoon I was a lunch time speaker at the IAIABC Conference in St Louis, where I was asked to opine on the chances of a major Federal incursion into the (mostly) state regulated world of work comp. I’ve noted (way) more than once that this is one of those ‘never gonna happen’ things, so here was an opportunity to make my case in front of a very knowledgeable and engaged group. There was a lively and informed discussion after the talk, and I’ll dive into that in a later post.
Here’s the first of several excerpts from that talk. I welcome your comments and contrasting opinions.
Workers comp is a tiny, all-but-insignificant industry that accounts for less than two percent of total US medical spend. Sure, it may be wildly important to you and me, but, really, does anyone else give two hoots about work comp?
Didn’t think so.
Insurance segments that tend to be regulated or addressed (in a meaningful way) on a national basis are those that are so large or complex or federally-specific that only the federal government has the interest and resources and capacity required to address the risk – which is how flood insurance came about, and nuclear plant risk guarantees, terrorism risk insurance, and coverage for the beryllium industry.
WC doesn’t fit the profile. – it’s relatively small, has an active, vocal, and effective group of stakeholders from across the political spectrum and both political parties (plaintiff attorneys and the Chamber of Commerce are two examples), and isn’t perceived by anyone in a position of authority to be anywhere close to broken.
Why would anyone in Congress – except Joe Baca, – have any interest at all in taking on workers comp?
And if they did, which they don’t, where exactly would this fit on the priority list? Above the budget bill? Just below immigration reform? Senior to the medicare physician fee fix bill, or not? More, or less, important than the nuclear non-proliferation treaty? If less, now that the treaty is passed, can we expect some major action?
Somewhat less significant than the Israeli West Bank settlement issue, or more? More critical than the energy bill, or no?
If Congress(wo)man X has to spend time thinking about comp, or Afghanistan, or the US nuclear industry, or Iran, or China’s refusal to adjust its currency valuation, or bank regulation, what do you think s/he will do? Where will s/he spend her time?
As to any interest at CMS in taking over WC, wouldn’t you think they have enough to do what with dealing with Congressional oversight hearings, implementing health reform, expanding Medicaid by a third, revising hospital reimbursement, drastically changing physician compensation, completely redo-ing Part D, developing and implementing over a dozen pilots and trial programs, and revamping Medicare Advantage?
Next, we’ll review a bit of history and discuss some of the new ‘news’ that is generating excitement among those concerned about a federal takeover.

2 thoughts on “The Federalization of Workers Comp – seriously?”

  1. Joe, I agree with you, though I suppose that one might argue, with tongue planted somewhat in cheek, that the willingness of Congress to waste time on the less important should not be underestimated. After all, during times of war and growing budget deficits over the last decade, they have taken time to hold multiple hearings on the BCS bowl system and steroid use in baseball. Why not work comp?

  2. Joe,
    Don’t you think that this has gained traction because of the fear of how the Affordable Care Act will impact WC? I think you and I agree that the ACA will not have much impact on WC and if it does it will be a positive impact, but I’ve heard so many people say that the ACA is socialism that it just naturally follows that this ‘overreaching’ administration will try to socialize everything including comp.
    I find it interesting that so many otherwise intelligent people are willing to accept that as logical and almost inevitable.

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Joe Paduda is the principal of Health Strategy Associates




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.



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