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ACA, work comp, and case shifting – the details

Last week’s webinar on ACA and the possibility of case-shifting due to capitation was quite well attended – those who could not make it can take a listen by signing up here (there’s a fee for members and non-members of WCRI).

I was honored to be asked to participate, asked to present a different perspective (namely, it’s very hard to attribute case-shifting to ACA) based on what I see as a very complex and diverse health care world.

Here are a few reasons for my skepticism.

The argument for case shifting requires several assumptions:

  • HMOs are capitated
  • there are financial incentives e.g. capitation at the primary care level
  • primary care providers are aware of the financial implications of case assignment
  • PCPs purposely assign cases to work comp based on those financials
  • the ACA will lead to more Accountable Care Organizations that will use capitation more

A couple observations.

  1. About 2/3 of HMOs use capitation to reimburse provider groups.
  2. About 60% use some form of fee for service, so many HMOs use BOTH capitation AND FFS.
  3. Almost all PCPs are NOT paid by capitation.  In fact, PCPs are most often paid by FFS.
  4. Some – but by no means all – ACOs contract with employers.  Capitated reimbursement is almost unheard of in these arrangements.
  5. The interaction of reimbursement and physician behavior is complex and by no means straight forward.

So, while the provider group is frequently capitated, the providers within that group are not.

There’s also no indication that capitation at the group level is becoming more popular under ACA.

Finally, I’d suggest that folks really interested in this take the time to dig deep into provider reimbursement under ACOs and ACA and HMOs.  It’s very complex, far from simple, and, as Jaan Sidorov illustrates so eloquently when describing a research study intended to promote standards of care:

This study should give pause to anyone who thinks that physicians can be manipulated with more money.  They live by more than bread alone.

What does this mean for you?

When you think you are starting to figure things out, it’s probably because you just haven’t looked deeply enough.

One thought on “ACA, work comp, and case shifting – the details”

  1. Joe I could not agree more. As long as you stay at 50,000 feet you can say you have it mastered but if you go below that you know for certain that you have not got a clue or at least that has been my experience with my own limited knowledge base.

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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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