Healthcare providers gaming workers' comp
Healthcare providers who are paid a fixed sum per insured employee are more likely to call an injury work-related so they can shift costs to workers' compensation programs, which reimburse them on a fee-for-service basis.
A recent study by the Workers Compensation Research Institute asserts a back injury was as much as 30% more likely to be called "work-related" (and paid by workers' compensation) if the patient's group health insurance was capitated rather than fee-for-service. Based in Cambridge, Massachusetts, WCRI is widely known for its research reports on the workers' compensation industry
WCRI explains that when a patient covered by a capitated health insurance plan seeks treatment for, say, back care, the physician and his healthcare facility are well-aware they will not earn incremental revenue for their services since they were paid a fixed amount for that patient at the outset of the policy year. But if the condition is deemed work-related, the providers know they will be paid for each service they provide.
The opportunity arises when the cause of injury is not certain, as is the case with a soft-tissue condition or non-specific back pain or strain/sprain of knee or shoulder. WCRI notes it is notoriously difficult to pinpoint the cause of back pain; some cases of back pain are said to be caused by a specific event, others are said to be caused by repetitive motion, and still other cases of back pain are attributed to the aging process.
A lot hinges on the professional judgment of the physician, and given the choice between receiving additional revenue and not receiving additional revenue, many prefer the former. WCRI says providers are more likely to shift cases to workers' compensation in states where capitated group health plans are more common and, therefore, providers are more aware of the rewards of classifying an injury "work-related."