© Copyright ClearPath Benefits

Hefty portion of work-related injury costs not paid for by workers’ comp, others picking up the tab

Original article from scienceblogs.com

By Celeste Monforton

Nearly 40 percent of work-related injuries and illnesses seen in U.S. emergency rooms are not billed to workers’ compensation—the insurance program that’s designed to cover them.    An increasing number of patients suffering from injuries or illnesses caused by exposures at work are using their private insurance, paying out of pocket or billing Medicaid or Medicare, instead of filing the appropriate claim to their employers’ workers’ compensation insurer.  Those are the findings of a new study published in the journal Health Services Research by researchers with CDC’s National Institute for Occupational Safety and Health (NIOSH).

The analysis involves four years of data from the National Hospital Ambulatory Medical Care Survey (NHAMCS), a representative sample of U.S. emergency room visits.   An estimated 458 million emergency department (ED) visits occurred between 2003-2006, based on the representative sample of 146,296 cases.  The researchers specifically examined the subset of emergency room visits which were coded as a work-related injury or illness.  They used the “expected source of payment” data field to determine what proportion of these work-related cases were expected to be paid for (or not) by a workers’ compensation insurer.  They identified 3,881 work-related cases with complete information in the “expected payer” field.   The reasons for the ED visits included fractures, lacerations, burns, amputations and musculoskeletal disorders.  Twenty-five percent of the cases involved a patient reporting “severe” pain and 14.9 percent arrived at the ED via ambulance.

Of the 3,881 cases identified as work-related, 39.65 percent were not expected to be paid by workers’ compensation insurance.   For work-related injury cases, an estimated 37 percent were not expected to be paid by workers’ compensation, and for work-related illness cases, the estimate was a whopping 47 percent.   Instead, for 21.4 percent of the cases the expected payer was private health insurance.  Another 11.4 percent were listed as self-pay, and 3.5 percent and 1.7 percent were expected to be paid by Medicaid and Medicare, respectively.

The proportion of work-related injury cases not expected to be paid by workers’ compensation insurers did not differ significantly by injury type (e.g., amputations, burns, lacerations, sprains.)  For work-related illness cases, in contrast, certain conditions were more likely not to be paid by workers’ compensation than others.  For example, “only” 28.9 percent of work-related disorders of the eye and adnexa were not expected to be paid by workers’ compensation, compared to 40.7 percent of musculoskeletal disorders and 64.9 percent of skin diseases which were not expected to be paid by workers’ compensation.  The authors also noted that the proportion of non-WC visits increased significantly over the four year period, from 32.1% in 2003 to 44.9 % in 2006.

“Each year during the period 2003-2006, the odds that a given work-related ED visit would be a non-WC visit increased by 19 percent, a trend that was statistically significant.”

Granted, not all workers are covered by workers compensation.  The self-employed and domestic workers don’t have work comp coverage.   Most States also exempt agricultural employers from carrying workers’ compensation insurance.  Some States don’t require employers to carry workers’ compensation insurance if they have fewer than five employees (e.g., Missouri, Tennessee) or fewer than three employees (e.g., Michigan, Wisconsin).    The National Academy of Social Insurance estimates that 125 million U.S. workers are covered by workers’ compensation, out of the current U.S. labor force of about 155 million.  But even with these exceptions, there’s likely more going on to explain why a hefty share of work-related injuries and illnesses are not captured in the workers’ compensation system.

Researchers who’ve studied the system provide some hints about why some injured workers would rather use their private insurance or pay out-of-pocket than file a claim with their employers’ workers’ compensation carrier.   Azaroff and colleagues note that some workers may “risk disciplinary action, denial of overtime or promotion opportunities, stigmatization, drug testing, harassment, or job loss,” for reporting an injury.  In a survey of 400 workers who used the system, Strunin and Boden write that a majority of respondents found it to be “cumbersome, frustrating, and demeaning.”    Speiler and Burton explain

“… for many workers, the workers’ compensation system is dizzying and frustrating in its complexity and apparent irrationality. While the rules may be understandable to repeat players—particularly insurers and third party administrators of claims—they are obscure to many workers who are caught up in the delays and denials.  Some say it is no accident that Franz Kafka worked in a workers’ compensation bureau: the term Kafkaesque is fitting for the experience of many injured workers.”

It probably shouldn’t surprise me that individuals try to avoid using the workers’ compensation system.   But that has consequences.   One of those consequences has to do with our understanding of the impact of work-related injuries and illnesses.  Because the U.S. doesn’t have a comprehensive surveillance system for work-related injuries and illnesses, data from workers’ compensation cases helps to fill the knowledge gap.   If the trend reported in this paper continues—a 19 percent increase in the odds that a given work-related ED visit would not expected to be paid by workers’ compensation—-that’s a hefty portion of work-related injuries missing from the workers’ comp data sets.

Another consequence is shifting the cost of work-related injuries from the parties responsible (i.e., employers and workers’ compensation insurers) to other payment sources.   In this study, the NIOSH researchers’ representative sample translates to about 12,132,000 work-related ED visits over the four-year period.   The proportion of work-related cases that were expected to be paid by Medicaid and Medicare was 5.2 percent.  Let’s say that half of those work-related cases actually should have been paid by a workers’ compensation insurer, and the typical ED cost per case is $500.   That’s $157 million paid out of public coffers.  Imagine the hundreds of millions in cost-shifting if a large share of those cases billed to private insurers (21.4 percent) belonged in the workers’ comp system.