NCCI did not project any savings from the state's adoption of the 6th edition of the American Medical Association disability rating guidelines, a provision that allows employers to direct care to preferred provider organizations and the creation of a rebuttable presumption that an injury that occurs while an employee is intoxicated is not compensable, because the effects of these legal changes is not measurable presently.
There are some very interesting observations about this rate change - namely that the rate change was not larger because, according to Illinois experts and NCCI, many employers and carriers already contract for services at rates lower than the fee schedule.
In addition, a Centers for Medicare and Medicaid Services study has shown when government agencies reduce medical fee schedules, providers adjust for the loss of revenue by changing the "volume and intensity" of the services they perform.
Perhaps this is the gravamen of the whole "fee schedule vs. access to care" debate and the reason why medical costs eventually inflate after a "reform" that purports to control medical costs through fee schedule manipulation. The bottom line is that in a complex system such as workers' compensation, where there are many moving parts and interested parties, the opportunities to take advantage of one provision or another expand or contract depending upon the motivations generated by the law changes.
In other words, human behavior is to adapt to change - its a survival technique that we are quite adept at. When presented with a threatening situation humans will find the best course of action to either maintain or grow their relative situations.
This axiom is reflected in NCCI's observation about perceived savings from a provision of the Illinois reform bill that limits disability ratings for carpal tunnel syndrome claims to 15% in most cases. NCCI said it is expected to produce an overall savings of 0.6%. But NCCI warned: "Due to the significant reduction in benefits, there may be an incentive for claimants to seek a different diagnosis in order to circumvent the restriction on their PPD benefits for CTS-related injuries. Therefore, some of the indicated savings above may be mitigated to the extent that CTS-related injuries receive different diagnoses in the future."
In addition, NCCI notes that while physician prescribed medication is now limited by the reform bill to 100% average wholesale price (AWP) plus a dispensing fee of $4.18, since there is no definition of AWP there consequently is no control over that measure: "Note that the AWP is not subject to any law or regulation. Therefore, there are no requirements for the AWP to reflect the price of any actual sale of drugs by a manufacturer. In addition, since no control exists over the AWP, it may be subject to significant upward pricing pressures. For these reasons, limiting the reimbursement for drugs to the AWP set by the manufacturer may result in less cost savings than anticipated."
In the medical fee schedule debate, while there is convincing evidence that many specialists will reduce their intake of workers' compensation treatment claims without some sort of restriction, there is also indication that fee schedules don't really control costs in the long run because the nature of claims will morph towards those services that provide the best opportunity to increase or maintain a revenue stream. Will the changes in physician payment and medication dispensation limitations reduce injured worker access to care?
The Illinois reform fee schedule is going to provide a very interesting real time opportunity to observe and measure what the true effects are on access to care and/or physician willingness to treat workers' compensation patients.
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