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How Would Value-Based Care Change Workers' Compensation?

Posted on in Workers' Compensation

How Would Value-Based Care Change Workers' Compensation?There is an ongoing debate in the workers’ compensation insurance industry about whether more insurers should adopt a value-based care model for paying claims. VBC proponents in the industry cite the potential to provide treatment that is more effective in cost and outcome for the patient. How would a VBC system change workers’ compensation for claimants? It may benefit them in theory, but there are still questions about how the system would actually work.

Value-Based Care vs. Fee for Service

Workers’ compensation insurers use a fee-for-service payment model, in which the insurer pays the healthcare provider for each visit or procedure that it performs. Critics of fee for service say that it puts a greater incentive on the number of visits than the quality of care provided. A VBC payment system compensates healthcare providers based on the nature of the injury and the recovery of the patient. There are several payment models for VBC, including:

  • Pay for performance;
  • Bundled payments; and
  • Outcomes-based payments.

VBC proponents call this a more holistic and patient-centered approach to workers’ compensation. The doctor’s financial incentive is to help a worker reach maximum recovery as soon as possible, which could result in injured employees returning to work more quickly. Of course, insurers could also benefit from more predictable pricing and shorter periods of disability payments.


Medicare has largely adopted the VBC model, but there are more obstacles to overcome before it becomes common in workers’ compensation. Both insurers and healthcare providers will need to accept that there is some cost risk when payments are predetermined. State governments may need to change their laws to allow insurers to use a VBC system. Fee schedules already set a price on treatments, based on which body part is being treated. There are also questions about how VBC may affect the treatment that injured workers receive:

  • How will insurers grade the performance of providers?;
  • Will insurers refuse to pay for treatments from providers who they claim perform poorly?;
  • Will doctors perform fewer tests and procedures on patients because they will not be compensated?;
  • Will doctors feel discouraged from treating patients with complicated injuries, knowing that the payment they receive may not match the cost of treating the patient?; and
  • Will doctors feel a greater incentive to clear a patient to return to work, even though there is a risk of re-injury?

Contact a Crystal Lake Workers’ Compensation Attorney

For workers’ compensation insurers, their best cost-saving practice is to try to deny your claim. A McHenry County workers’ compensation attorney at Botto Gilbert Lancaster, PC, will help you file your claim and receive the benefits you need. To schedule a free consultation, call 815-338-3838. 



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