Pennsylvania’s Workers’ Comp Medical Payments Per Claim Slowed in 2010

Growth in payments per claim for the medical care of injured workers under Pennsylvania’s workers’ compensation system slowed in 2010, largely as a result of slower growth in payments per claim made to nonhospital providers and utilization of their services, according to a new study by the Workers Compensation Research Institute (WCRI).

The WCRI study, CompScope Medical Benchmarks for Pennsylvania, 13th Edition, said that medical payments per claim grew 3.5 percent in 2010, slower than the 7.6 percent per year from 2005 to 2010. The study observed that payments per claim for many services billed by nonhospital providers, such as physicians, chiropractors, and physical/occupational therapists, changed little or decreased in the state.

“Relatively small changes in utilization per claim and prices paid for professional services of nonhospital providers contributed to the slower growth in nonhospital payments per claim in Pennsylvania,” said Ramona Tanabe, WCRI’s deputy director and counsel.

Compared with the other states in the 16-state WCRI study, Pennsylvania had typical medical payments per claim, reflecting a combination of lower prices paid for professional services and hospital outpatient services and higher utilization of medical services.

The study observed that a greater percentage of Pennsylvania workers received at least one service in a hospital outpatient setting compared to workers in other study states. Despite the higher percentage of services billed by hospital providers, Pennsylvania had 31 percent lower-than-typical hospital outpatient payments per claim.

Rapid growth in hospital inpatient payments per episode was a cost driver in the state during the study period. From 2005 to 2010, hospital inpatient payments per episode grew 10 percent per year in Pennsylvania, compared to 6 percent per year in the typical study state.

Utilization of physical medicine was among the highest of all study states, in contrast to many components of medical payments in Pennsylvania that were lower than, or typical of, the 16-state median.