Medical Costs for Injured Workers Rising in Indiana

The costs of medical care for injured workers in Indiana have been growing rapidly at an annual rate of 8 percent, a faster growth rate than most states in a 16-state study by the Workers Compensation Research Institute (WCRI).

The study, Medical Benchmarks for Indiana, CompScope 13th Edition, said growing prices and payments for hospital inpatient care were the main drivers behind the growth in medical payments per workers’ compensation claim between 2005 and 2010.

Lower to typical utilization of medical care in the state’s workers’ compensation system helped to offset the impact of higher prices.

The Cambridge-based WCRI observed the rapid growth in prices and hospital payments per inpatient episode in Indiana was similar to the rise in these metrics in other states without medical fee schedules.

The study observed that states with no medical fee schedules tend to have higher prices and faster rates of price growth than states with fee schedules, leading policymakers to conclude a fee schedule could restrain medical cost growth. However, policymakers should keep in mind that fee schedules restrain medical prices, not necessarily medical payments, according to WCRI.

“The adoption of a first-time fee schedule could stimulate changes in the billing or practice patterns of medical providers that, in turn, might offset some or all of the cost savings from scheduled prices,” said Ramona Tanabe, WCRI’s deputy director and counsel.

The WCRI study said payments per claim for hospital outpatient care increased, at 8.6 percent per year from 2005 to 2010. Prices paid for nonhospital services rose 33 percent from 2002 to mid-2011 in Indiana, like most states without price regulation, according to the study.

Source: WCRI