WCRI Releases New Edition of Its Medical Price Index for Workers’ Compensation

Cambridge-based Workers Compensation Research Institute released the sixth edition of its annual Medical Price Index for Workers’ Compensation (MPI-WC).

The MPI-WC, like the Consumer Price Index for medical care (CPI-M), measures price inflation. It tracks the actual medical prices paid for each of the major services delivered to injured workers in 25 states over the past 12 years.

“This will help public policymakers and system stakeholders understand how prices paid for medical professional services for injured workers in their state compare with other states and know if prices in their state are rising rapidly or relatively slowly,” said Dr. Richard Victor, WCRI’s executive director.

“They can also learn,” said Victor, “if the reason for price growth in their state is part of a national phenomenon or whether the causes are unique to their state and, hence, subject to local management or reform.”

The method used to construct the MPI-WC is similar to the CPI-M, which is published by the U.S. Department of Labor’s Bureau of Labor Statistics. However, the MPI-WC is a more focused measure of workers’ compensation price growth than the CPI-M. In particular, the CPI-M includes the prices of all medical services provided to the U.S. population; the majority of these services have little or no relevance for tracking medical prices for the care provided to injured workers. The MPI-WC focuses only on those medical services that are commonly provided to injured workers—largely related to diagnosis and treatment of trauma and orthopedic conditions.

Additionally, changes in prices paid under workers’ compensation systems are likely to be related to regulation choices made by the states. The CPI-M for professional services did not track the workers’ compensation price trends well for the study states with fee schedules. For study states without fee schedules, growth in the CPI-M for professional services was fairly similar to workers’ compensation price trends over the study period.

The MPI-WC tracked medical prices paid in 25 large states from calendar year 2002 through June 2013 for nonhospital, nonfacility services billed by physicians, physical therapists, and chiropractors. The medical services fall into eight major groups: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological and neuromuscular testing, pain management injections, and emergency care.

The 25 states included in the MPI-WC, which represent nearly 80 percent of the workers’ compensation benefits paid in the United States, are Arizona, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Click on the following link to download a free copy of this report: http://www.wcrinet.org/studies/public/books/wcri861.pdf.

Source: WCRI