Study Reveals Workers’ Comp Medical Cost Drivers and Impact of Reforms in 17 States

The factors behind trends of medical payments per claim in state workers’ compensation systems and the impact of legislative and regulatory changes on those costs are examined in a new set of studies released by the Mass.-based Workers Compensation Research Institute (WCRI).

The studies, CompScope Medical Benchmarks, 16th Edition, examine trends in payments, prices, and utilization of medical care for injured workers. They provide a baseline of current costs and trends for policymakers and other system stakeholders, reporting how medical payments per claim and cost components vary over time and from state to state.

“The reports are useful to identify where medical cost and care patterns may be changing,” said Ramona Tanabe, executive vice president and counsel for WCRI. “They also help identify where medical payments per claim or utilization may differ from other states. In addition, where there may be concerns about restrictions on access to care, the studies can help identify potential underutilization of medical services.”

The studies cover the period from 2008 through 2013, with claims experience through March 2014. The 17 states in the study―Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin―represent more than 60 percent of the nation’s workers’ compensation benefit payments. There are individual reports for every state except Arkansas and Iowa.

The following are among some of the findings:

California: Medical payments per claim decreased 5 percent in 2013, likely reflecting the early impact of the 2012 workers’ compensation reform legislation, including reduced reimbursement rates for ambulatory surgery centers and elimination of separate reimbursement for implantables.

Illinois: Medical payments per claim rose 4.1 percent in 2013, following decreases between 2010 and 2012 due to a 30 percent reduction in the fee schedule rates. Part of the 2013 growth in medical payments per claim was related to annual updates in the fee schedule rates, which are tied to the changes in the Consumer Price Index.

Indiana: Medical payments per claim were higher than in most states studied and rising faster, mainly driven by higher and growing prices.

Louisiana: Growth in medical payments per workers’ compensation claim slowed from 2011 to 2013, in part due to a decrease in utilization of hospital and non-hospital care.

New Jersey: Medical payments per workers’ compensation claim were stable from 2010 to 2013, in contrast to rapid growth in the prior two years, due to a number of factors including increased use of networks, stable utilization of services by non-hospital providers, and decreased percentage of inpatient episodes.

Texas: Medical payments per workers’ compensation claim rose 7 percent in 2013, largely driven by an increase in payments for hospital inpatient episodes. The trend in Texas was about twice the average annual increase from 2008 to 2012.

Virginia: Driven primarily by prices, medical payments per claim were among the highest of the study states.

For more information about these studies, visit http://www.wcrinet.org/result/csmed16_all_result.html.

Source: WCRI