The Workers Compensation Research Institute just released a study pointing out a medical fee schedule dilemma: The states that still hold on to the old usual and customary method of charging for workers’ compensation treatment are costing employers dearly.
The study, WCRI Medical Price Index for Workers’ Compensation, 11th Edition, found that prices paid in states with no fee schedules for professional services were 39% to 171% higher than the median of the study states with fee schedules in 2018.
WCRI also found that medical prices in most states with no fee schedules grew faster than in states with fee schedules. The median growth rate among the non-fee schedule states was 34% from 2008 to 2018, compared with the typical growth rate of 6% among the fee schedule states.
And WCRI says the non-fee schedule states’ medical costs grew at an almost 600% faster rate.
Look at the numbers again. Those are not small numbers. States such as Tennessee, Indiana and Virginia have all decided to take the plunge and enact fee schedules. What do you think happened to those states’ medical costs for workers’ compensation? Yes, they have reduced their spending.
This annual report focuses on professional services billed by physicians, physical therapists and chiropractors. The medical services fall into groups: evaluation and management; physical medicine, surgery, major radiology, minor radiology, neurological and neuromuscular testing; pain management injections; and emergency care.
The 36 states in the study, which represent 88% of the workers’ compensation benefits paid in the United States, are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin..
I will report back on the study to see which states actually are having a workers’ comp medical fee schedule dilemma.
This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.
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