Two reports indicate that workers’ comp medical costs in California are climbing. That’s important for two reasons:
Joe Paduda
That said, remember that three of California’s cost drivers are unique to the state.
Earlier this month, the Workers Compensation Research Institute released a report indicating that medical costs increased 7% last year, a bigger increase than the 6% annual increase for the previous two years. One notable finding, which won’t come as a surprise to regular readers, is that the biggest driver is hospitals.
A Workers' Compensation Insurance Rating Bureau report shows slightly different figures, likely due to different underlying data (WCRI uses lost-time claim data; WCIRB is all-inclusive).
A couple of notable takeaways:
What does this all mean?
California does have unique characteristics. However, the hospital cost increases are not unique to the Golden State.
Those are especially notable, as California’s comp inpatient reimbursement is based on Medicare diagnosis-related groups, which tend to limit cost increases (but are increasingly being manipulated by revenue cycle management).
So what does this mean for you?
Better up your facility cost management game.
For hospitals’ perspective, read this. Yeah, it’s pretty bizarre.
Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.
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