Workers' comp fee schedules tend to keep costs down in most states. A medical fee schedule for workers' comp would assist Wisconsin employers in keeping their costs under control.
The Workers Comp Research Institute recently published a study that showed the state’s workers comp medical costs as some of the higher ones in a recent study of 18 states, called CompScope.
Wisconsin's medical fee schedule is based on the venerable yet more expensive usual and customary fees. Using U&C means taking the average medical costs in an area based on a similar phone number prefix or ZIP code. Dental insurance companies use this practice often to reprice and pay bills.
I was often brought in by third-party administrators, captives and self-insured employers to negotiate the medical bills after, for instance, a collection attorney was pursuing multiple bills that were not paid up to U&C, which is an opinion-type number. There are no exact numbers to go by in these collection matters.
A hidden benefit of fee schedules is one that I have written about a few times. Let us look at the steps in a workers' comp adjuster setting medical reserves on a lost time file. This example is very simplistic, but still a representative procedure.
The date for major reserve setting (60 days) means the adjuster has to usually fill out some type of form that breaks down the indemnity reserves (TTD, TPD, PPD and PTD) and medical reserves.
The medical reserve analysis may require 20-30 blanks to be filled in on an analysis sheet. If the adjuster knows what the projected medical costs are going to be with a fee schedule, she can more accurately forecast the reserves. Nos. 4 and 5 above can be more accurate when projected medical costs are known ahead of time.
The more accurate the reserves, the more accurate the premium charged to employers. For self-insured employers, the more accurate the budgeted cost projections over the next year are on the file.
Virginia decided to institute medical fee schedules a few years ago and moved to a lower-cost tier after 2017.
The following are among the study’s other findings:
Fee schedules still win the day
Workers' compensation fee schedules usually prevail in cost analyses. Let us hope that a Wisconsin medical fee schedule will be a new addition to the states that have them.
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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