Physical medicine cost was the largest driver of annual physician cost increases in workers’ compensation during the past decade, according to a new report from the National Council on Compensation Insurance.

The report, titled “Inflation and Workers' Compensation Medical Costs — Physician Services,” was released Tuesday by Boca Raton, Florida-based NCCI and is the third installment in a four-part series examining inflation and comp medical costs.

Among the report’s highlights was the moderate growth of average physician-paid cost per comp claim, which rose about 1.5% per year. Overall, between 2012 and 2021, nationwide average annual doctor payments grew by about 15%.

Growth for average doctor payments was about the same across different regions of the country, with the Northeast experiencing the slowest growth and the Midwest seeing the fastest.

The Midwest is home to some states that do not have comp medical fee schedules for doctor services. There are only six such states in the nation.

Physician costs in the Western U.S., as well as the Southeast and Northeast parts of the country, all increased at a slower pace than the countrywide average, the report states.

The main driver behind growth across all regions of the U.S. was pricing for physician services.

NCCI researchers say payments for physician services make up about 40% of all comp medical costs.

Physician services were broken out into different categories, including physical medicine, evaluation and management, surgery, radiology and others.

While physical medicine costs increased, costs associated with surgery and radiology decreased.

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