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Fee schedules rein in comp cost increases

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Many states without workers compensation fee schedules for professional services saw prices paid increase more rapidly over the course of six years than states with fee schedules, according to a new study by the Workers Compensation Research Institute.

Prices paid for a similar set of professional services varied across 31 study states, though prices were generally lower in the 25 states with workers comp fee schedules, Cambridge, Massachusetts-based WCRI said in the study, Medical Price Index for Workers' Compensation, Seventh Edition, released Thursday.

With a median growth rate of 6% for prices paid from 2008 to 2014, study states with fee schedules saw prices increase more slowly than most states without fee schedules, according to the study.

In all non-fee-schedule states except one outlier, New Jersey, the overall increase in prices paid during the same period was between 8% and 28%, with a median growth rate of 17%, the study says.

At negative 0.4%, New Jersey had one of the lowest cumulative growth rates in prices paid across all study states, according to the study. While the state experienced a growth rate similar to other non-fee-schedule states during the early study years, researchers said an increase in the share of payments made to in-network providers is one reason the overall level of prices paid was about the same in 2008 and 2014.

“Increasing costs for medical care for treating injured workers have been a focus of public policymakers and system stakeholders,” Rebecca Yang, senior public policy analyst at WCRI and an author of the study, said in a statement. “This study will help them understand … if the reason for price growth in their state is part of a national phenomenon or whether the causes are unique to their state and, hence, subject to local management or reform.”

Study states without fee schedules are Indiana, Iowa, Missouri, New Jersey, Virginia and Wisconsin; and study states with fee schedules are Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee and Texas.

Meanwhile, professional services included in the study are physical medicine, surgery, radiology and emergency care, among others.