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Employers pay higher costs as workers cross state lines for treatment

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BOSTON — Injured workers living in New York are traveling to New Jersey for treatment at ambulatory surgical centers, which leads to higher costs for employers, according to the Cambridge, Massachusetts-based Workers Compensation Research Institute.

About 20% of ambulatory surgical center surgeries for New York workers comp claims were performed in New Jersey in both 2010 and 2011, according to preliminary research by WCRI. The percentage increased to nearly 40% in 2012 and again to nearly 50% in 2013, WCRI public policy analyst Bogdan Savych said Thursday while presenting the findings during the 2016 WCRI Annual Issues and Research Conference in Boston.

While New Jersey does not have a medical fee schedule, New York's schedule allows services provided out-of-state to be billed at the prevailing rate in the geographical area of the provider. As a result, Mr. Savych said, employers generally end up paying more when workers are treated at ambulatory surgical centers in New Jersey.

In fact, ambulatory surgical center payments in 2013 were three to four times higher in New Jersey than in New York, Mr. Savych said.

Among injured workers living in New York, knee arthroscopy surgeries performed in-state cost an average of $1,861, compared with an average of $6,815 when performed in New Jersey, according to the preliminary research. Similarly, shoulder arthroscopy surgeries cost an average of $8,551 more when workers living in New York underwent surgery in New Jersey rather than in-state.

It's possible that surgeons are influencing where injured workers undergo treatment by offering to schedule surgeries sooner, Mr. Savych said.

Meanwhile, less than 5% of ambulatory surgical center surgeries for Pennsylvania workers comp claims were performed in New Jersey in 2012, and just below 10% were performed in 2013, according to the preliminary research.

Pennsylvania's medical fee schedule could be behind the lower percentages, Mr. Savych said. It states that when injured workers are treated out-of-state by providers who are licensed by and have a place of business within the commonwealth, medical fees are capped based on the provider's primary place of business within the commonwealth, according to Pennsylvania's Workers' Compensation Act. For out-of-state treatment by providers who don't have a place of business within the commonwealth, medical fees are capped based on the rate in Harrisburg, Pennsylvania.

One attendee said it would be interesting to see the actual distance injured workers living in New York traveled to undergo treatment in New Jersey.

“We don't know exactly why workers did that, how they ended up in one location or the other,” Mr. Savych said, adding that WCRI intends to explore the topic further.