Hospital outpatient costs higher in states without medical fee schedules: WCRI

Common outpatient surgeries performed in states without medical fee schedules cost 27% to 73% more than in a group of states with schedules, according to the Cambridge, Mass.-based Workers Compensation Research Institute.

WCRI's study, “Hospital Outpatient Cost Index for Workers' Compensation,” measured outpatient expenses from 2003 to 2009. The study that was released Tuesday focused on common workers comp surgeries, which WCRI said drive 60% to 70% of all outpatient costs.

The states included in the study represent 60% of workers comp benefits paid in the United States. They are California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin.

The study also found that states with fee schedules based on a percentage of charges had higher costs than states with other types of fee schedules, such as those that pay per procedure or those that use ambulatory payment classifications.

Significant costs variations also were found across the states.

“Compared with the 17-state median, the average hospital outpatient/(ambulatory surgical care) cost per surgical episode in Massachusetts—the state with the lowest costs—was 60% lower than the median study state,” WCRI reported. “The average cost in Illinois—the state with the highest costs—was 45% higher, as of 2009.”

In 2011, however, Illinois adopted reform legislation that cut the state’s workers comp fee schedule rates by 30%.