Low claim frequency keeps Virginia workers comp claim costs down

CAMBRIDGE, Mass.—Virginia's workers compensation system has higher medical costs than many states, but low claim frequency has kept down insurance premiums and average claim costs, according to the Workers Compensation Research Institute.

In a report released Thursday, the Cambridge, Mass.-based WCRI said that medical costs for indemnity claims in Virginia were 22% higher than the median when compared with several other states, including Illinois, Louisiana and Wisconsin.

Medical costs per claim in Virginia increased 8% annually on average from 2004 to 2009, the study showed. WCRI said costs were driven largely by Virginia’s lack of a medical fee schedule.

Despite higher costs, WCRI said claim frequency in Virginia was 36% lower than the median when compared with 45 states and Washington.

As a result, WCRI said Virginia's workers comp premium rates were 32% lower than other states, while the average claim cost per worker was 27% lower than the median.