Workers comp fee schedule generates savings

A recently implemented workers compensation fee schedule in Delaware led to an 11% decrease in total workers comp medical payments for the state, according to a report from the Workers Compensation Research Institute.

In January 2015, Delaware transitioned to a Medicare-based fee schedule for professional medical services. The fee schedule change was meant to reduce workers comp medical expenses in the state by 33% over three years, Cambridge, Massachusetts-based WCRI said in a report released last month.

After the transition, workers comp fee schedule rates for professional medical services in Delaware were set at an average of 158% of Medicare rates, down 29% from 223% of Medicare rates in 2014, WCRI said. Delaware implemented another 7% reduction in its fee schedule rates in January 2016, which set average workers comp medical service fees at 147% of Medicare rates, according to the report.

Prior to adopting the Medicare-based fee schedule, Delaware’s fee schedule prices for professional medical services were 123% above Medicare rates on average, WCRI said.

Richard Heffron, president of the Wilmington, Delaware-based Delaware State Chamber of Commerce, said businesses in the state feel the fee schedule has helped with cutting workers comp costs.

Ten “years ago, we were the fourth most expensive state in the country and now we are now in the 30s,” he said in an interview with Business Insurance.

Still, Mr. Heffron said that Delaware workers comp “cases tend to stay open longer than other states and I don’t think we have really looked at that as extensively as we need to.”

William Taylor, president of the Philadelphia-based Delaware Compensation Rating Bureau Inc., said solving medical cost containment issues in Delaware cannot solely be achieved by reductions in the fee schedule.

“All industry stakeholders must continue to work together to better understand and address other significant system cost drivers, such as claims duration,” Mr. Taylor said in an emailed statement.