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Studies show downward trend in comp medical payments

Posted On: Oct. 18, 2018 11:52 AM CST

Studies show downward trend in comp medical payments

Reform measures and fee schedule changes are resulting in an overall trend of lower medical costs per claim in several states, according to several Workers Compensation Research Institute reports released Thursday. 

In its 19th year of studying medical costs, the Cambridge, Massachusetts-based institute released 16 reports, all including a state-by-state comparison of medical costs across 18 states. The reports show varying results, with most states having adopted changes to fee schedules in recent years and most states showing decreases in amount paid for medical care as a result. 

The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas and Iowa.

The reports also ranked states according to medical payments per claim in 2017, with Wisconsin, Virginia and Indiana showing the highest costs with costs-per-claim averaging just below $20,000. States with the lowest costs—Massachusetts, California, and Michigan—averaged between $5,000 and $10,00 in medical payments per claim.

Other conclusions include: 

  • California’s decrease in medical payments per claim are the result of the continuing effect of Senate Bill 863, enacted in 2012, which reduced mandated fees for health services in the comp system.
  • Decreases in medical payments per claim in North Carolina were the steepest of all states studied at 6% per year since 2013, which likely reflects recent fee schedule changes.
  • Faster-than-typical growth in medical payments per claim in Pennsylvania was driven by faster growth in hospital outpatient payments per claim.
  • Medical payments per claim in Texas decreased from 2014 to 2016, following several years of increasing medical costs.
  • In contrast to moderate-to-rapid growth in prior years, Wisconsin has experienced little growth in medical payments per claim since 2014.