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Setting fee schedules a balance for states: WCRI

workers compensation

Researchers with the Workers Compensation Research Institute said states seeking to adopt or update workers compensation fee schedules ought to consider ramifications of setting fees too low or high, balancing cost containment and adequate care for injured workers.

Cambridge, Massachusetts-based WCRI in a report released on Tuesday showed how 44 states and the District of Columbia managed policy choices when it came to fee schedules, highlighting rates in reference to those set by the federal Medicare program. The report provides guidance for states seeking to make changes to the way insurers cover medical procedures.

“The construction of a medical fee schedule in workers compensation involves a delicate balance,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “Setting rates too low may make treating workers uneconomical for providers and jeopardizes workers’ access to quality care. Conversely, if rates are set too high, savings will be negligible and the fee schedule will not achieve its cost-containment goal.”

On average, the District of Columbia, Florida and Massachusetts set their workers comp fee schedule rates within 20% of Medicare rates. Alaska, Idaho, Illinois, Nevada, North Dakota and Virginia set fee schedule rates at levels more than double Medicare at the state level.

About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state, according to the analysis.