Workers comp costs up despite general inflation decline
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BOSTON – While inflation in the general economy has slowed since 2022, workers compensation payment growth is still at levels higher than in 2020, experts with the Workers Compensation Research Institute said Tuesday.
Changes in medical care utilization and mix of services continue to affect workers comp pricing, and the recent trend of health care labor shortages, especially in nursing, is also contributing to higher costs, panelists said during a session at the 2024 WCRI Issues & Research Conference.
Researchers continue to monitor medical fee schedule changes in states’ workers compensation systems, said Rebecca Yang, a WCRI senior policy analyst. Some states’ fee schedule updates are tied to general inflation while others are not.
Forty-four states and Washington D.C. have workers comp medical fee schedules for professional services, which act as an “effective tool for containing price growth,” Ms. Yang said.
Twenty-six of those states have annual fee schedule updates, while the remainder update their fee schedules on a less frequent basis, said Olesya Fomenko, a WCRI economist.
Changes in Medicare are also driving workers comp price growth, Ms. Fomenko said.
The workers comp sector saw hospital and facility payment pricing growth last year due to factors such as Medicare fee schedule inflationary adjustments for hospital inpatient, hospital outpatient and ambulatory surgery center services, she said.
Ms. Fomenko said there were “some positive dynamics” with inflation and the general economy starting to slow last year. She noted the workers comp sector tends to lag behind such trends.
In the early part of the pandemic, utilization of medical services in workers comp decreased, but those levels have now bounced back up, another possible factor behind the current increase in comp medical payments, Ms. Fomenko said.
