Texas: Medical costs per claim decline after comp reforms, researchers say

Medical costs per workers' compensation claim in Texas have declined significantly over a relatively short period after a series of legislative reforms, according to a recent study. However, according to the report, Texas still has higher costs and utilization than many other states for some types of medical care.

Prior to the enactment of comprehensive workers' comp reforms in 2001, the Workers Compensation Research Institute found that medical costs per claim in Texas were among the highest in a study of 14 states. Those costs, researchers said, were driven mainly by higher utilization, particularly higher use of chiropractic care. However, by 2006, medical costs per claim in Texas were 14 percent lower than the median study state.

The study -- Monitoring the Impact of Reforms in Texas: CompScope^TM Medical Benchmarks, 9th Edition -- concluded that a combination of factors contributed to that result. Those factors included a lower fee schedule and more active management of medical care by payors, which researchers said led to large decreases in both prices paid and utilization of services.

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Despite these significant decreases, the study noted that Texas still ranked higher than many of the study states on a number of important metrics of medical care.

Highlights of findings. Among the highlights of the study, researchers found that:

Medical payments per claim fell significantly for chiropractors. The study reported that visits to chiropractors in Texas were cut by about one-half, with the most significant decreases occurring from 2001 to 2002 (dropping from nearly 40 visits per claim to 33) and from 2005 to 2006 (dropping from about 27 visits per claim to 21).
Researchers said the decrease in the number of chiropractor visits per claim was largely the result of a substantial decrease in the percent of claims with more than 50 visits. Despite these large decreases, Texas still had the highest number of chiropractor visits per claim in 2006 -- 20 compared to 12 in the typical study state. Similarly, the percentage of claims with chiropractic treatment and the share of total medical costs paid to chiropractors in Texas in 2006 were still highest among the 14 study states.
Fee changes led to lower physician payments. The study found that medical payments per claim to physicians declined 16 percent overall from 2002 to 2004, largely the result of fee schedule changes under H.B. 2600 over that period. Researchers said a further decrease of 9 percent occurred from 2005 to 2006, driven mainly by a drop in office visits that was offset in part by more complex office visits being billed.
Conversion factors may result in one-time increase in prices paid for services. Researchers said the increase in the 2008 medical fee schedule conversion factors to reflect increases in practice expenses since 2002 and the separate conversion factor established for surgery will likely result in a one-time increase in prices paid for services from an estimated 16 percent up to 40 percent.

Read more at the WORKERSCOMP Forum^TM homepage.

August 31, 2009

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