Massachusetts: Study finds workers' comp medical payments low, but steadily increasing
A recent study by the Workers Compensation Research Institute found that employers in Massachusetts paid an average of slightly more than $5,100 for 2006 workers' comp claims with experience through March 2007. This ranked among the lowest of 14 states that were studied. Researchers said that a key driver of the low medical payments was the prices paid for nonsurgical services, which were related to the lowest nonhospital provider fee schedule in the nation.
The study, CompScopeTM
Medical Benchmarks for Massachusetts, 9th Edition, found that despite lower-than-typical fee schedule rates for all service categories, prices paid for surgeries were higher in Massachusetts compared to other study states. Researchers said employers and insurers in the state often negotiated surgery prices higher than what the fee schedule dictated, particularly for orthopedic surgeries.
WCRI noted that fee schedule changes that went into effect April 1 focused on this issue. Fees for many surgical procedures were increased to reflect current rates being paid, raising fees in some cases two to three times above the 2004 fee schedule rates.
Researchers found that another provision of the revised fee schedule increased physician fees by 10 to 20 percent, except for anesthesia and surgery, which were subject to larger increases. At the same time, the study found that hospital reimbursement rates generally decreased.
Among the highlights of the study, researchers found that:
- Medical payments were lower for nearly all providers. The study found that medical payments per claim in Massachusetts were lower for nearly all providers -- both nonhospital and hospital -- compared to the typical study state. For example, payments to physicians were 42 percent lower than the median of the 14 states, which researchers said was mainly due to fewer physician visits and fewer services per visit. Utilization for nonhospital providers in Massachusetts was the lowest among the study states.
- Fewer claims received specialty services from nonhospital providers. Researchers noted that fewer claims in the state received specialty services -- such as minor radiology and physical medicine -- from nonhospital providers. Conversely, these services (and evaluation and management) were provided more often in a hospital outpatient setting in Massachusetts than in the typical study state.
- Payments for hospital outpatient services were considerably less. Payments per claim for hospital outpatient services in Massachusetts were about half the amount paid in the typical study state. Researchers said the lower payments per claim for hospital outpatient services may be partially due to a higher percentage of general outpatient care billed by hospitals in Massachusetts compared to other study states -- services that would likely be billed as nonhospital services in other states. As a result, the mix of services provided in the hospital outpatient setting was less intense in Massachusetts than in the typical study state.
The study concluded that the lower payments per service for hospital outpatient services were likely due to the fact that the provider fee schedule applies to hospital outpatient services when it is determined that the service can be safely provided outside the hospital setting. Hospital inpatient payments per claim were lower than typical of the study states, and a lower percentage of cases involved an inpatient stay.
- Payments remain low, but are increasing. The study found that medical payments per claim in Massachusetts have been steadily increasing -- 9 to 12 percent per year from 2001 to 2005 and at a slightly slower rate, 7 percent, in 2006 for claims with 12 months of experience. In 2006, payments per claim to nonhospital providers were stable or falling, due mainly to fewer visits per claim. Prices paid were stable, researchers said. The payments per claim for hospital outpatient services had moderate growth since 2004, mainly driven by increases in payments per service for hospital outpatient services.
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September 3, 2009
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