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According to the study, CompScope(TM) Medical Benchmarks for Louisiana, 9th Edition, medical costs per claim were 32 percent higher in Louisiana than in the median of the 13 other states in the study. Researchers said medical costs per claim in the state had been relatively stable for several years until 2006 when they grew 6 percent due to a rise in hospital payments per claim on both the inpatient and outpatient sides. The higher medical payments, the study noted, were largely the result of higher utilization and higher prices paid for services that were delivered in the majority of claims, such as office visits, diagnostic tests and physical medicine.

For claims with more than seven days of lost time, medical costs per claim in Louisiana were 14 percent higher than the typical study state. Researchers said one factor that may have contributed was that injured workers in Louisiana were off work longer than in other study states and likely received ongoing medical treatment during that time. For example, the study found that the average duration of medical treatment was 46 weeks in Louisiana -- about 6 1/2 weeks longer than in the typical study state. Similarly, the duration of physical therapy treatment was 26 weeks in Louisiana -- 30 percent longer than the typical study state.

• Prices paid to nonhospital providers were key. One of the main reasons for the higher medical payments per claim was higher prices paid to nonhospital providers. The study pointed out that even though the Louisiana fee schedule has not significantly changed rates since 1994, prices paid in Louisiana were unusually high for some services and typical for others.

Prices for many physician, chiropractic, and physical therapy services were higher than typical of the study states. For example, prices for radiology services and physical medicine were 14 to 25 percent higher than in the median study state, consistent with the higher-than-typical fee schedule rates for those service groups.

• Higher utilization was a driver of costs. Another key driver of higher medical payments per claim was higher utilization for some services. For example, in Louisiana there were 19 percent more physician office visits and 21 percent more visits to physical/occupational therapists per claim than in the typical study state.

Utilization for neurological testing was 40 percent higher than the median study state because of more services billed at each visit (7.6 in Louisiana compared to 5.5 in the typical state), as well as a more resource-intensive set of services billed.

• More cases involved diagnostic services. The study found that more cases in Louisiana involved diagnostic services, with somewhat more visits per claim. About 80 percent of claims involved at least one minor radiology procedure (such as X-rays and ultrasounds) compared to 72 percent for the typical state, and 46 percent of claims involved major radiology (CT scans and MRIs) compared to 42 percent in the typical state.
• Inpatient stays were among highest in study states. The study found that 11 percent of claims with more than seven days of lost time involved an inpatient stay in Louisiana -- highest among the study states.

Researchers said recent policy debates in Louisiana have revolved around the fee schedule and the tools that payors have to manage medical care and costs, noting that the information in the study may be helpful to policymakers as those issues continue to be considered.

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September 16, 2009

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