Pennsylvania: Study finds medical costs per claim similar to other states, but rising
Medical costs per claim for workers' compensation claims in Pennsylvania are similar to other states, but a recent report found that they are on the rise.
According to the Workers Compensation Research Institute, medical costs per claim in Pennsylvania were typical with other states included in a 14-state study. This was a result, researchers said, of lower costs per claim for services billed by physicians and hospitals and higher costs per claim for services billed by chiropractors and physical therapists compared to the median study state.
The study, CompScope(TM)
Medical Benchmarks for Pennsylvania, 9th Edition, reported that the lower physician and hospital costs per claim were driven by lower-to-typical prices paid to physicians and lower payments per service for hospital outpatient services. Higher costs per claim for services billed by chiropractors and physical/occupational therapists, on the other hand, stemmed from higher utilization of these services due to more visits per claim offset by typical prices paid. Payments for services by chiropractors and physical occupational/therapists accounted for 13 percent of total medical dollars paid for claims with more than seven days of lost time in 2006-07.
Study highlights. Among the highlights of the study, WCRI researchers found that:
- More claims received services in a hospital outpatient setting. The study found that in Pennsylvania more claims received clinic/evaluation and management (office visits), physical therapy (modalities and procedures), and minor radiology (X-rays) services in a hospital outpatient setting than in the other study states. Researchers said this might suggest that more routine procedures were delivered in a hospital outpatient setting in Pennsylvania than were provided by nonhospital providers in other states.
In addition, the study noted that more frequent use of hospital outpatient services may mean that physicians and physical/occupational therapists might have billed more often for their services under hospital ownership in Pennsylvania than in the typical state.
- Average medical costs per claim was low. Although more care was delivered in a hospital outpatient setting, WCRI found that the average medical cost per claim in Pennsylvania was substantially lower than other study states. For example, medical costs per claim for operating/treatment/recovery room services were 41 percent lower than the typical state, major radiology services (MRIs and CT scans) were 20 percent lower, and minor radiology services (X-rays) were 18 percent lower. Researchers said overall lower payments per claim were primarily driven by lower payments per service. Services per claim were generally typical of the study states.
- Medical costs have increased. Medical costs per claim in Pennsylvania continued to grow in 2006-07 by 11 percent. The 8 percent growth for nonhospital providers during this time period was driven mainly by an increase in utilization for services billed by physicians and chiropractors. On the other hand, researchers said hospital outpatient payments per claim were not a significant cost driver in the latest year.
- Inpatient payments per episode have increased significantly. The study noted that in 2006-07, the average hospital inpatient payment per episode increased significantly, although the median or typical payment per episode showed little change. Researchers said the average payment per episode is very sensitive to the number of episodes and length of stay. Hence, the median or typical payment per episode is a more meaningful measure to observe changes in the trend.
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October 1, 2009 Copyright 2009© LRP Publications
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