Researchers found that total costs per all paid claims were 30 percent lower in Minnesota and were 14 percent lower than the typical or median study state in claims with more than seven days of lost time. Indemnity benefits -- payments per claim for lost wages -- were 27 percent lower in Minnesota than the median study state and a major factor in the lower costs per claim. Researchers attributed this to effective return-to-work practices and fewer cases receiving permanent partial disability benefits or lump-sum settlements.
The study, Benchmarks for Minnesota, CompScopeTM 10th Edition, provided a comparison of the workers' comp systems in 15 states on key performance measures such as benefit payments and costs per claim, timeliness of payments, and defense attorney involvement by analyzing a similar group of claims and adjusting for interstate differences in injury mix, wage levels and industry type.
Among the highlights of the study, WCRI researchers found that:
- Workers returned to work faster than in most states. Fewer workers were off the job for at least one week -- 17 percent in Minnesota compared to 19.5 percent in the 15-state median.
The average duration of temporary disability was also shorter -- 14 weeks on average in Minnesota for 2005 claims at an average 36 months of experience, nearly three weeks shorter than in the median study state.
- Statutory benefits were not lower in Minnesota. Even though Minnesota uses a different approach for setting the maximum weekly benefit, researchers said statutory benefits were not lower. The maximum weekly benefit is established by statute and increased periodically.
- Percentage of PPD/lump-sum claims was major contributing factor. The average PPD/lump-sum payment per claim in Minnesota was typical of many study states, but researchers noted that the percentage of PPD/lump-sum claims was the lowest (10 percentage points lower than typical) among the study states.
Areas of concern. Not all the findings were positive. While WCRI found that expenses per claim for delivering medical and income benefits to injured workers were 18 percent lower in Minnesota, researchers said this result helped mask other factors.
Defense attorney payments per claim, for example, were among the highest of the 15 study states. Researchers said this finding likely reflects the complex informal dispute resolution system in Minnesota, which features a variety of informal activities and specialized issue-oriented forums. Attorneys may not be involved in cases at some stages, but when involved, the complex, multilevel informal dispute resolution system likely requires more defense attorney hours, resulting in higher-than-typical defense attorney payments per claim.
The study also noted that while the use of vocational rehabilitation in Minnesota was more frequent than the study states, it was also more costly. Nearly 17 percent of claims with more than seven days of lost time had vocational rehabilitation services in Minnesota, compared to 3 percent in the typical study state. However, the average cost of vocational rehabilitation provider services was highest in Minnesota -- at an average of about $6,100 per claim with these services.
Researchers also highlighted the impact of rising medical costs, which have increased 9 percent from 2006 to 2007, evaluated as of March 2008. This was cited as the key driver in total costs per claim in Minnesota for claims with more than seven days of lost time at an average of 12 months of experience. These costs increased 8 percent in 2007 after several years of more moderate growth.
Read more at the WORKERSCOMP ForumTM homepage.
March 8, 2010
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