Maryland: Workers' comp medical costs per claim among lowest of states in study
According to the report, by the Cambridge, Mass.-based Workers Compensation Research Institute, the overall fee schedule rate in Maryland was among the lowest of the 42 states with workers' comp fee schedules, even after fee schedule increases in 2006. Despite the lower fee schedule rates, researchers said Maryland workers still reported generally typical access to and satisfaction with care. As a result, the workers' comp system provided both workers and employers a better-value proposition compared to most other states studied, WCRI said.
The study noted that lower prices paid for nonhospital services and typical utilization of most nonhospital services were among the drivers of lower medical costs per claim.
Researchers found that:
- Indemnity benefits increased rapidly in 2007. Payments per claim for lost wages, known as indemnity benefits, with more than seven days of lost time jumped 10 percent in 2007. Researchers said this was due mainly to increases in average duration of temporary disability and average weekly wage.
- Lump-sum payments jumped in 2007. Lump-sum payments per claim also grew rapidly in 2007 in both early and mature claims.
- Legal expenses were higher than other states. Litigation expenses in Maryland were higher compared to the typical study state. Researchers said this was likely a result of the "dueling doctor" approach used in determining permanent partial disability benefits.
Despite the most frequent use of medical-legal services among study states, the average medical-legal expense per claim in Maryland was typical compared to many other states. Also, defense attorneys were involved most often in Maryland, but the study found that the average defense attorney payment per claim was the lowest of the 15 states.
Drugs slightly higher.
In a separate study, WCRI found that the cost per claim for prescription drugs used to treat injured workers in Maryland was slightly higher than in most states. The 16-state study found that the average payment per claim for prescription drugs in the Maryland workers' comp system was $441 -- 7 percent higher than the median of the study states.
Researchers said prices paid to pharmacies in Maryland were similar to those in the median state, as was utilization of prescription drugs, measured by the average number of pills per claim and the average number of prescriptions per claim with prescriptions. Prescription costs per claim might have been lower, the study noted, but for higher priced physician dispensing.
The report found that some Maryland physicians dispensed prescription drugs at their offices. This occurred in 47 percent of claims with prescriptions and accounted for 24 percent of all prescriptions paid under workers' comp. Physicians who dispensed prescriptions were paid higher prices than if the same prescription was filled at a pharmacy. Among the most commonly used prescription drugs, the largest price differential was for Carisoprodol, a muscle relaxant. The average price per pill paid for the drug was $2.59 when the prescription was filled at a physician's office, nearly four times what would be paid if the same prescription was filled at a pharmacy ($0.67). On average, physician-dispensers were often paid about 20 to 70 percent higher than pharmacies for the same drugs.
Researchers said financial incentives may help explain a higher utilization of the drugs that had a higher price differential. For example, 8 percent of the workers in Maryland received Carisoprodol compared to 4 percent in the median state. The average Maryland worker received 3.5 prescriptions for Carisoprodol and 161 pills per claim, compared to 2.7 prescriptions and 124 pills per claim for the same drug in the median state.
Read more at the WorkersComp Forum homepage.
July 12, 2010
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