Louisiana: Injured workers' time off the job driving higher comp costs
Injured employees in Louisiana are off the job longer than most states and its driving an increase in workers' compensation costs per claim, according to a study.
The Workers Compensation Research Institute found that the length injured workers spent off the job in Louisiana resulted in higher-than-typical indemnity benefits per claim than in the other 15 states examined in the study. Specifically, the study found that injured workers in Louisiana were off work 34 weeks on average -- nine to 10 weeks longer than Massachusetts and Pennsylvania, and 15 weeks longer than Michigan. This was true, researchers said, even though the workers' weekly benefits were capped at lower levels in Louisiana.
WCRI said these findings combine to raise questions about whether the Louisiana system can be improved for both workers and their employers.
Among the highlights of the study, researchers found that:
- RTW may be impacted by poor health and education. Indemnity benefits per claim with more than seven days of lost time were 36 percent higher than the typical study state as a result of a longer duration of temporary disability. According to the study, some system stakeholders in Louisiana have suggested that the longer duration of temporary disability may partly reflect the difficulty of return to work given the poorer health status and lower educational attainment of the state's population. Researchers said national measurements also support this concern. In addition, the study noted that system features also likely contributed to the longer duration, particularly the complexity and length of the dispute resolution process.
- Medical costs were higher than typical. Medical costs per claim in Louisiana were 20 percent higher than in the typical study state, the result of higher utilization and higher nonsurgical prices paid. In addition, the duration of medical treatment was 6.5 weeks (16 percent) longer than in the median study state.
Despite little change in the medical fee schedule rates since 1994, researchers said the 2006 medical fee schedule in Louisiana was higher than the median of 42 states with fee schedules for all service groups except surgery. Payments per claim for hospital outpatient services also were higher than the median study state, the study noted. Hospital inpatient payments per claim, however, were lower compared to other study states.
- Costs to manage claims among highest of study states. This included, researchers said, higher than average medical cost containment expenses per claim, defense attorney payments, and medical-legal expenses per claim. In particular, WCRI reported defense attorney payments per claim with more than seven days of lost time were the highest among the 15 study states, at an average of nearly $6,500 per claim with defense attorney payments greater than $500. Researchers said this finding suggests that dispute resolution may be more complex or prolonged in Louisiana than in the other states in the study.
Read more at the WorkersComp Forum homepage.
September 13, 2010
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