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Claims costs have stabilized, return-to-work rates have improved, and access to care for injured workers is better, the report says. While it's still unclear whether certified workers' comp health care networks are having a positive impact, the DWC is pleased overall with the latest results.

"Since the passage of H.B. 2600 in 2001 and H.B. 7 in 2005, the workers' comp system has changed significantly and continues to show signs of progress," the report says. "Improvements in system outcomes have helped reduce workers' comp insurance costs in Texas since 2005, which has resulted in more employers participating in the workers' comp system in Texas."

Medical costs. Utilization of medical services provided to injured workers was blamed for Texas having some of the highest average medical costs per claim in the nation. Additionally, employees had poorer return-to-work outcomes and dissatisfaction with medical care.

In 2001, lawmakers enacted a variety of reforms to address the problems. Four years later, H.B. 7 included passage of a new health care delivery model, workers' comp health care delivery networks.

The impact of the networks is unclear and mixed, which the authors say is due to the fact that it's too early in the process. The latest reform legislation also included treatment guidelines, certain statutory preauthorization requirements for physical and occupational therapy, and a new pharmacy closed formulary.

The average medical cost per claim has decreased in Texas "despite continued medical inflation," according to the report. Where the cost was $2,987 in 2002, it dropped to a low of $2,532 in 2006.

"The reduction in the total amount of medical payments made in the system between 2002 and 2006 can be attributed mostly to fewer claims being filed, as well as lower utilization of specific types of services. Greater scrutiny on certain types of services through the mandatory preauthorization of physical and occupational therapy services has led to an estimated 12 percent reduction in professional services costs per claim from 2005-2008," the report says.

The average medical cost per claim has "recently begun to increase after several years of declines, but is still relatively stable compared to the double-digit increases in medical costs that the system was experiencing in the late 1990s," the report says.

Additional changes. A significant decline in the percentage of active physicians who treated workers' comp claims followed the first Medicare-based professional services fee guideline enacted in 2003 after a court battle. However, the passage of tort reform legislation that same year led to more physicians setting up practices in Texas, which "has resulted in a stable number of physicians treating workers' comp claims since 2005," according to the report.

Prior to the reforms, injured workers in Texas were typically off work for longer periods of time than those in other states. The report says there has been steady improvement in the percentage of injured employees who have returned to work within six months and remained employed for at least three successive quarters.

The TDI-DWC recommends the Texas Legislature modify the statutory authority for the designation of a statistical agent to collect workers' comp data. "Given stakeholders' interests in aligning workers' comp data collection requirements across states and the creation of national standards for the reporting of claims, income benefit, proof of coverage, and medical billing and payment data, TCI-DWC is interested in having the flexibility to determine whether it is more cost-effective to collect data in house or utilize a data collection/statistical agent to collect needed data," the report says.

Read more at the WorkersComp Forum homepage.

February 3, 2011

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