Reports reveal cost drivers, state differences in comp medical costs
The Workers Compensation Research Institute examined and compared medical cost drivers and trends for 16 states in its CompScope Medical Benchmarks, 13th Edition.
Here is a snapshot of the findings.
California. With the 2012 legislative reforms just starting to be implemented, the findings for California should serve as a baseline to measure the effectiveness of the changes.
Among the findings were:
- Medical payments per claim were fairly typical of the study states but grew rapidly since 2005. However, while prices for professional services were lower than the typical state, utilization of nonhospital services was higher due to more visits per claim and more complex services billed. Hospital outpatient and/or ambulatory surgical center costs were lower, but California had more frequent use of chiropractic care and nonhospital physical therapist services.
- Medical legal expenses per claim in California were among the highest of the study states. The authors suggested the rapid growth from 2004 to 2010 may relate to increasing disputes over medical treatment and utilization review denials. At nearly $2,600 per case, the average medical legal expense per claim in California was 80 percent higher than the 16-state median for 2008 claims with 36 months of experience.
- More claims received services from chiropractors and physical therapists in a nonhospital setting than in most of the study states.
Indiana. The lack of a fee schedule may account for many of the major findings, suggest the authors. The 8 percent growth rate of medical payments per claim from 2005 to 2010 was among the highest of the study states, driven primarily by prices and payments for hospital inpatient care. Helping to offset the higher prices somewhat was a lower to typical utilization of medical care.
Payments per claim for hospital outpatient care grew at 8.6 percent annually from 2005-10 with increases in payment per services being the driving factor. Increases of 5 to 10 percent per year for key outpatient services were seen while the number of hospital outpatient services per claim changed little.
Prices paid for nonhospital services rose 33 percent from 2002 to 2011 "like most states with no price regulation," according to the study. Payments for nonhospital providers grew 7 percent per year from 2005-10, driven by a growth in prices.
"States like Indiana that had no fee schedule tended to have higher prices and faster rates of price growth than states with fee schedules," the researchers wrote. "From this, policymakers may conclude that a fee schedule could restrain medical cost growth."
Massachusetts. Regulatory changes, especially mandatory utilization review, were cited as a reason for the state's relatively low utilization of medical services. Massachusetts had lower overall medical payments per claim with more than seven days of lost time compared with the typical study state in 2010, evaluated in 2011.
"Policymakers and other public officials may want to know how Massachusetts achieved lower than typical utilization of medical services despite the relatively lower prices paid compared with many study states," the report says. "The main reason for the lower use of medical services in Massachusetts is likely related to regulations. Mandatory utilization review has been in place in Massachusetts since the reforms in 1993."
Also noteworthy in Massachusetts were payments for inpatient hospital episodes, which decreased 4 percent from 2005 to 2010. In contrast, it grew 36 percent in the median state.
"What caused the stable trend in hospital payments per inpatient episode in Massachusetts?" the study asks. "Most likely the reimbursement approach that Massachusetts adopted has helped stabilize the hospital payments."
The poor return-to-work outcomes for spinal fusion surgeries were cited by system participants as a reason for the state's lower percentage of claims with services delivered in an inpatient setting, including surgery.
The reforms of 2001 and 2005 impacted the findings for Texas, the researchers said. Medical payments per claim in Texas had been the highest of the study states prior to the reforms. However, they were stable for 2010 injuries evaluated as of 2011.
The prices paid increased in 2010 due to a fee schedule update in 2010. However, they were offset by a decrease in utilization in most services. Also contributing to the stabilization in 2010 was the continued decrease in hospital inpatient episodes, especially those with surgery.
"A combination of factors, such as the mandatory use of treatment guidelines and utilization review, the introduction of certified networks, preauthorization for physical and occupational therapy services, and an increased payer focus on utilization, led to a large decrease in the utilization of nonhospital care. However, Texas was still higher than typical for some metrics, such as chiropractic use, office visits, and neurological/neuromuscular testing."
The percentage of claims involving chiropractic care in Texas was 16 compared with the median state's 5 percent. The number of visits per claim for chiropractic care, however, continued to decrease in 2010 and was down to 13 visits per claim.
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April 1, 2013
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