The Workers Compensation Research Institute's fifth edition of its Medical Price Index for Workers' Compensation shows prices paid were higher and grew more rapidly in states that did not have fee schedules.
The report compares medical costs for nonhospital, nonfacility services among 25 states that represent 80 percent of the workers' comp benefits paid in the U.S. from 2002 through 2012. The study looks at prices, although not utilization.
"This study is designed to help public policymakers and system stakeholders understand how prices paid for medical professional services for injured workers in their states compare with other states and know if prices in their state are rising rapidly or relatively slowly," said Richard Victor, executive director of WCRI. "They can also learn if the reason for price growth in their state is part of a national phenomenon or whether the causes are unique to their state and hence, subject to local management or reform."
Of the 25 states, six did not have fee schedules as of 2012 -- Indiana, Iowa, Missouri, New Jersey, Virginia, and Wisconsin. Among all 25 states, Wisconsin had the highest overall costs. Other findings included:
- Prices paid were higher in the states without fee schedule regulations for professional services. In five of the no-fee schedule states, the prices paid for professional services were 25 to 67 percent higher than the median of the study states with fee schedules. Wisconsin's prices were more than twice the median of the study states with fee schedules and about 50 percent higher than the median of the study states without fee schedules.
- Prices paid for major surgeries varied widely. The average prices paid were more than 100 percent higher in the states among the highest compared with the 25-state median. New Jersey and Wisconsin were the highest while Florida, Michigan, and South Carolina were among the lowest.
- Prices grew faster over the 11-year study period in the states without fee schedules. The average prices paid in Indiana, Iowa, Missouri, New Jersey, and Virginia increased 26 to 37 percent compared with a median growth rate of 13 percent for the study states with fee schedules. Wisconsin saw the most rapid growth among all 25 states with a 55 percent increase during the 11 years.
- Among the 19 fee schedule states, changes in prices paid were related to changes in fee schedules. States that did not change fee schedules saw prices remain relatively stable. However, where there were changes to fee schedules, changes in actual prices paid were seen.
- Among fee schedule states, prices for services that were not covered by the fee schedules grew more rapidly compared with services that were covered.
The study closely examined prices in Illinois after the 2011 fee schedule reform that resulted in decreased fee schedule rates across all types of services. While the prices paid in Illinois were still relatively high after the reforms were implemented, they did decrease. For example, the average price paid for major surgeries was nearly two and a half times the 25-state median before the reforms but was just under two times the 25-state median after the reforms.
Read more at the WorkersComp Forum homepage.
July 8, 2013
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