WCRI: Same procedures often cost more in WC than group health
"Policymakers looking to contain medical costs in these states may want to ask if the difference is necessary to induce hospital outpatient departments to treat injured workers," said Richard Victor, executive director of the Workers Compensation Research Institute. The report, Comparing Workers' Compensation and Group Health Hospital Outpatient Payments, is the first to compare hospital payments for the same surgical procedures when paid for by group health vs. workers' comp.
The researchers analyzed 2008 data from 16 states: California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. The services included were the most commonly used outpatient surgeries in workers' comp to treat shoulder and knee conditions.
In two-thirds of the states studied, workers' comp payments were higher than those paid by group health. However, in a few states, the average payments for the workers' comp procedures were actually lower than for group health.
"Two states, Virginia and Florida, had workers' comp hospital payments nearly double or more [than] those of group health for shoulder and knee surgical episodes," the authors wrote. "In contrast, two states, Massachusetts and California, had workers' comp hospital outpatient payments at least 16 percent (or $1,117) and up to 45 percent ($2,202) below group health for common shoulder and knee surgical cases."
The workers' comp payments exceeded group health payments by the most in states where the price regulations were based on a percent of the hospital's charges or had no hospital price regulation. "Payment systems that tie payments to hospital charges are vulnerable to the hospital's charging practices, which can vary substantially within markets as well as across states, and may result in charges well in excess of costs," the study says.
For shoulder surgeries, Virginia, Florida, and Illinois paid the highest workers' comp reimbursements compared to group health rates while Massachusetts, California, and Michigan actually paid less than for group health. Knee surgeries cost the most to the workers' comp systems in Virginia, Florida, and Louisiana compared to the group health rates while Massachusetts, California, and Pennsylvania paid less. Michigan was the only state where the workers' comp and group health payments for knee surgeries were the same.
"Overall, the workers' comp percentage difference over group health hospital payments demonstrated a substantial interstate variation, ranging from 45 percent below group health in Massachusetts to 116 percent in Virginia," the study said.
By Nancy Grover
Read more at the WorkersComp Forum homepage.
July 29, 2013
Copyright 2013© LRP Publications