Florida Workers' Compensation Costs Per Claim Growing Following Declines Generated by 2003 System Reforms

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Workers’ compensation costs per claim in Florida, which dropped in the year following system reforms in 2003, showed signs of growth from 2005 to 2009, according to a new study, CompScope™ Benchmarks for Florida, 12th Edition by the Workers Compensation Research Institute (WCRI).

Average Defense Attorny Payment Claim Highier In Florida Than Many Other States

Average Defense Attorny Payment Claim Highier In Florida Than Many Other States

Frequency of defense attorney involvement rose steadily from 2005 to 2009, at one to two percentage points per year, likely related to the steady growth in the frequency of claims with lump-sum settlements after 2005.

Workers’ compensation costs per claim in Florida, which dropped in the year following system reforms in 2003, showed signs of growth from 2005 to 2009, according to a new study, CompScope™ Benchmarks for Florida, 12th Edition by the Workers Compensation Research Institute (WCRI).

The WCRI study found that the average indemnity cost per claim – payments for lost wages, loss of earning capacity, or permanent impairment or disability – rose three percent per year after decreases of more than 20 percent due to reforms related to permanent disability benefits.

Part of the moderate growth in indemnity costs per claim came from wage growth; and another part was driven by increase in lump-sum frequency and growth in the average lump-sum payment per claim.

At the same time, medical costs per claim in Florida continued to increase rapidly for most cases in 2009, the most recent study year. For all paid claims and medical-only claims, the average medical cost per claim grew seven percent and 10 percent in 2009 respectively.

Medical costs per claim in Florida grew 5-6 percent per year starting in 2005, following one-year of stabilization due to the fee schedule reforms. A main driver of the growth in medical costs per claim in 2005 was price increase for chiropractors and physical/occupational therapists, resulting from a fee schedule increase. From 2006 to 2008, growth in the average payment per service for hospital outpatient services was a driver of the growth in medical costs per claim.

The study also noted the frequency of defense attorney involvement rose steadily from 2005 to 2009, at one to two percentage points per year, likely related to the steady growth in the frequency of claims with lump-sum settlements after 2005. The average defense attorney payment per claim in Florida grew 12 percent in 2009.

Click here for more information about this study or to purchase it.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Since 1983, WCRI has been a leader in providing high-quality, objective information about public policy issues involving workers' compensation systems. For more information, visit: http://www.wcrinet.org

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Andrew Kenneally
Workers Compensation Research Institute
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