Illinois Workers’ Compensation Fee Schedule Changes Result in Lower Prices Paid; Costs of Medical Payments Decreasing, Says New Study

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The report, Benchmarks for Illinois, CompScope™ 14th Edition, finds medical payments per claim, for claims with more than 7 days of lost time, decreased five percent in 2011. The study reports the decline likely reflected the early impact of the 30 percent reduction in fee schedule rates for medical services.

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The study will help policymakers and other stakeholders to observe and evaluate key metrics of system performance change in Illinois and compare this with the expectations and goals for the reforms.

The costs of medical care to treat injured workers in Illinois are declining, the result of regulatory change enacted in 2011, according to a new study by the Workers Compensation Research Institute (WCRI).

The report, Benchmarks for Illinois, CompScope™ 14th Edition, finds medical payments per claim, for claims with more than 7 days of lost time, decreased five percent in 2011. The study reports the decline likely reflected the early impact of the 30 percent reduction in fee schedule rates for medical services.

“The study will help policymakers and other stakeholders to observe and evaluate key metrics of system performance change in Illinois and compare this with the expectations and goals for the reforms,” said Ramona Tanabe, WCRI’s deputy director and counsel.

In particular, prices paid for professional services to physicians, physical/occupational therapists, and chiropractors were directly affected by the reduction in the fee schedule rates, declining 24 percent between 2010 and 2012.

Prices paid for all types of services fell in Illinois, including office visits, major surgery, physical medicine, pain management injections, and minor radiology, according to the study.

The study also noted medical cost containment expenses per claim, such as the costs of bill review, case management, and utilization review, rose moderately at five percent in 2011 after little change in the prior year.

The 2011 reforms also focused on some of the large cost drivers behind wage replacement payments—indemnity benefits—particularly the duration of temporary disability, by setting limits on the duration of benefits for carpal tunnel injuries and wage differential benefits.

In the years prior to the enactment of the reforms, the study found that the duration of temporary disability rose rapidly in Illinois, from 16 weeks in 2006 to 21 weeks in 2009, propelling growth in indemnity benefits per claim. Future analysis will determine whether the reforms achieved the intended results.

WCRI also reported that medical-legal expenses per claim grew much faster in Illinois than in most of the other states in the 16-state study, likely because Illinois does not regulate payments for independent medical examinations, which were used frequently prior to 2011 as part of the utilization review process.

Click on the following link to purchase this study: http://www.wcrinet.org/studies/public/books/BMcscope_multi14_IL_book.html.

The Cambridge-based WCRI is recognized as the leader in providing high-quality, objective information about public policy issues involving workers' compensation systems.

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 catalyst for significant improvements in workers' compensation systems around the world with its objective, credible, and high-quality research. WCRI's members include employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia and New Zealand.

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Andrew Kenneally
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