N.C. Workers' Compensation Hospital Outpatient Payments Stable After 2009 Reforms, But May Be A One Time Effect, New WCRI Study Says

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The study by the Cambridge, Mass.-based Workers Compensation Research Institute (WCRI) reported there was virtually no change in the average hospital outpatient payment per service in 2010, following growth of about 12 percent from 2008 to 2009. However, the study observed that the stability may be a one-time effect.

Doctor examining an x-ray image.

Doctor examining an x-ray image.

Charges increased at a rate much faster than cost-savings estimates anticipated. Over time, this could affect the impact of the fee schedule reduction.

Payments for hospital outpatient services to treat injured workers in North Carolina stabilized, following reforms passed to reduce outpatient hospital costs. However, ongoing growth in charges could mean resumption of growth in payments, according to a new study of medical costs in the state’s workers’ compensation system.

The study by the Cambridge, Mass.-based Workers Compensation Research Institute (WCRI) reported there was virtually no change in the average hospital outpatient payment per service in 2010, following growth of about 12 percent from 2008 to 2009. However, the study observed that the stability may be a one-time effect.

The WCRI study, CompScope™ Medical Benchmarks for North Carolina, 13th Edition, said despite the slower growth, hospital outpatient payments per claim in North Carolina were among the highest of the 16 study states.

The reforms enacted in 2009 reduced the reimbursement rate for hospital outpatient services. Effective July 27, 2009, the outpatient fee schedule was reduced to 79 percent of charges from 95 percent for most hospitals.

The study noted the average charge per service for hospital outpatient care continued to grow rapidly, up 11 percent in 2010, and nearly 19 percent in 2009.

“Charges increased at a rate much faster than cost-savings estimates anticipated,” said Ramona Tanabe, WCRI’s deputy director and counsel. “Over time, this could affect the impact of the fee schedule reduction because a lower percentage of a higher charge would be less likely to achieve the state’s cost-savings goal.”

The WCRI study also found medical payments per claim fell 5 percent in North Carolina in 2010, mainly driven by decreases in hospital inpatient frequency and payments, along with decreases in utilization of nonhospital care. This decrease was more than in any other study state.

For more information about this report or how to purchase it, click on the following link: http://www.wcrinet.org/result/csmed13_NC_result.html.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. WCRI was founded in 1983 and is recognized as a leader in providing high-quality, objective information about public policy issues involving workers' compensation systems. 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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