National Medical Price Index Is A Poor Measure Of Workers’ Compensation Price Inflation In Most States

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Unlike the consumer price index for medical care (CPI-M), which measures general prices paid for medical services, WCRI’s Medical Price Index for Workers' Compensation, Fifth Edition (MPI-WC) focuses only on the prices paid for the medical care that injured workers receive under their state’s workers’ compensation system.

Chart for WCRI’s Medical Price Index for Workers' Compensation, Fifth Edition (MPI-WC)

Chart for WCRI’s Medical Price Index for Workers' Compensation, Fifth Edition (MPI-WC)

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 if they are rising rapidly or relatively slowly.

The national medical price index is a poor measure of workers’ compensation price inflation in most states, says a new 25-state study from the Workers Compensation Research Institute (WCRI) that was released today.

Unlike the consumer price index for medical care (CPI-M), which measures general prices paid for medical services, WCRI’s Medical Price Index for Workers' Compensation, Fifth Edition (MPI-WC) focuses only on the prices paid for the medical care that injured workers receive under their state’s workers’ compensation system.

The CPI-M for professional services poorly tracked the workers’ compensation price trends for states with fee schedules. For states with no fee schedules, growth in CPI-M was fairly similar to workers’ compensation price trends.

“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 Dr. 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.”

The following are among the study’s findings:

  •     Prices paid were higher in states with no fee schedule regulations for professional services as compared with fee schedule states.
  •     There were more variations in prices paid across states for major surgeries than for primary care services.
  •     Prices grew more rapidly over the study period in states with no fee schedules compared with states with fee schedules.
  •     In states with fee schedules, changes in actual prices paid followed changes in fee schedules.
  •     Prices paid for services not covered by fee schedules grew more rapidly compared with services covered by fee schedules.

This report includes 25 large states that represent nearly 80 percent of the workers’ compensation benefits paid in the United States and covers 11 years from 2002 to 2012 for nonhospital, nonfacility services billed by physicians, physical therapists, and chiropractors. The medical services fall into eight major groups: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological and neuromuscular testing, pain management injections, and emergency care.

Click on the following link to download a free copy of this report: http://www.wcrinet.org/studies/public/books/wcri_mpi_5_final.pdf.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Founded in 1983, the WCRI is recognized as a leader in providing high-quality, credible, and objective information about public policy issues involving workers' compensation systems. WCRI's diverse membership includes 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. For more information, visit: http://www.wcrinet.org.

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