Though Workers’ Compensation Medical Costs per Claim Remain High In New Jersey, Rate of Growth Has Slowed

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A recently released study, CompScope™ Medical Benchmarks for New Jersey, 15th Edition, from the Workers Compensation Research Institute (WCRI) can can help policymakers and other stakeholders in New Jersey identify current cost drivers and emerging trends in payments, prices, and utilization of medical services among nonhospital and hospital providers in the state's workers' compensation system.

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Medical payments per claim grew less than 3 percent per year from 2010 to 2012―about half the annual rate of the prior three years.

Workers’ compensation medical costs continued their relatively slow growth in New Jersey for the second year in a row, according to a recent study by the Workers Compensation Research Institute (WCRI).

The report, CompScope™ Medical Benchmarks for New Jersey, 15th Edition, found medical payments per claim grew less than 3 percent per year from 2010 to 2012―about half the annual rate of the prior three years.

The study cited changes in both key components of medical payments per workers’ compensation claim: the price paid for each service rendered and the number of services performed in each claim (generally called utilization).

The study found a decrease or little change in utilization of many nonhospital services─a key factor in the recent slower growth in medical costs because payments for nonhospital care accounted for roughly two-thirds of medical payments in New Jersey. Slower growth in hospital outpatient payments per service was also a factor. Payments for hospital inpatient treatment continued to rise though.

The recent trends coincided with an increase in the use of networks in caring for injured workers. States that do not regulate reimbursements for medical care through a traditional fee schedule (like New Jersey) often use medical networks to help control medical costs through the management of claims and negotiated payment discounts.

Despite the recent slower growth, medical payments per claim in New Jersey remained higher than most of the 16 states WCRI studied, primarily due to higher prices paid for medical care.

In several states, WCRI researchers saw slowdowns in claims growth similar to what they found in New Jersey, namely growth of 3 percent or less from 2010 to 2012, after growth of 4 to 8 percent a year, on average, from 2007 to 2010. Reasons for the slowdown differed by state, the study said.

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

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The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. 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.

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Andrew Kenneally
Workers Compensation Research Institute
+1 (617) 661-9274 Ext: 257
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since: 06/2011
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