Slow Growth in Texas Workers’ Compensation Claims, Says WCRI Study

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A recent study, CompScope™ Benchmarks for Texas, 15th Edition, released by the Workers Compensation Research Institute (WCRI) found the total average cost per claim for injured workers in Texas was among the lowest of the 17 states in the report.

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Medical costs were the focus of the 2005 reforms, which impacted both prices and utilization. With one exception, our study probably reflects the full effect of that legislation.

A recent report by the Workers Compensation Research Institute (WCRI) found workers’ compensation claims in Texas grew more slowly than in most of the other study states examined. The total average cost per claim for injured workers in Texas was among the lowest of the 17 states in the study.

The study, CompScope™ Benchmarks for Texas, 15th Edition, found costs per claim grew 2.5 percent per year from 2008 to 2013, as measured in 2014. Depending on the year, different factors helped restrain growth. Indemnity claims and benefit delivery expenses grew more slowly in Texas than in nearly all other states WCRI studied. Medical payments per claim grew about 4 percent per year, just slightly faster than the typical state.

Medical payments per claim accounted for more than 70 percent of the growth in total claim costs across the five years the study looked at, largely due to rapid growth in nonhospital (professional) prices paid.

According to the study, changes in the components of indemnity claims drove trends in that area, including wages of injured workers and the duration of temporary disability. The study said these trends were most likely related to the effects of the recession and recovery.

Medical cost containment expenses drove the increase in benefit delivery expenses since 2011 and may reflect, in part, the elimination of voluntary networks in 2011. The study’s author said it may have changed the frequency and average payment for components of medical cost containment expenses.

“Medical costs were the focus of the 2005 reforms, which impacted both prices and utilization,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “With one exception, our study probably reflects the full effect of that legislation.”

The exception, Tanabe said, was the impact of a closed formulary for pharmaceuticals, which was effective September 1, 2011, for new claims and September 1, 2013, for claims occurring prior to September 1, 2011. There, the study only observed partial effects from the change.

For information about this study or to purchase a copy, click on the following link: http://www.wcrinet.org/studies/public/books/BMcscope_multi15_TX_book.html.

The Cambridge-based WCRI is recognized as a 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. 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
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