Medical Prices for Injured Workers Were Lower and Grew Slower In States with Medical Fee Schedules, Says New WCRI Study

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The prices paid for medical professional services for injured workers were lower and growing slower in states with price regulations in the form of professional fee schedules as compared with states that do not have them in place. This is according to a new 31-state study, Medical Price Index for Workers' Compensation, Seventh Edition (MPI-WC), released today by the Workers Compensation Research Institute (WCRI).

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Sample chart from the report.

Increasing costs for medical care for treating injured workers have been a focus of public policymakers and system stakeholders.

The prices paid for medical professional services for injured workers were lower and growing slower in states with price regulations in the form of professional fee schedules as compared with states that do not have them in place. This is according to a new 31-state study, Medical Price Index for Workers' Compensation, Seventh Edition (MPI-WC), released today by the Workers Compensation Research Institute (WCRI).

“Increasing costs for medical care for treating injured workers have been a focus of public policymakers and system stakeholders. This study will help them 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 Rebecca Yang, a senior public policy analyst at WCRI and an author of the study. “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 for a similar set of professional services varied significantly across states, ranging from 33 percent below the 31-state median in Florida to 124 percent above the 31-state median in Wisconsin in 2013.
  •     Medical professional prices in states with fee schedules were relatively lower—the prices paid in states with no fee schedules were 27 to 139 percent higher than the median of the study states with fee schedules.
  •     Growth in prices paid for professional services exhibited tremendous variation across states, spanning between negative 20 percent in Illinois and positive 28 percent in Wisconsin over the time period from 2008 to 2014.
  •     States with fee schedules experienced slower growth in prices paid for professional services compared with most states with no fee schedules—the median growth rate among the fee schedule states was 6 percent from 2008 to 2014 compared with the median growth rate of 17 percent among the non-fee schedule states.

The MPI-WC tracked medical prices paid for professional 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.

The 31 states included in the MPI-WC, which represent nearly 85 percent of the workers' compensation benefits paid in the United States, are Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Click on the following link to download a free copy of this report:
http://www.wcrinet.org/studies/public/books/wcri618.pdf
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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. 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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