Do Higher Fee Schedules Increase the Number of Workers’ Compensation Cases?

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This WCRI study―Do Higher Fee Schedules Increase the Number of Workers’ Compensation Cases?―shines a light on an issue that policymakers and other system stakeholders might not be thinking of, which is that physicians may call an injury work-related in order to receive a higher reimbursement for care he or she provides to the patient.

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Policymakers have always focused on the impact fee schedules have on access to care as well as utilization of services. This study shines a light on an issue that policymakers and other system stakeholders might not be thinking of....

A new study―Do Higher Fee Schedules Increase the Number of Workers’ Compensation Cases?―from the Workers Compensation Research Institute (WCRI) explores to what extent higher workers’ compensation reimbursement rates influence the medical provider classification of an injury as work-related or not. Currently, 43 states have physician fee schedules that set maximum prices for health care providers to be paid, and the established fee schedule rates vary widely across states.

According to previously published WCRI research, in many states, workers’ compensation pays higher prices than group health. For example, one study found that in some states, workers’ compensation prices were two to four times higher than group health prices. Moreover, in most states, workers’ compensation systems rely heavily on the treating physician to determine whether a specific patient’s injury is work-related or not.

”Policymakers have always focused on the impact fee schedules have on access to care as well as utilization of services. This study shines a light on an issue that policymakers and other system stakeholders might not be thinking of, which is that physicians may call an injury work-related in order to receive a higher reimbursement for care he or she provides to the patient,” said Dr. Olesya Fomenko, the author of the report and an economist at WCRI.

The following are among the study’s findings:

  • If the cause of injury is not straightforward (e.g., soft tissue conditions), case-shifting is more common in the states with higher workers’ compensation reimbursement rates. In particular, the study estimated that a 20 percent growth in workers’ compensation payments for physician services provided during an office visit increases the number of soft tissue injuries being called work-related by 6 percent.
  • There was no evidence of case-shifting from group health to workers’ compensation for patients with conditions for which causation is more certain (e.g., fractures, lacerations, and contusions).

This analysis relies principally on workers’ compensation and group health medical data coming from a large commercial database. This database is based on a large national sample of patients where the data were provided by health insurers and self-insured employers. It includes individuals employed by mostly large employers and insured or administered by one of approximately 100 group health plans. The database is unique in that, for a given employee, it shows whether a given medical encounter (visit) was paid for by group health or workers’ compensation.

For more information about this study or to purchase it, visit http://www.wcrinet.org/studies/public/books/do_higher_fs_increase_wc_cases_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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since: 06/2011
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