Louisiana Workers’ Compensation Costs per Claim Higher Than Other States and Growing Faster Than Many, WCRI Study Finds

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This study helps policymakers and other system stakeholders identify current cost drivers and emerging trends in indemnity benefits, medical payments, and benefit delivery expenses in Louisiana.

Sample chart from study.

Sample chart from study.

Total costs per claim with more than seven days of lost time were higher in Louisiana than other study states and also growing faster than many states.

Workers’ compensation total costs per claim in Louisiana were the highest in a recent study of 18 states conducted by the Workers Compensation Research Institute (WCRI).

"Total costs per claim with more than seven days of lost time were higher in Louisiana than other study states and also growing faster than many states," said Ramona Tanabe, WCRI’s executive vice president and counsel.

The study, CompScope™ Benchmarks for Louisiana, 18th Edition, found the average total cost per workers’ compensation claim in Louisiana rose 4–10 percent per year since 2012 at claim maturities from 12 to 48 months. Increases occurred in all three major cost components of a workers’ compensation claim: medical payments, indemnity benefits, and benefit delivery expenses.

"The 4.4 percent annual growth rate in Louisiana from 2012 to 2016 for claims at 12 months of experience was faster than the rate in the median state at 2.9 percent per year," said Tanabe.

Growth in indemnity and medical costs both drove the increase in Louisiana’s average total cost per workers’ compensation claim from 2011 to 2014 for claims at 36 months of experience, accounting for fairly similar shares of the growth, at 40 percent and 37 percent, respectively.

For the study, WCRI analyzed workers’ compensation claims with experience through 2017 for injuries up to and including 2016, and, in some cases, a longer time frame was used to supply historical context.

The following are among the study’s other findings:

  • Higher and growing hospital outpatient payments per claim were an important driver of higher-than-typical medical payments per workers’ compensation claim in Louisiana.
  • Benefit delivery expenses in Louisiana were among the highest of the 18 states studied, notably for payments to defense attorneys.
  • Duration of temporary disability accounted for part of the Louisiana trend in indemnity benefits per claim, increasing about one week since 2011 at all claim maturities. Duration was 9 to 16 weeks longer in Louisiana than in other states with a wage-loss benefit system.
  • Lump-sum settlements were also an important factor in indemnity costs per claim and cost growth.

For more information or to purchase a copy of this report, visit https://www.wcrinet.org/reports/compscope-benchmarks-for-louisiana-18th-edition.

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 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 - WCRI
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