Emergency room costs in comp on rise: Report

The increase in facility costs for hospital emergency room visits has “significantly” outpaced medical inflation, with facility costs growing approximately three times faster than the hospital outpatient producer price index, according to an analysis of workers compensation emergency room costs released Friday by the National Council on Compensation Insurance.

The Boca Raton, Florida-based ratings agency said in its report that some states have fewer cost-containment measures, such as fee schedules, and that could be a reason emergency room costs are increasing faster. Of the 38 jurisdictions in which NCCI provides ratemaking services, 34 have physician per-service fee schedules, whereas only 23 have outpatient facility per-service fee schedules, according to the report.

Transportation costs associated with emergency room visits are also on the rise, with payments for ground or air transportation for emergency services accounting for more than 75% of total medical transportation costs, and the average payment per episode for ambulances increasing steadily since 2013, according to NCCI.

Another emergency services trend noted in the report relates to the ages of injured workers: while the percentage of emergency room visits by injured workers under the age of 35 is greater than the percentage of those workers in the workforce, an aging workforce may put upward pressure on emergency room costs. This is likely because workers 55 years or older have on average 25% higher costs for medical treatment when compared to those younger than 55, according to NCCI.

Another “distinguishing characteristic” of emergency room costs is whether the visit results in a surgery, according to the analysis. More than 10% of visits to the emergency room involve a same-day surgery; such visits cost about 2.6 times that of nonsurgical visits and account for more than 25% of total emergency room costs. The analysis also showed that approximately 70% of emergency room visits requiring surgery involve only minor procedures, such as sutures, incisions and injections, NCCI said in its report.

Meanwhile, major surgery such as an amputation averages almost $7,500 — more than three times the cost of a minor surgery emergency room visit, according to the report.

This article was first published in Business Insurance.

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