An analysis of costs per claim and other performance indicators across 18 state workers compensation systems for claims through March 2020 for injuries up to and including 2019 show stable to modest increases, according to a series of reports released Thursday by the Workers’ Compensation Research Institute.
The Cambridge, Massachusetts-based institute said that studies include experience on claims at the very beginning of the COVID-19 pandemic, resulting in a “good baseline” for future evaluation of the impact of the virus on workers comp claims.
The data studied includes the average total cost per claim, the average payment per claim for medical care, and the average payment per claim for indemnity benefits. The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin. There are individual reports for every state except Arkansas, Iowa and Tennessee.
Highlights of the reports include:
- In California, total costs per claim with more than seven days of lost time have been mostly stable since 2010. In 2019, the most recent year in the study period, total costs per claim increased 4%, which was largely driven by a 6%increase in indemnity benefits per claim.
- In Florida from 2014 to 2018, total costs per claim with more than seven days of lost time had been growing moderately at 4% per year at all claim maturities. In 2019 and 2020, this measure increased 8%, driven by faster growth in indemnity benefits and medical payments per claim in the latest 12-month valuation. Growth in costs per claim in Florida since 2014 was faster than in most states.
- In Georgia, total costs per claim with more than seven days of lost time have remained fairly stable since 2008 and were higher compared with other study states. Higher indemnity benefits per claim and litigation expenses per claim in Georgia were the main drivers of the higher-than-typical total costs per claim.
- In Illinois, total costs per claim with more than seven days of lost time have grown between 1% and 3% per year since 2012, based on claims with 12 to 48 months of maturity. This growth reflects small increases in medical payments per claim, indemnity benefits per claim, and benefit delivery expenses per claim.
- In Indiana, total costs per claim increased 3% per year from 2014 to 2019 for claims with more than seven days of lost time at 12 months of experience. Those results, however, mask underlying changes from 2014 to 2016 in the key cost components — medical, indemnity, and benefit delivery expenses, or expenses for managing medical costs and litigation expenses allocated to claims — all related to provisions of House Enrolled Act 1320.
This article was first published in Business Insurance.