Prices Paid for Injured Workers’ Medical Care in 35 States Examined in WCRI Study

As policymakers and system stakeholders in many states debate rising medical costs, the Workers Compensation Research Institute (WCRI) released a new study today that helps monitor changes in prices paid for medical professional services as well as the impact of fee schedule and network changes on price trends.

The study, WCRI Medical Price Index for Workers’ Compensation, 10th Edition (MPI-WC), compares medical prices paid in 35 states and tracks price changes in most states over a 10-year span from 2008 to 2017 for professional services billed by physicians, physical therapists, and chiropractors. The medical services fall into eight groups: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological testing, pain management injections, and emergency care.

“If you are a policymaker or other stakeholder and want to understand how medical prices in workers’ compensation in your state compared with other states, or how prices in your state changed over time, you would benefit from this study,” said Ramona Tanabe, WCRI’s executive vice president and in-house counsel. “If you are in one of the many states that implemented fee schedule changes recently or are considering such changes in the future, this study shows how certain policy initiatives impact medical prices.”

The following is a sample of the study’s findings:

  • Prices paid for a similar set of professional services varied significantly across states, ranging from 26 percent below the 35-state median in Florida to 158 percent above the 35-state median in Wisconsin in 2017.
  • States with no fee schedules for professional services had higher prices paid compared with states with fee schedules—39 to 168 percent higher than the median of the study states with fee schedules in 2017.
  • Changes in prices paid for professional services exhibited variation across states, spanning between a 17 percent decrease in Illinois and a 39 percent increase in Wisconsin over the time period from 2008 to 2017.
  • Most states with no fee schedules experienced faster growth in prices paid for professional services compared with states with fee schedules—the median growth rate among the non-fee schedule states was 30 percent from 2008 to 2017, compared with the median growth rate of 6 percent among the fee schedule states.
  • This study also discussed the price trends in a number of states with major fee schedule changes, namely Arizona, California, Colorado, Illinois, Kentucky, Massachusetts, North Carolina, and Texas.

The 35 states included in the MPI-WC, which represent 87 percent of the workers’ compensation benefits paid in the United States, are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

The authors of this study are Dr. Rebecca Yang and Dr. Olesya Fomenko. Click on the following link to download a FREE copy of this report:

The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers’ compensation systems.

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