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Indiana Rate Increase = Sharp Increase In Medical Costs

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Medical Cost – Indiana Rate Increase of 5%

The Indiana rate increase in medical cost should come as no surprise. Yesterday, I posted on the increase in Indiana’s advisory rates of 5%.  I had actually written the article under the impression that the lack of a fee schedule was to blame for the increase.

Graphic of Percentage and Red Arrow Indiana Rate Increase Medical Cost
(c) 123rf.com

I was right as NCCI has said the increase was due to a striking increase in medical costs in Indiana.  The adoption of a fee schedule would eventually turn the tide on the medical costs in the state.  As I have posted often, any Workers Comp changes will affect a state gradually over the next four years.  There are no quick overnight fixes in Workers Comp.

The changeover would not take that long nor be that complicated as they could use a good fee schedule such as Tennessee’s and just add in a factor due to different economies of scale in each state.

One of their neighboring states, Illinois, had installed a fee schedule a few years ago.  The last recommendation from NCCI that was accepted by Illinois was a  3.8% cut in rates.  Tennessee saw a 5% cut.

The reason for a smaller decrease in Illinois was the fee schedule has not had time to fully work itself into their WC system.  Additionally, IL used what I would call an artificial fee schedule at the very beginning of the switch.

There may be an excellent reason that Indiana does to want a fee schedule for Workers Comp such as a large medical lobby, or wanting to be totally independent.  Saving their employers WC $ is obviously not one of the goals.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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