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Physician Fee Schedules NCCI Conducts 31 State Study

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Physician Fee Schedules Studied By NCCI

The National Council on Compensation Insurance (NCCI) recently published two studies on the effects of fee schedules on physician charges.   These were supposedly the first studies that analyzed this specific type of data.  However, the Workers Compensation Research Institute (WCRI) has performed similar studies.  The WCRI analyzes different data sets than NCCI.

The first study analyzed physician costs with the introduction of fee schedules for Tennessee and Illinois only. No other states were analyzed in the first study.

Clock and book Physician Fee Schedules illustration
Wikimedia Commons – Gentaur

The second study was an analysis of the physician charges for any fee schedule changes in 36 states. NCCI is the rating bureau for 36 states.  Those states are listed at the end of this article.  The NCCI assists in ratemaking for most of the aforementioned states along with other services.

Unfortunately, there are still five states reporting to NCCI that still do not have a fee schedule.

They are:

  • Iowa
  • Indiana
  • Missouri
  • New Hampshire
  • Virginia

The data for both studies is based on the information the carrier’s report on NCCI on employers in each of the 31 states.  The data is reported to the carrier for each insured employer in the 31 states on at least an annual basis.

First Study

There were predictions that Tennessee and Illinois would experience tremendous cost savings by instituting fee schedules.  The first NCCI study affirmed this conclusion.

According to NCCI:

  • Tennessee, the price level declines in excess of 7 percent, and the annual rate of inflation lessens by 0.3 percentage points.
  • Illinois, the price level drops by slightly more than 5 percent and the annual rate of inflation decreases by 0.6 percentage points.

These are significant savings without having to do more than enact a fee schedule.  The states without fee schedules for Workers Compensation should look at these numbers closely.

Second Study

The conclusions drawn from the second study were a little more vague than the first:

  • Utilization index by month was developed
  • Price inflation of medical services provided by physicians in the context of workers compensation tends to fall short of the rate of price inflation of the Medical Care component of the Consumer Price Index.
  • A lowering of price did not result in an over-utilization.
Picture of Physician Fee Schedules NCCI
StockUnlimited

The third bullet would be expected as physicians are not usually the medical providers that over-utilize their services when experiencing price cuts.   Services such as physical therapy have shown some tendencies for over utilization as a response to lowering rates for their services.

The study covered these states:
AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, MD, ME, MO, MS,
MT, NC, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, TX, UT, VA, and VT

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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