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.
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:
- New Hampshire
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.
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.
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.
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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