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Price Impact – Workers Comp Fee Schedules WCRI Blogging Live

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Workers Comp Fee Schedules WCRI Blogging Live

Workers Comp Fee schedules have long been discussed in this blog.  One of the best methods for a reduction in the premium employers pay for WC is by instituting or modifying fee schedules.

Vector Of Blogging Workers Comp Fee Schedules On Globe Icon
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Workers Comp Fee schedules are a balancing act.  A fee schedule set too high means it will be basically ineffective.   A fee schedule set too low will heavily affect access of care.

Barry Lipton – Practice Leader and Senior  Actuary NCCI – Price Impact of WC Physician Fee Schedules

Even with discounts, the WC fees may not be a great reduction when compared to group health insurance:

  • One fourth of WC payments are 30%  more below the Maximum Allowable Rate (MAR)
  • One fourth of general health payments are 63% or more below the MAR

Fee schedules influence more than just the small portion of charges that exceed MAR

Fee schedules may have the unintended consequences  of increasing some payments

A discount from a fee schedule amount does not ensure a competitive price. 

To determine the effectiveness of fee schedules, it is important to consider market rates.

 

Woman Workers Comp Fee Schedules Calculating Bills
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Perverse Effect Of Fee Schedules That Are Too Low

Do states that have low WC prices which pay lower than group health cause access to medical care complications?

42 states in US have fee schedule, 6 states have fee schedule rates below group health for intermediate physician office visits.

WC office visits in lower fee schedule states

  • usually bill as more complex office visits
  • physician-dispensed medications

From a California study, when the physician fee schedules are frozen,  then unfrozen, then frozen again, the physician stopped (while unfrozen) bill complex office visits.   When the fee schedule was frozen again, the physicians began billing for more complex office visits.

Radiological studies  that were reduced by fee schedules resulted in most billings for unscheduled services as the hospital would receive 75% of charges. (Florida Study).  Scheduled radiology was paid at a much-reduce fee due to the 2003 reforms.

Treatment and billing practices were changed to sustain revenue such as medical providers increasing the number of services and the intensity of the services.

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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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