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NCCI Workers Comp Medical Cost Discovery – PHC Best Measurement


New NCCI Workers Comp Medical Cost Discovery – One To Definitely Download and Read

A new NCCI Workers Comp medical cost discovery was met with a suspicious eye by me.   Then again, the study, summary, and whitepaper came from the venerable organization.   NCCI (National Compensation Council Inc) is headquartered in Boca Raton Florida.   The NCCI rates approximately 40 states in one form or another.

Hand Holding NCCI Workers Comp Medical Cost Wallet Full Of Money

The article on the medical cost inflation comparisons can be found here.   The full whitepaper is located here.   You can download the whitepaper from that link – PDF file.

The three medical cost inflation measures are:

  1. CPI – Consumer Price Index
  2. PPI- Producer Price Index
  3.  PHC – Personal Health Care

Medical costs have long been a thorn in the side of many workers compensation programs.   In the old days, the Indemnity Benefits dominated the payouts on workers comp claims.  That day, however, has long since passed – sometime in the late 1990’s.   Medical costs dominate the benefit payments.  I see no end to this trend.

The measurement from the Bureau of Labor Statistics (BLS) and graphed by NCCI shadows Workers Comp costs very closely.

BLS NCCI Workers Comp Medical Cost Chart
Copyright NCCI with deference to the BLS

If one compares the two columns on the right, the similarities are very stark.   From the summary and the whitepaper, I gathered that the main reasons for the similarities are:

  1. Utilization is measured more accurately
  2. Year over year estimates more accurately represent the changes in treatment and utilization
  3. The PHC consists of variables that come very close to Workers Comp

I may have over-generalized the comparisons.  You may want to download the whitepaper provided by NCCI.  Please see the above links.

According to NCCI , the stakeholders in the Workers Comp can benefit from using this new measurement –

  • Carriers, TPA’s, Self Insured employers – can use to set reserves and to negotiate with medical providers
  • Regulators – able to keep tabs on medical costs , better method of monitoring why medical costs need to change over time
  • Employers – to see why loss costs change over time
  • Employees – assist with providing proper access to WC medical care

If the NCCI workers comp medical cost measurements change in the near future, I will repost on the subject.

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One Response


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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