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Medical Fee Schedule Dilemma – WCRI Study – High Cost States Have None

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Medical Fee Schedule Dilemma – No Schedule Means Higher Costs Now and In Future

The WCRI (Workers Compensation Research Institute) just released a study pointing out a medical fee schedule dilemma.   The states that still hold on to the old U&C (Usual and Customary) method of charging for workers’ compensation treatment are costing employers dearly.

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Public Use License – Trianthom

According to the WCRI

The study, WCRI Medical Price Index for Workers’ Compensation, 11th Edition (MPI-WC), found that prices paid in states with no fee schedules for professional services were 39 to 171 percent higher than the median of the study states with fee schedules in 2018. WCRI also found that medical prices in most states with no fee schedules grew faster than in states with fee schedules — the median growth rate among the non-fee schedule states was 34 percent from 2008 to 2018, compared with the typical growth rate of 6 percent among the fee schedule states.

OK, so let us look at what WCRI has proffered in this study.

  • At a minimum, the services were 39% higher in states with the medical fee schedule dilemma.
  • Some states are priced at 171% higher.
  • The non-fee schedule states’ medical costs grew at an almost 600% faster rate.

I have not fully read the study.  I have written on fee schedules so many times that if you go to the bottom of this article and click on the category fee schedule, you will have more than enough material to assess whether a medical fee schedule saves employers premiums and self insureds their insurance budgets.

Look a the bolded numbers again.   Those are not small numbers.   States such as Tennessee, Indiana, and Virginia have all decided to take the plunge and enact fee schedules.   What do you think happened to those states’ medical costs for workers’ compensation?   Yes, they have reduced their spending.

WCRI Comprehensive Study Details

This annual report focuses on professional services billed by physicians, physical therapists, and chiropractors. The medical services fall into eight groups: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological and neuromuscular testing, pain management injections, and emergency care.

The 36 states in the study, which represent 88 percent of the workers’ compensation benefits paid in the United States, are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Get Your Free, yes freebies copy here.

I am going to read the study over the weekend and report back on it next week to see which states actually are having a workers’ comp medical fee schedule dilemma.

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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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