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.
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.
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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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