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Workers Comp Medical Network Penetration Increases Utilization Costs


Workers Comp Medical Network Penetration Means Higher Use – NCCI Study

A recent NCCI Study indicates that a higher Workers Comp medical network penetration rate results in a higher rate of utilization.   Check out the study here on their website.   The study reads as a little complicated, but bear with the study.  The details are worth the read and your patience.   (NCCI > National Council on Compensation Insurance).

Woman with book Workers Comp Medical Network studying at desk in library

Blog and newsletter readers will benefit from reading the whole study and drawing conclusions from it.  NCCI verified what I had been saying for over a decade.  When the prices of workers comp treatment decrease, such as an adjustment in a state fee schedule, utilization increases.

The definition of network utilization is the quantification or description of the use of services by persons for the purpose of preventing and curing health problems, promoting maintenance of health and well-being, or obtaining information about one’s health status and prognosis.

The focus word here is quantity.

Previous Studies Had Same Conclusion  

Many articles have appeared in J&L’s blog over the years on this subject.   I have performed studies for physical therapy groups, medical networks, carriers,  TPA’s and investment groups on the use of medical networks.  One of the by-product conclusions was that utilization offsets price when comparing the two variables.

According to NCCI – 

…a higher proportion of in-network claims in a state relates to comparatively greater utilization of services for in-network claims. In turn, this associates greater network penetration with greater utilization of services to treat in-network claims, compared with out-of-network claims.

Missouri Has Highest Network Use At Highest Cost??

Let us see each state’s Workers Comp medical network penetration rates.  One of the more interesting states in the below chart is Missouri.   Last week, J&L produced an article on the extremely high costs of medical care in the Show Me State.  Missouri has the highest use of medical networks in the nation.   Why are the costs so high if the Missouri medical network penetration rate is the highest?

My best estimate would be that the medical costs are so high in Missouri (304% above the median state) that the medical network price may still be high.  The use of the medical network is very high due to carriers and employers attempting to reduce medical costs.  The graph below and the one in the previous article on Missouri medical costs point this out exactly.

Graph of NCCI Chart Workers Comp Medical Network Penetration
(c) NCCI – All Rights Reserved – click chart for higher resolution

Click the chart for a better resolution.  The bubble charts on pages 28 and 29 of the NCCI study on workers comp medical network penetration summarize the points very well.


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6 Responses

  1. I cannot see the chart very well. Do you have a better copy? I would like to start my own study on this information. Can you point me to a good source?

  2. Does your site have a contact page? Iâm having problems locating it but, Id like to shoot you an e-mail. I’ve got some creative ideas for your blog you might be interested in hearing. Either way, great website and I look forward to seeing it expand over time.

  3. Judi, I am referring to NCCI’s study statistics. I have performed quite a few private studies for medical providers that I cannot publish. The bottom line conclusion says that the more a medical provider incurs discounts, the more they see the patient. I am not referring to any type of dishonesty. NCCI agrees with what I have been saying in my articles for over 10 years.

  4. Marylou,
    The graphic in this article is a thumbnail. If you click on the graphic, it will pop out and be very readable. You may want to try the NCCI or the WCRI website for more studies in this area. Some of the organization’s material is free. You may also search our website by using the search box on any blog or landing page to find more information. Thanks for asking about more information.


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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