NCCI Study on Home Health Services and Skilled Nursing Facility Report Worth A Look
I came across this report last week from NCCI, authored by Nedzad Arnautovic. Home health services and skilled nursing facility costs become a large percentage of almost all major workers comp claims.
Claims adjusters, risk and safety managers need to pay attention to this study. To obtain a copy of the Home Health Services and Skilled Nursing Facility Study, click here – worth a read and just over 10 pages long. I will cover the most surprising part of this study and report towards the end of this article.
This report examines recent trends in the use of home health and skilled nursing services in workers compensation claims. It highlights significant differences in expected accident year costs when segmented by claim size and injury type. The report also compares the cost of home health and skilled nursing services to indices published by the US Bureau of Labor Statistics and evaluates the effectiveness of home health fee schedules.
Key Findings
<I bolded a few passages to show a few interesting facts on an area that seems to be overlooked until the bill arrives from the provider. This report will definitely aid in setting reserves.>
- The projected share of home health services and skilled nursing facility costs in workers compensation for Accident Year (AY) 2024 varies significantly by size of claim and severity of the injured worker’s medical condition. More costly claims incur significantly greater home health and skilled nursing costs.
- For claims with incurred costs between $250K and $500K one year after injury, the projected home health share of medical costs is 2.0% and 1.1% for skilled nursing
- For claims exceeding $1M, the projected home health share of medical costs is 20.1% and 5.3% for skilled nursing
- For all claims, the AY 2024 home health projected share of total medical costs is 2.0% and for skilled nursing it is 0.8%.
- Since the start of the COVID-19 pandemic in 2020, the average cost per claim for home health services has grown comparable to the US Bureau of Labor Statistic’s Producer Price Index (PPI) for this service. During that same period, costs for skilled nursing have outpaced the PPI by a wide margin.
- Several states have home health fee schedules with varying hourly rates for certified nurse assistants (CNAs), licensed practical nurses (LPNs), and registered nurses (RNs). Based on a review of home health data across a sample of states with home health fee schedules, over half of services are paid above the fee schedule amount.
Home Health Services Surprising Number
From the preceding paragraph, – 50%+ of home health services were invoiced at a higher rate than the respective state fee schedule.
I have been a big proponent of workers comp fee schedules for years as a cost-saving measure and a reserving aid for claims adjusters.
The following table explains some of the reasons for the 50% figure. I will speak with a few adjusters over the coming weeks and update this article if I see a pattern.
If you think you know the reason for the 50%+ number, please email me or comment below. This was a great study by NCCI on an overlooked subject.
