Free Workers Comp Study – Best Report on Medical Costs WCRI

May 21, 2020 By JL Risk Management Consultants

Free Workers Comp Study – WCRI Medical Price Index – A Great Reference Tool

WCRI (Workers Compensation Research Institute) released its annual free workers comp study and report on medical prices for the treatment of Workers Compensation injuries.

picture of free workers comp study and beer

Wikimedia Commons – JP

Please see the bottom of this article for the link to the free report.

The breadth and depth of the report astound me as a free publication. The report covers over 88% of the medical benefits paid in the US. If you are looking for trending information, the study spans 12 years (2008 – 2019).

WCRI only asks that you give them your contact info. The group does not spam you after sign-up. Claims staff could use it as a basis for setting reserves with very little extrapolation of the provided numbers and statistics. (Hint)

From WCRI:

This annual study creates an index for the actual prices paid for professional services over a 12-year span from 2008 to 2019 based on a market basket of commonly used services for treating workers with injuries. This study also provides a baseline for policymakers and other system stakeholders to observe any effects the current COVID-19 pandemic might have on medical prices in workers’ compensation across states and over time.

The study focuses on professional services (evaluation and management, physical medicine, surgery, major and minor radiology, neurological and neuromuscular testing, pain management injections, and emergency care) billed by physicians, physical and occupational therapists, and chiropractors. It shows how prices paid for these services compare across states, how the prices have changed, and whether price growth is part of a broader phenomenon or unique to a state. The study also discusses the price comparison results and price trends in relation to the principal policy mechanism for regulating prices—fee schedules.

These states covered 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.

I am downloading the free workers comp study and report as soon as I publish this article at this link.

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WCRI Prior Recession Report – The COVID-19 Economic Recovery

March 18, 2020 By JL Risk Management Consultants

WCRI Prior Recession Report Shadows The COVID Economic Situation

WCRI Prior Recession Report and COVID comparison

Public Use License – See prior graphic

Dr. Savych has published many reports on the post-return-to-work attitudes of injured employees.

I received this email today from WCRI. The report may be worth a look. WCRI also offers a free medical pricing report that will pop up when you go to their website.

At the same time, these measures are expected to be of limited duration and the economy may rebound quickly after the restrictions are lifted. Longer-term unemployment may be limited due to the possible quick turnaround, though this observation is tempered by the possibility that the temporary closures will remain permanent for some businesses. So, the results of the WCRI study summarized below, while instructive, hopefully, will have limited applicability to the current situation.

Recession, Fear of Job Loss, and Return to Work – The study is located here.

The study identifies two different channels of the impact of a recession on return to work of those injured at work:
• Direct effect: Workers seeking to return to work might find that job opportunities are scarcer and that return to work is delayed.
• Indirect effect: Workers may fear job loss if they do not return to work, so they may try to hasten that return to work.

The study used WCRI’s Worker Outcomes Surveys prior to the Great Recession to evaluate how variations in the local unemployment rate affect return to work of those injured at work through the two channels identified above. The workers in these surveys were out of work due to injury for more than 7 days, a group more likely to feel the impact of a recession on return to work. The study asked what would be the impact on longer-term unemployment of doubling the unemployment rate from 5 to 10 percent. Longer-term unemployment is defined as not returning to work within 2.5 years after injury.

The study showed:

Vector wcri prior recession report Growth graph

StockUnlimited

• Direct effect: Doubling the unemployment rate increases the percentage of injured workers experiencing longer-term unemployment from 14.7 percent to 18.7 percent due to lack of available job opportunities.

• Indirect effect: At the same time, doubling the unemployment rate increased the percentage of workers fearing job loss when injured from 35.5 percent to 51.3 percent. This increased fear of job loss resulted in an increase in the percentage of injured workers avoiding long-term job loss of 1.6 percentage points. This offsets the direct effect of the unemployment rate increase.

The net effect of an increase in the unemployment rate from 5 to 10 percent is to increase longer-term unemployment from 14.7 percent to 17.1 percent, or 16 percent.

The study also considers other scenarios where the impact of a recession on the fear of job loss and resulting worker response is even greater than measured in the data (perhaps because the data were collected prior to the Great Recession). In these scenarios, the probability of longer-term unemployment increases to a lesser extent than the net effect described above.

Usefulness

business strategy wcri prior recession report transparent board

StockUnlimited

The report may be useful to those who are trying to predict the impact of the current recession on return-to-work interventions and outcomes, as well as on workers’ compensation claims and costs—especially for income benefits. It may also be relevant for predicting the impact of an economic recovery. As the economy strengthens and the unemployment rate falls, there will be more job opportunities, less fear of job loss, and perhaps less aggressive efforts by injured workers to seek reemployment.

Key findings:

Workers who are afraid of being fired are less likely to become longer-term unemployed after an injury. These workers may be more aggressive in seeking return-to-work opportunities, making an extra effort to return to work earlier or to take steps to increase their chances that their job will exist after return to work.
Injured workers in areas with unemployment rates that are rising or that are higher than normal for the area are more likely to fear losing their jobs. The greater the fear, the more likely it is that workers will more actively pursue returning to work, thus reducing the number of workers that experience longer-term unemployment.

Recession, Fear of Job Loss, and Return to Work. Richard A. Victor, Bogdan Savych. April 2010. WC-10-03.

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WCRI Annual Conference 2020 – Aging Workforce Claims

March 5, 2020 By JL Risk Management Consultants

How Injuries, Claims and Outcomes Change with Age – Dr. Bogdan Savych

Baby boomers for Aging Workforce climate action

Wikimedia Commons – Takver

The age distribution of the workforce is projected to change in the next 10 years. The large cohort of baby boomers will have largely retired, shifting the age distribution toward younger workers.

In this session, we will help frame the potential impact of this shift on the workers’ compensation system by providing a multi-dimensional picture of how claim characteristics and outcomes vary with age. In particular, we will examine how injury rates, claim costs, contributors to claim costs (such as utilization of medical care, and duration of disability), and outcomes differ by age.

Questions Addressed:

How do rates of non-fatal and fatal injuries vary by age? Do the events causing injury differ by age?
How do medical and indemnity payments per claim vary by age and are these variations related to the different injuries sustained by workers of different ages?
How do worker outcomes—such as return to work, access to care, and satisfaction with care—vary by age

Presentation

In 2030 over 20% of the workforce will be Senior Citizens

BLS > Older workers are more likely to remain working > 12% over 75 years old

65+-Year-old workers are among the least injured age groups

Older workers are more likely to have falls, slips, and trips.

Sprain type injuries are very low for 65+ age group

Cut injuries decrease with age

Hip, upper extremity and leg fractures increase with age

Medical payments increase with age for claims with more than 7 days lost time

Neurological injuries (very expensive) increase with age then decreases at about 50+ years

Indemnity payments decrease at 55 years+ with the lowest for 65+ age group

Pre-injury weekly wages decrease sharply for 65+ age group

Variation in Outcomes by Age

65+ age group possess a larger amount of comorbidities > as expected

65+ age group had fewer problems receiving provider services

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WCRI Aging Worker Injury Study versus My Assumptions – Who Wins?

December 20, 2019 By JL Risk Management Consultants

WCRI Aging Worker Injury Study Goes Up Against My Assumptions From Experience

Andy over at WCRI was kind enough to provide me with a recent Flash Report to read over. The WCRI aging Worker injury study covers many of the subjects I have noticed in Workers Comp claim with aging worker injuries. Let us compare my study – that I l kept in my head to the study.

vector graphic human body WCRI Aging Worker injury study

Creative Commons License 3.0 – OpenStax College

Dr. John Ruser (WCRI CEO) and Dr. Bogdan Savych performed the analysis. If you have not read any of Dr. Savych’s studies on what happens to injured employees AFTER a claim is over, you are missing out on groundbreaking info that may cause you to handle your claims or employees differently. Trust me, those studies are worth the purchase and read.

A 17-year-old study may experience a few changes to its conclusions. I will keep it as general here as possible.

NCCI has written a few studies on the aging workforce. I may circle back to their studies next week.

My Assumptions on the WCRI Aging Worker Injury Study

In 2002, I had written a report for a physical therapy firm that was attempting to find out if aging workers required any more or different types of physical therapy modalities.

For clarification, I assumed an aging worker at 62 years and older, the initial Social Security retirement age.

My discoveries were:

Older workers did not have a higher rate of injury – they were more careful and followed safety directions
Older workers as expected did have a longer healing period
Their motivation for return to work was much higher – very loyal employees
#3 above equalized #2 – older workers worked with their injuries even if on a Temporary Partial basis.
Falls were the number one cause of injury
Overall, the risk of hiring an aging worker was no more than the general public.

Recent WCRI study

I am going to quote out of their press release. Dr. John Ruser (who is a great person) made these comments:

“Our goal is to help system stakeholders consider possible challenges from changes in the age distribution of the workforce,” said John Ruser, president and CEO of WCRI. “This includes both the aging of the workforce and the entry of smaller groups of younger workers. Readers can use this information to create a balanced picture of how multiple metrics of workers’ compensation performance differ by age and how these metrics may vary with changes in external age-related factors shaping the population and the labor force.”

Aging workers recovered slightly slower, but not enough to cause a concern
The return to work period for older workers is not longer than the average injured worker
Falls were #1 cause of injury – when I reached 55, my family Dr. gave me the falls at home are the #1 injury by people over 55. I felt older that day.
#6 in my assumptions can be left to interpretation by reading the full study.

Good to Agree With WCRI

We were in agreed on most of the aging worker variables and comparisons. WCRI goes much further into the analysis. If you handle aging worker claims or are a risk manager with aging workers – the study is worth the more than reasonable $15. When you go to the WCRI website, they will also offer you a Medical Price Index study freebies. Check it out. At the end of the study, the injury rates by ages are broken down into every category one can think of in Workers’ Comp.

To learn more about this study or to purchase a copy, visit https://www.wcrinet.org/reports/wcri-flashreport-how-do-claim-costs-components-of-costs-and-worker-outcomes-differ-by-age

Even though my report was 17 years old, I think it agreed overall with the WCRI Aging Worker Injury Study.

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Breaking – Pharmaceutical Study – WCRI Covers Trends In 27 States

June 27, 2019 By JL Risk Management Consultants

WCRI Pharmaceutical Study Shows Decreased Use In Almost 27 States

WCRI (Worker’s Compensation Research Institute – Boston, MA_ just released a vast pharmaceutical study that covered trends in 27 states.

workers comp pharmaceutical study pic biogesic

Wikimedia Commons Psiĥedelisto

One of the authors was Dr. Vennela Thumula. I have had the pleasure of speaking with her at length concerning some of the studies at the yearly WCRI conference.

PBM (Pharmacy Benefit Management) remains a hot topic in Worker’s Comp arena over the last 10 years with costs spiraling out of control. The opioid epidemic reached far into work comp medical cost considerations.

From WCRI –

Workers’ compensation prescription drug payments per medical claim decreased by 15 percent or more in 25 of 27 study states over a three-year period from the first quarters of 2015 to 2018.

That equates to a massive reduction in pharmacy spend from in the three year period covered by the study. A 15% reduction was tabulated in approximately 93% of the states covered by WCRI.

From WCRI –

The following are among the study’s findings:

Once prominent in some states, compounds now account for a very small percentage of prescription payments in most states.
The payment shares for opioids declined in all 27 study states to varying degrees.
Dermatological agents have become more prominent in many states. Payment shares increased by more than 10 percentage points in 8 of the study states, led by Pennsylvania with a 23 percentage point increase and Illinois with a 21 percentage point increase.
Twelve of 27 states experienced modest increases of at least 3 percentage points in payment shares for anticonvulsants.
The payment shares for musculoskeletal therapy agents and NSAIDs changed little over the study period in many states

One negative outcome would be the decrease in NSAIDs which have shown to be just as effective as opioids in pain reduction.

The 27 states in the study are Arkansas, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

To learn more about this pharmaceutical study or to purchase a copy, visit https://www.wcrinet.org/reports/wcri-flashreport-interstate-variation-and-trends-in-workers-compensation-drug-payments. The authors of this study are Dr. Vennela Thumula, Te-Chun Liu, and Dr. John Ruser.

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High Health Insurance Deductibles Cause Case Shifting – WCRI Study

February 21, 2019 By JL Risk Management Consultants

Larger Health Insurance Deductibles Cause Employees To Use Workers Comp

The health insurance deductibles have been raised over the past few years. One reason could be the Obamacare Federal and State Insurance Exchange insurance carriers wish to negate the effect of having to insure all-comers with pre-existing conditions.

Wikimedia Zeurgezi

A recent study by WCRI (Workers Compensation Research Institute) showed that higher health insurance deductibles led to case shifting. WCRI has covered case shifting before in various studies and their annual conference.

Case shifting occurs when an injured employee looks to lessen their risk by shifting an injury from one line of insurance (usually health) to workers compensation.

The recent study results from WCRI on health insurance deductibles and case shifting recent press release covered a few salient points.

The following is a sample of the study’s major findings:>>>my comments in italics

Workers with a higher remaining group health deductible at the time of injury are more likely to file under workers’ compensation than under group health insurance.>>>This should be seen as not really a surprise.

Injured workers are about 1.4 percentage points more likely to file a workers’ compensation claim when they have a remaining deductible of $550 (the average) compared with a zero deductible at the time of injury, amounting to a 5.3 percent increase in the workers’ compensation claim volume.>>>A deductible of $550 seems low nowadays

The increase in propensity to file for workers’ compensation coverage in response to higher deductibles is even greater for injured workers with soft tissue conditions.>>>This is a very interesting finding.

The increase in filing for workers’ compensation coverage is concentrated in states where employees can choose their initial provider. This may reflect the ability within workers’ compensation of workers to remain with their group health doctor in these states.>>>This makes sense. I totally agree with that assessment.

The study also estimated the increase in workers’ compensation volume from the growth in high deductible group health policies. The increase partially offsets the overall decline in workers’ compensation claims seen over the past decade.

You can found out more information on the study and purchase a copy here. A video from one of the authors explaining the study further is also included on the page.

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WCRI Chart ASCs vs. Hospitals Shows Interesting 18 State Comparison

December 14, 2018 By JL Risk Management Consultants

WCRI Chart On ASC Studies Shows Need For Fee Schedules in Workers Compensation

A recent WCRI Chart (Workers Compensation Research Institute) pointed out a hidden result that was picked up at least partially by a few bloggers. The chart below comes from a study the WCRI released on November 25th.

WCRI Chart ASC Hospital Comparison 18 State Study

An attempt was made to make the chart as readable as possible. Two areas came to light after examining this WCRI chart. Two anomalies – one more pronounced than the other – became apparent very quickly.

Wisconsin, Virginia, and Lousiana all had outpatient hospital fees above $10,000
Indiana had ASC fees that were significantly above the outpatient hospital fees – a very rare occurrence

According to the WCRI article, the end of the study period was in 2016. The particulars of the study and how to access the study are provided later in this article.

For reference – ASC is the acronym for Ambulatory Surgical Centers – standalone surgical centers.

Hospital Outpatient Fees > $10,000

The comparison WCRI chart data, therefore, included no data after Virginia enacted their fee schedule. Wisconsin still has no fee schedule. Virginia decided to institute a fee schedule after 2016. No fee schedule causes more payouts for medical treatment. (Why?)

The Workers Comp systems in Virginia and Wisconsin base their costs and Usual and Customary – the acronym is U&C. No set payment can be anticipated by the Workers Compensation carriers or self-insurers in those two states.

The charges for outpatient surgeries can only be estimated with an educated guess. Usually, hospital outpatient centers (as most medical providers) do not post what the cost of surgery will be until the bill is received by the carrier.

Indiana’s Expensive ASCs

The WCRI chart indicates ASCs are usually the same as or less expensive than the hospital-based outpatient surgery centers. Indiana tallies a large increase in ASC costs over hospital outpatient surgery centers. (Why?)

Once again, as in the above example – in 2016 Indiana had no workers compensation fee schedule. The ASCs reverted back to the U&C charges and billed workers comp payors at much higher rates than even the outpatient hospital surgical centers which are normally much higher than ASCs.

Virginia’s New Fee Schedule

Once the Virginia fees schedule kicks in, their place in the most expensive hospital-based outpatient surgical center fees should reduce by more than a nominal amount.

I am not sure if Virginia included outpatient hospital fees in their new fee schedule.

WCRI Study Info

You can read more about the study at this link If you are involved in any way with workers compensation medical payments, I recommend reading the article. The preceding link also provides info on how to obtain a copy of the study that generated the very telling WCRI chart.

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Two Great Workers Compensation Guides WCRI – Benchmarks RXs

October 25, 2018 By JL Risk Management Consultants

WCRI Releases Two Great Workers Compensation Guides in October

Workers Compensation Guides by WCRI (Workers Compensation Research Institute) were released in October. The ones that caught my eye were the two below. The Benchmark study can be broken up by state if you do not wish to download the report for all 18 states.

picture ireland england workers compensation guide

Public Use License

The second guide on state prescription rules and laws is very reasonably priced for what you receive in the download. The guide covers all 50 states as of January 1 of this year. It is to be considered a snapshot of the regulations at the first of 2018,

CompScope 19th Edition – The Venerable Guide to Workers Comp Medical Payment Statistics

The following are sample findings for some of the study states: “My comments are in quotes.”

California: The study shows a decrease in medical payments per claim, evaluated as of March 2017, as a result of the continuing impact of Senate Bill 863. “I had thought SB 863 would have no effects on medical costs. This is a great development for CA.”
Massachusetts: Medical payments per claim were the lowest of the 18 study states; many costs have been decreasing going back several years.
North Carolina: Decreases in medical payments per claim were the steepest of all study states (6 percent per year since 2013), likely reflecting the impact of recent fee schedule changes. “Fee schedules are one of the best ways that a state can reduce overall workers compensation costs without reducing the level of care for injured workers.”
Pennsylvania: Faster-than-typical growth in medical payments per claim was driven by faster growth in hospital outpatient payments per claim.
Texas: Medical payments per claim decreased from 2014 to 2016, following several years of increasing medical costs.
Wisconsin: In contrast to moderate to rapid growth in prior years, Wisconsin experienced little growth in medical payments per claim since 2014. “Without a fee schedule I still predict these costs will increase in the future. Usual and customary can only get you so far without a solid number to work with on medical costs/”

To download copies of the studies, visit https://www.wcrinet.org/reports/compscope-medical-benchmarks-19th-edition.

The 18 study states are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas and Iowa.

Prescriptions Drug Regulations All 50 States

Doctor Hand workers compensation guides Writing Prescription

By StockUnlimited

In early October, the WCRI released a new report that gathers in one place the numerous state regulations affecting prescription drugs in all 50 states, including those for injured workers.

The report, Workers’ Compensation Prescription Drug Regulations: A National Inventory, 2018, also provides information on some of the most prominent prescription drug issues stakeholders are concerned about in 2018, such as the following:

- Rules for Limiting and Monitoring Opioid Prescriptions
Medical Marijuana Regulations
Workers’ Compensation Drug Formularies
Prescription Drug Monitoring Programs
Price Regulations for Pharmacy- and Physician-Dispensed Drugs
Drug Testing Regulations

The tables in this report were compiled from completed surveys of two agencies for each of the 50 states and the District of Columbia. S

The report was authored by Karen Rothkin. For more information about this inventory or to purchase a copy, visit https://www.wcrinet.org/reports/workers-compensation-prescription-drug-regulations-a-national-inventory-201.

Please note that we receive no monies from WCRI to mention their publications. We publish them in the newsletter as they are superior workers compensation guides.

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Workers Compensation Medical Treatment Lag Time – WCRI

August 8, 2018 By JL Risk Management Consultants

WCRI – Time From First Injury To Workers Compensation Medical Treatment – Comparison Across 18 States

Most Workers Compensation medical treatment foretells how a claim will progress over its lifetime. One of My Six Keys To Saving on Workers Comp claims involves having a preset medical network in place.

The other likely involved key concerns the timely filing of the medical report.

picture of injured workers compensation medical treatment by Red Cross

Wikimedia License

These two keys can easily escalate a claim to over 800% more than if the first report filing time – called employer reporting lag time– tallies in with a high number along with the medical treatment not being provided to the injured employee ASAP. The 800% figure came from my research into claims on two different public entity sets of files that involved over 10,000 claims.

The study can be purchased here for $5, yes just $5 for a great study.

WCRI (Workers Compensation Research Institute) attempted to answer three different questions. I was hoping the answers to these three questions would agree with my old research. Those three questions were:

How much variation was there across states in the time from injury to first treatment for physical medicine and “specialty” services (such as surgery, major radiology, and pain management injections) across injury types?
Were there consistent patterns in time to first medical treatment; that is, did some states show shorter or longer time to treatment across injuries and services?
How much variation was there across states in the time from injury to first treatment for “entry” services, such as emergency, office visits, and minor radiology?

The study’s data sets were:

The study examines claims with more than seven days of lost time for injuries occurring from October 1, 2014, through September 30, 2015, evaluated as of March 31, 2016. This would, in a way, eliminate medical only claims from the data set.

The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin.

Two different reporters contacted me on my opinion of the study. One aspect that I had not read yet was that North Carolina was one of the lagging states in providing Workers Compensation medical treatment. (wow!) I decided to read more into the study.

nurse taking workers compensation medical treatment blood pressure

by StockUnlimited

Page 17 of the study (flash report) shows the average of all the states. The table (Table A-2) shows the comparison across all medical treatment types with the 18 studied states.

The states that were the slowest in providing medical treatment were (overall):

Massachusetts
North Carolina
Louisiana
California

I am not sure exactly what to draw from the study and flash report. California with its utilization review process would make the delays almost understandable. I am not so sure about the other three.

Our HQ state – North Carolina – surprised me quite a bit. North Carolina has employer-controlled worker compensation medical treatment. North Carolina did not place last or near the bottom in all of the study’s categories. I will likely need to read the study again to see if any hidden data nuggets exist in the workers compensation medical treatment data.

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Workers Comp Attorney Involvement 400% Variation Between States

May 25, 2017 By JL Risk Management Consultants

Workers Comp Attorney Involvement Varies Widely Between 18 States – WCRI

The Workers Comp Attorney involvement rates vary wildly between the states that WCRI studied in a recently released report.

This topic wowed the press and audience at the recent WCRI Annual Conference just this last March. The press at the conference began feverishly typing when this data was presented by WCRI.

Two Workers Comp Attorney Involvement presenting

Wikimedia Commons – Cecil Stoughton

My live blogging of this session from the March WCRI Annual Conference can be found here.

WCRI is the Workers Compensation Research Institute out of Boston, Mass. Andy and the Institute represent a great think tank for Workers Compensation. When I need good fresh WC data, I turn to them. The rating bureaus such as NCCI and WCIRB provide good data also.

If you underwrite, adjust, or have anything to do with the Workers Comp rating process, this is one study you should download. The data astounded me.

The chart in this article shows the striking differences between the 18 states in reference to attorney involvement.

According to WCRI

“According to the study, the percentage of claims with worker attorneys ranged from 13–14 percent in Wisconsin and Texas to 49–52 percent in New Jersey and Illinois, for 2013 claims with more than seven days of lost time and experience through March 2016. The median of the 18 states was at nearly 30 percent.

Percentage Workers Comp Attorney Involvement Vector

Wikimedia Commons – Wilinckx

The question that I ponder covers three points – why

Such a huge variation
Do over 50% of files in either Illinois or New Jersey require an attorney? – astounding
Is the median of all states at 30%?

WCRI postulates an answer for all three:

The study, Worker Attorney Involvement: A New Measure, indicates system features may be responsible for at least some of the interstate variation. The report focuses on the two states among the lowest on this measure (Wisconsin and Texas) and the two states among the highest (Illinois and New Jersey), and discusses the system features that may be contributing to these states’ results based on findings from WCRI’s CompScope™ Benchmarks studies.

The 18 states included in this study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin. These states were selected because they are geographically diverse, represent a range of system features, and represent the range of states that are higher, near the middle, and lower on costs per claim.

The data structure analyzed for Workers Comp Attorney involvement by WCRI was enormous –

Female Workers Comp Attorney Involvement Addressing Jury

StockUnlimited

The analysis in this report uses data from 24 data sources, including national and regional insurers, claims administration organizations, state funds, and self-insured employers. The data are collected in the WCRI Detailed Benchmark/Evaluation (DBE) database, which includes about 7.5 million claims that are reasonably representative of the entire system in each of the 18 states, including all market segments: self-insurance, residual market, voluntary insurance, and state funds.

To download this study on Workers Comp attorney involvement, visit https://www.wcrinet.org/reports/wcri-flashreport-worker-attorney-involvement-a-new-measure . The authors of this study are Rebecca (Rui) Yang, Karen Rothkin, and Roman Dolinschi.

BTW, WCRI does not pay J&L Risk Management Consultants or myself any advertising revenue. My opinions on their studies are written of my own volition. They do provide me a copy of certain studies gratis if I request them.

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ACA Repeal Could Lead To More Workers Comp Case Shifting

December 7, 2016 By JL Risk Management Consultants

Will ACA Repeal (Affordable Care Act) Cause Case Shifting to WC?

The drumbeat for ACA repeal has grown much louder with the new administration just around the corner. This article on the new demands to keep Obamacare alive was an interesting angle from the health insurance sector.

Wikimedia Commons – Obama

Please read the article for all the information. The two main conditions were to:

Allow the subsidies for low-income insureds
A three-year unwinding – not an immediate cessation

In 2015, Dr. Richard Victor – then CEO of WCRI, presented the concept of case shifting from health to workers comp due to the lack of sufficient health insurance markets and other conditions.

After reading the above-linked article, one would have to say that if there is a sudden shift in the health insurance marketplace from the government abolishing the ACA?

One of the stark recommendations in the article was the penalty was too small to cause the younger employees to seek out and buy ACA policies. This scenario seems ripe for case shifting to WC.

Would Workers Comp actually become a bastion for the failing health care market?

Please follow the links to the prior article on Dr. Victor’s predictions. I had thought the concept was professorial and not real-world when I had first written about it. Possibly, I was the one that was eccentric to think this would never happen.

This would not be difficult to study unless more variables are in place that will affect WC over the next decade or two. We shall see.

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Work Comp Outpatient Hospital Charges – WCRI Exposes Myth

August 30, 2016 By JL Risk Management Consultants

States Vary Greatly in Work Comp Outpatient Hospital Charges – WCRI

The Work Comp outpatient hospital charges for even a minor procedure have become very expensive over the last 10 years. The Workers Compensation Research Institute (WCRI) released a study today which indicates great variability between states and with the Medicare reimbursement schedules.

Picture Of Work Comp Outpatient Hospital Charges Building

Wikimedia – Tinton5

The new study, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 5th Edition, compares hospital outpatient payments across states and monitors the impact of fee schedule reforms. The study was very thorough as it covered 33 states.

Dr. Olesya Fomenko, economist for WCRI co-authored the study. I have talked with her each year on different subjects at the WCRI Annual Conference in Boston. “According to Dr. Fomenko, “This report found that hospital outpatient payments per surgical episode varied significantly across states, ranging from 69 percent below the study-state median in New York to 142 percent above the study-state median in Alabama in 2014,”

One of the surprising areas was Alabama coming in at such a high rate in what I had thought was a lower-cost state for Workers Compensation premiums.

The 33 state study agreed with NCCI and what I have been saying for many years. Strictly fee schedule states are the lowest cost states for medical services including work comp outpatient hospital charges. Even the old stalwart, Virginia will now have a fee schedule in 2018.

The following are some major findings from the study:

States with no workers’ compensation fee schedules for hospital outpatient reimbursement had higher hospital outpatient payments per episode compared with states with fixed-amount fee schedules—63 to 150 percent higher than the median of the study states with fixed-amount fee schedules. Also, in non-fee schedule states, workers’ compensation paid between $4,262 (or 166 percent) and $8,107 (or 378 percent) more than Medicare for similar hospital outpatient services.
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States with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules—32 to 211 percent higher than the median of the study states with fixed-amount fee schedules. Similar to non-fee schedule states, workers’ compensation payments in states with percent-of-change based fee regulations for common surgical procedures were at least $3,792 (or 190 percent) and as much as $8,244 (or 430 percent) higher than Medicare hospital outpatient rates.
Most states with fixed-amount fee schedules and states with cost-to-charge ratio fee regulations had relatively lower payments per episode among the study states. In particular, for states with fixed-amount fee schedules, the difference between workers’ compensation payments and Medicare rates ranged between negative 27 percent (or -$631) and 144 percent (or $2,916).

The study covered the years 2005 to 2014.

The analysis excludes:

Medical Personnel Work Comp Outpatient Hospital Charges Showing Hand Gesture

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professional services billed by non-hospital medical providers
transactions for durable medical equipment and pharmaceuticals billed by providers other than hospitals.
payments made to ambulatory surgery centers.

The 33 states included in this study represent 87 percent of the workers’ compensation benefits paid in the United States. The states are Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.

To purchase this study, visit http://www.wcrinet.org/studies/public/books/hci_5_book.html.

Work Comp Laws For All 50 States And Canada – WCRI IAIABC

June 1, 2016 By JL Risk Management Consultants

Work Comp Laws

The Work Comp Laws for all 50 states and Canada used to be provided by the US Chamber of Commerce. I remember their manual as always being slightly out of date. However, it was a great summary to have on hand if you were handling or administering over a claims volume with multi-jurisdictions.

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I have always made the recommendation to multi-state employers (including trucking companies) to have a handy copy of the Work Comp laws for all 50 states. One reason is that the WALSH jurisdictional test may place an employee’s WC claim in an unexpected state.

The Workers Compensation Research Institute (WCRI) and the International Association of Industrial Accident Boards and Commissions (IAIABC) Work Comp Laws and Rules covers 98 pages with 16 tables. The two organizations have done a bang-up job on the manual. The manual was last updated January 1, 2016.

This is one of my favorite publications produced by the WCRI.

The 16 tables covered are:

Type of Law and Insurance Requirements
Coverage Exemptions from Workers’ Compensation
Workers’ Compensation Medical Benefits and Method of Physician Selection
Benefits for Temporary Total Disability Provided by Workers’ Compensation Systems
Benefits for Permanent Total Disability Provided by Workers’ Compensation Systems
Permanent Partial Disability Benefits Provided by Workers’ Compensation Systems
Maximum Benefit Payments for Selected Scheduled Permanent Partial Disabilities
Sequence of Disability Payments Made within Workers’ Compensation Systems
Coverage of Mental Stress, Cumulative Trauma, Hearing Loss, and Disfigurement
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Details on Disfigurement Claims
Fatality Benefits Paid under Workers’ Compensation Systems
Initial Payments, Waiting Periods, Retroactive Payments, and Time Frames for TTD
Rehabilitation Benefits Allowed under Workers’ Compensation Systems
Advocate and Attorney Fee Provisions under Workers’ Compensation Statutes
Workers’ Compensation Boards, Advisory Committees, and Other Commissions within Jurisdictions
Workers’ Compensation Second Injury Funds

According to WCRI

““In Canada and the United States, workers’ compensation is under the control of state and province legislative bodies and administrative agencies,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “This survey provides the ability to understand the subtle differences between jurisdictions.”

You may purchase the manual here for a nominal fee. This will be one of my go to reference sources for Work Comp Laws.

Medical Cost Containment Inventory From 51 Jurisdictions – WCRI

April 22, 2015 By JL Risk Management Consultants

Medical Cost Containment Inventory From 51 Jurisdictions

WCRI Releases National Inventory of Medical Cost Containment Initiatives Adopted In 51 Jurisdictions. Last week, WCRI (Workers Compensation Research Institute released an authoritative work on the initiatives adopted nationally.

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Medical costs have almost become runaway when compared to indemnity costs in most Workers Compensation claims. State legislatures have become accustomed to tweaking or even overhauling fee schedules and other medical components. Many states have attempted to reign in costs without much of an effect.

“This study provides a basic understanding of the cost containment initiatives adopted in 51 jurisdictions and provides additional references for those who want more detail,” said Ramona Tanabe, author of the report and WCRI’s executive vice president and counsel.
According to the study, medical cost containment became a focus for many states in the early 1990s when the medical portion of the workers’ compensation benefit dollar began to grow more quickly than other claim costs. This led to growth in the adoption and variety of cost containment initiatives since the 1990s.

Picture of calculator and stethoscope Medical Cost Containment Inventory

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I would have to agree with that assessment. Indemnity cost containment was on the front burner in the 1980’s when I began my insurance career. Medical cost containment was still on the back burner until the mid-1990’s.
The inventory includes tables of statutory provisions, administrative rules, and administrative procedures used by states as of January 1, 2015. Medical cost containment initiatives include price management methods, such as fee schedules and utilization management (e.g., utilization review or medical networks).
The initiatives outlined in the study aim to curb the cost of a particular service or to reduce the amount of services provided. Cost containment regulatory initiatives entail a balancing act of limiting the cost of services and inappropriate or unnecessary treatment without negatively affecting the quality of treatment or access to care for injured workers.

For more information on this study or to purchase it, click on the following link: http://www.wcrinet.org/result/MCC_2015_result.html.

WCRI Study – Louisiana New York Have Highest WC Opioid Use

May 15, 2014 By JL Risk Management Consultants

WCRI Study

Oklahoma recently enacted new rules for opioid use as 8% of the general population were long term users of painkillers. WCRI recently performed a startling study on Workers Compensation opioid use which indicated that Louisiana and New York injured workers were ingesting massive amounts of opioids.

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The WCRI study was titled – Interstate Variations in Narcotics Use – 2nd edition. Graphics are usually not in the article on this blog. However, the graph at the end of this article is “worth a thousand words.” The graph below says it all concerning opioid use.

I usually do not like to cut/past right out of press releases, but WCRI’s Dr. Victor said it better than I could on WC opioid abuse. The complete study is available here. If you are a risk manager, adjuster, or anyone involved with WC claims, this is a very thorough study that should receive your attention.

The dangers of narcotic misuse resulting in death and addiction constitute a top priority public health problem in the United States and are shared by the workers’ compensation community,” said Dr. Richard Victor, WCRI’s executive director. “This study will give public officials, employers, worker advocates, and other stakeholders the ability to see how the use and prescribing of narcotics in their state compares to others.”

According to the study, the average injured worker in New York and Louisiana received over 3,600 milligrams of morphine equivalent narcotics per claim (double the number in the typical state). To illustrate, this amount is equivalent to an injured worker taking a 5-milligram Vicodin® tablet every four hours for four months continuously, or a 120-milligram morphine equivalent daily dose for an entire month.

Besides New York and Louisiana, the amount of narcotics per claim was also higher in Pennsylvania and Oklahoma (32–48 percent higher than the typical state). Michigan had the highest amount of narcotics per claim among the Midwest states included in this study. It is worth noting that Michigan was among the states with lower use of narcotics per claim compared with the typical state in 2008/2010.

The study found that narcotics are frequently used in the workers’ compensation system. In 2010/2012, about 65 to 85 percent of injured workers with pain medications received narcotics for pain relief in most states. A slightly higher proportion of injured workers with pain medications in Arkansas (88 percent) and Louisiana (87 percent) received narcotics.

The study is based on approximately 264,000 workers’ compensation claims and 1.5 million prescriptions associated with those claims from 25 states. The claims represent injuries arising from October 1, 2007, to September 30, 2010, with prescriptions filled up to March 31, 2012. The underlying data reflect an average of 24 months of experience.

The following states are included in this study: Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

WCRI – How Economy Drives Financial Performance of WC – Live

March 13, 2014 By JL Risk Management Consultants

Economy Drives Work Comp Success – WCRI

A great presentation on how the Economy Drives the financial performance of WC.

.Dr. Harry Shuford from NCCI – One of the best presentations so far at this conference. This was great data analyses. He should have been given longer than 30 minutes of time. An hour would have sufficed for his presentation.

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Income statement approach

Workers Comp’s average profitability 5% over time. It is very cyclical.

109% combined ratio – underwriting loss of 9% per year

If insurers charged the NCCI recommended rates, they would cover costs. – I did not understand that concept as most of the carriers use LCM (Loss Cost Multipliers) of more than 100% which would generate a profit.

Cost drivers

Heavy drop in manufacturing and private sector injuries (frequency)
Business cycle – flow of inexperience workers (AIG study)
Business cycle – duration increases in recession, decreases in better economic times.
Better medical treatment
The key is labor market function

Hard markets are always preceded by a heavy recession. Underwriting cycles match economic performance of investments.

Bottom line – Workers Comp overall has performed much better than most of the financial industries.

I agree with the above statement as the usual market growth rate is approximately 4% over time. Workers comp performs at 1% better level than other financial and insurance markets.

Health Insurance Less Expensive Than Workers Comp For Medical Treatment

June 25, 2013 By JL Risk Management Consultants

WCRI Study – Health Insurance Medical Treatment More Economical Than Workers Comp

The health insurance vs Workers Comp medical treatment costs have long been a concern for employers, carriers, and TPA’s.

Medical costs for Workers Compensation claims have always been seen as very expensive when compared to Health Insurance. WCRI (Workers Compensation Research Institute) recently conducted a study that compared Workers Comp claim medical costs with health insurance claim costs.

Picture Of Medical Personnel Health Insurance Pouring From Pill Bottle

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The states that were covered in the study are at the end of this article. The study compares hospital outpatient payments made by workers’ compensation and group health for treatment of common surgical cases in 16 large states, which represent 60 percent of the workers’ compensation benefits paid in the United States.

The study covers hospital outpatient services delivered in 2008. As there were very few changes since 2008 in the medical fee schedules for the states in the study, the numbers should be considered almost, if not completely current.

Medical costs are slowly increasing to the level of 2/3 of the Workers Comp costs in certain states. Most of those are states without fee schedules. Even the states with fee schedules are feeling the effects of increased medical costs. Medical claim costs in excess of 70% of total claims value will be the norm if the recognized trend continues for a few more years.

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One of the more stark figures in the study is that Workers Comp carrier pay 43% more for the same medical procedure than if the claims were filed with health insurance. The medical procedure studied was outpatient shoulder surgery.

One question the study abstract posed is the difference in outpatient surgery costs necessary to induce outpatient facilities to treat WC patients? My answer to that has always been WC pays very well for medical procedures. I have rarely seen any medical practitioner turn away WC patients regardless of what a fee schedule would pay for rendered services.

The following 16 states are included in this study: California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin.

Texas Workers Comp Payments Decrease Due To Reforms

November 15, 2012 By JL Risk Management Consultants

Texas Workers Comp Payments Are Lowering

The state of Texas workers comp payouts decreased for the first time in years. According to WCRI, the payments decreased overall by 4%. This is a very large one year decrease in the current Workers Comp environment.

Picture Of Hand Thumbs Down Texas Workers Comp And Bar Graph Decrease

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Texas enacted a large group of workers comp reforms in 2008. As I have mentioned often, the results of a reform measure will not usually appear fully until three to four years after a new law or court case changes the WC environment in a certain state.

Medical payments decreased by 2%. I decided to look into this further as there seemed to be a few variables that were not mentioned as hospital network payments had actually increased. I found this article on a major impact of the Texas reforms.

The article said it best –Evidence-based treatment guidelines are one method used to control medical costs in the workers’ comp system.The Texas Department of Insurance announced that, as of May 2007, use of the Official Disability Guidelines – Treatment in Workers’ Compensation was required for the treatment of all injured workers not covered by a certified health care network.

Businesswoman Texas Workers Comp Drawing Graph Chart Decrease

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Low back injuries — decreases for the likelihood of surgery, physical medicine, chiropractic manipulation, other radiology, or an injection; a decrease in the number of visits for physical medicine, chiropractic manipulation, other radiology or injections; an increase in the number of services per visit for physical medicine; and a decrease in the number of services per visit for chiropractic manipulation.

I found it interesting that WCRI itself had said in the original article the recession had an effect on the WC environment. However, an article on the WCRI website written by Risk & Insurance on the same WCRI study pointed out what I consider the real reason for the decrease in benefits.

Having better medical control of the low back injuries was likely the cause for the decreased payouts on both indemnity and medical benefits.

One area that I disagreed with the original WC article by WCRI is the recession is the cause of any decrease in indemnity payments. As I am originally from that part of the country, I can attest that there is an oil boom of sorts in TX that would easily offset any effects of a recession.

North Carolina Workers Comp – Shocker!

February 9, 2011 By JL Risk Management Consultants

WCRI North Carolina Workers Comp

The North Carolina Workers Comp paid per claim figures astonished many in the workers comp community. When I first read the conclusion of a study published by The Workers Compensation Research Institute (WCRI), I thought there must be a mistake. For many years, Workers Comp had been a bargain in NC when compared to other states. That result was $42,000 paid per Workers Comp claim.

Picture Of Hand Using Magnifying Glass North Carolina Workers Comp With Piggy bank Stethoscope And Injection

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That seemed astounding to me. How can NC be the highest of all 16 states in the study? One of the drivers was medical cost. The researchers attribute the increase in costs to growth in medical payments, a longer duration of temporary disability and more frequent and higher payments for partial permanent disability.

As I have mentioned very often, the Workers Comp E-Mod system is a time-lag system. What happens today may not affect your premiums for up to 4 years. My main concern is the overall experience OF THE WHOLE MARKET for Workers Comp, in NC, will change. Your company’s E-Mod may not increase that much if your competitors are all paying out more for claims.

Unless I am mistaken, this means the rates for each Workers Comp Code will increase across the board or some Class Codes are really going to feel the pain in a few months.

I was going to access the WCRI report. I do not think that is necessary as the areas of disability payments (temporary total and permanent partial) along with medical payments were increased.

I am going to research this info more. If I find any peculiarities or major implications, I will post on it.