Average Cost Per Medical Claim for Work Comp Claims Lower in Pennsylvania Than Other States

Medical Costs in PA Consistent With Other States

Medical costs per claim for workers’ compensation claims in Pennsylvania were typical compared with other states, but rising, a new study said.

Workers’ Compensation Research Institute (WCRI) (Cambridge, Mass.) reported typical but rising medical costs per workers’ compensation claim in 2006/2007 in Pennsylvania fell into two categories, as compared to the median state in a 14-state study, CompScope^TM Medical Benchmarks for Pennsylvania, 9^th Edition.

1. Lower costs per claim were a result of services billed by physicians and hospitals, driven by lower to typical prices paid to physicians and lower payments per service for hospital outpatient services.

2. Higher costs per claim were a result of services billed by chiropractors and physical therapists, stemming from higher utilization of these services due to more visits per claim offset by typical prices paid. These payments accounted for 13% of total medical claims dollars with seven plus days of lost time in the study year.

The study reported in Pennsylvania:
1. More claims received clinic/evaluation and management (office visits), physical therapy (modalities and procedures), and minor radiology (X-rays) services in a hospital outpatient setting than in other study states.
2. Suggesting more routine procedures were delivered in a hospital outpatient setting than provided by non-hospital providers in other states.
3. More frequent use of hospital outpatient services may mean physicians and physical/occupational therapists might have billed more often for their services under hospital ownership than in the typical state.
4. Although more care was delivered in a hospital outpatient setting, the average medical cost per claim in was substantially lower than other study states.

Example:
1. Medical costs per claim for operating/treatment/recovery room services were 41% lower than the typical state.
2. Major radiology services (MRIs and CT scans) were 20% lower.
3. Minor radiology services (X rays) were 18% lower.

Overall lower payments per claim were primarily driven by lower payments per service; services per claim were generally typical of the study states.

1. Medical costs per claim grew by 11% in.
2. Non-hospital providers grew by 8%, driven mainly by an increase in utilization for services billed by physicians and chiropractors. (workersxzcompxzkit)
3. Hospital outpatient payments per claim were not a significant cost driver in the latest year.

The study noted in 2006/2007, the average hospital inpatient payment per episode increased significantly although the median or typical payment per episode showed little change. The average payment per episode is very sensitive to the number of episodes and length of stay. Hence, the median or typical payment per episode is a more meaningful measure to observe changes in the trend.

To order this report, go to the WCRI Web site: www.wcrinet.org.

Author: Robert Elliott, J.D.

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