Medical Payments per Claim for Massachusetts Comp Claims Low, But Climbing
Workers’ Compensation Research Institute (WCRI) CompScopeTM Medical Benchmarks for Massachusetts, 9th Edition, reported employers in Massachusetts paid an average of just over $5,100 for 2006 claims with experience through March 2007. Medical payments per workers’ compensation claim in Massachusetts were the lowest of 14 states, despite steady increases since 2001 according to the study.
A key driver for lower medical payments was lower prices paid for nonsurgical services, related to the lowest non-hospital provider fee schedule in the nation.
Despite lower-than-typical fee schedule rates for all service categories including surgery, the study found prices paid for surgeries were higher in Massachusetts compared to other study states. Massachusetts employers and insurers often negotiated surgery prices higher than the fee schedule, particularly for orthopedic surgeries.
WCRI observed recent regulations in the form of fee schedule changes, effective April 1, 2009, focused on this issue. Fees for many surgical procedures were increased to reflect current rates being paid, raising fees in some cases two to three times above the 2004 fee schedule rates.
Another provision of the revised fee schedule increased physician fees by 10% to 20%, except for anesthesia and surgery, which were the subject of larger increases. At the same time, hospital reimbursement rates were generally decreased.
Medical payments per claim in Massachusetts were lower for nearly all providers-both non-hospital and hospital-compared to the typical study state.
For example, payments to physicians were 42% lower than the median of the 14 states, mainly due to fewer physician visits and fewer services per visit. Utilization for non-hospital providers in Massachusetts was the lowest among the study states.
In addition, fewer claims received specialty services, such as minor radiology and physical medicine from non-hospital providers. Conversely, these services (and evaluation and management) were provided more often in a hospital outpatient setting in Massachusetts than in the typical study state.
Payments per claim for hospital outpatient services in Massachusetts were about half the amount paid in the typical study state. The lower payments per claim for hospital outpatient services may be partially due to a higher percentage of general outpatient care billed by hospitals in Massachusetts compared to other study states, services likely to be billed as non-hospital services in other states.
As a result, the mix of services provided in the hospital outpatient setting was less intense in Massachusetts than in the typical study state.
The lower payments per service for hospital outpatient services are likely due to the provider fee schedule applied to hospital outpatient services when it is determined the service can be safely provided outside the hospital setting. Hospital inpatient payments per claim were lower than typical of the study states, and a lower percentage of cases involved an inpatient stay.
However, medical payments per claim in Massachusetts increased steadily 9% to 12% per year from 2001 to 2005; and at a slightly slower rate, 7% in 2006 for claims with 12 months of experience.
In 2006, payments per claim to non-hospital providers were stable or falling, due mainly to fewer visits per claim; prices paid were stable. The payments per claim for hospital outpatient services had moderate growth since 2004, mainly driven by increases in payments per service for hospital outpatient services. (workersxzcompxzkit)
To order this report, go to the WCRI Web site: http://www.wcrinet.org/.
Author Robert Elliott, senior vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-786-8286.
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