Workers’ comp costs per claim for medical care of injured workers in Illinois are among the highest of 15 study states one year after implementation of the state’s first medical fee schedule in 2006 according to a new report from the Workers’ Compensation Research Institute (WCRI). WCRI also found growth in medical costs per claim slowed 5% in 2007/2008 after double-digit growth rates prior to 2005 because of the new fee schedule.
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WCRI study Monitoring the Impact of the 2005 Reforms in Illinois: CompScope™ Benchmarks, 10thEdition also reports indemnity benefits per claim with more than seven days of lost time in Illinois grew 7% in 2007/2008 – the same as prior years.
The steady growth in indemnity benefits per claim in 2007 was led by a 6% increase in the duration of temporary disability and a 5% increase in the average permanent partial disability (PPD)/lump-sum payment per PPD/lump-sum claim.
Total costs per all paid claims in Illinois’ early post-reform were among the largest of the study states — on average, $11,224 per claim in 2005/2008.
WCRI identifies several factors contributing to these results.
#1 Illinois had among the highest percentage age of workers losing more than a week from work, 27% compared to 19% in the median of 15 states in 2005/2008.
#2. Injured workers stayed off work on average 20 weeks, 4 weeks longer than workers in other non-wage-loss states in 2005/2008.
#3. Frequent lump-sum settlements were a key factor in the higher indemnity benefits per claim for claims with more than seven days of lost time. Of the injured workers losing more than a week off work, 39% received a lump-sum payment compared to 22% of workers in the median of the 11 non-wage-loss study states in 2005/2008.
#4. On the other hand, the average lump-sum settlement per claim in Illinois was in the middle of the ranking of the non-wage-loss states.
WCRI states benefit delivery expenses per claim in Illinois were typical compared to other study states in 2005/2008. Medical cost containment expenses per claim with more than seven days of lost time in 2005/2008 were also typical among study states.
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Although there was a greater percentage of defense attorney involvement in Illinois – 32% compared to 24% in the median study state – once attorneys were involved, the dispute resolution process was more routine. As a result, the average defense attorney payment per claim with more than seven days of lost time and defense attorney payment greater than $500 in Illinois was among the lowest of the study states, at $2,883 per claim or 28% lower than the median of 15 study states in 2005/2008. (workersxzcompxzkit)
Finally, WCRI found the time from injury to first indemnity payment in Illinois was typical of the study states in 2007/2008. There was minimal change in the percentage of workers receiving their first indemnity payment within 21 days of injury over the study period.
Author Robert Elliott, executive 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 860-553-6604.
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