Measuring Workers Comp Costs Archives - Amaxx Workers Comp Blog

WCRI Releases Medical Price Index Data for Three States

November 14, 2011 // by Rebecca Shafer, J.D.// Leave a Comment

The Workers Compensation Research Institute (WCRI) recently released medical price index data geared toward thee specific states. Regardless of where you are based, we all can learn from them.

They are:

Medical Prices in Virginia’s Workers’ Compensation System Continued Rapid Growth in WCRI’s Medical Price Index

Wisconsin’s Workers’ Compensation System Had the Highest Prices and Fastest Growth in WCRI’s Medical Price Index

Medical Prices and Growth in Indiana’s Workers’ Compensation System Among the Highest in WCRI’s Medical Price Index

In the Virginia study, WCRI found the 2010 price for non-hospital services was nearly 30 percent higher than the median price in states with fee schedules. The original nine-year study, Medical Price Index for Workers’ Compensation, Third Edition (MPI-WC), showed prices grew much faster than the typical growth rate of 11 percent in states with fee schedules.

The study further showed in Wisconsin, their system had the highest prices and fastest growth in their WCRI’s Medical Price Index. “The price for non-hospital services in Wisconsin in 2010 was the highest of the 25 study states, more than twice the prices in the 25-state median, and nearly 50 percent higher than the median of the 6 states with no fee schedules,” the study says.

A WCRI press release indicated, “The prices in Wisconsin increased 42 percent, much faster compared to median growth rate of 11 percent of the states with fee schedules, also faster than the 28 percent typical growth rate of the states without fee schedules.”(WCxKit)

Lastly, the Indiana portion of the larger study indicated the 2010 price for non-hospital services in that state was the third highest of the 25 study states, more than 50 percent higher than typical prices paid in the study states with fee schedule regulation. The nearly 30 percent growth in Indiana was much faster than the typical growth rate of 11 percent in states with fee schedules, according to a WCRI press release.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Since 1983, WCRI has been a catalyst for significant improvements in workers’ compensation systems around the world with its objective, credible, and high-quality research. WCRI’s members include employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia and New Zealand.

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.

CLUES TO WORK COMP COST REDUCTION: www.WCManual.com

WORK COMP CALCULATOR: www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR: www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP: www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

Take A Survey – Of Your Own Company

May 16, 2010 // by Rebecca Shafer, J.D.// Leave a Comment

There are a million ways to ask questions in a survey. However, the style of your questions will drive the quality of information you gather. You want to get good answers leading to good results.

Think of workers’ compensation surveys as an opportunity to audit, assess and educate. Some examples of the types of questions likely to advance your cause:

Quantitative — find out the percentage of employees who return to work within four days.
Direct – Do you have written step-by-step procedures for supervisors to follow in the event of an employee injury?
Informative – Do you know what a positive Waddell test is? It is a sign of possible dishonesty. If you don't know this medicalese, or your adjusters don't know medicalese, you need to consider a medical director.

Discussions coming from this type of survey help you educate your team on the actions truly driving costs. It’s also a great chance to address things such as a manager’s perception that most claims are fraudulent.

How to get your answers:

Ask quantitative questions.
Ask direct questions.
Ask informative questions.
Give and get information.

DON’T

Ask trick questions.
Ask reverse questions.
Ask attack questions.
Ask subjective questions.

There’s nothing worse than participating in an audit or survey and then being left in the dark when it comes to results. Ask “How did I do?”

It’s important to be sure you have a structured process for reviewing results with participants. Have the material and insights on hand to provide clarification there and then including concrete recommendations for improvement. (workersxzcompxzkit)

Feedback: So how did I do?

Review results with participants.
Provide recommendations.
Educational material.

Author Rebecca Shafer, J.D, Consultant, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ ReduceYourWorkersComp.com or 860-553-6604.

Podcast: KNOW the New OSHA Recordkeeping Rules — OR Risk Fines and Criminal Penalties. Click Here: http://www.workerscompkit.com/gallagher/podcast/Non_Compliance_with_Recordkeeping_Standards/

WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.

Five Items That Drive Workers Compensation Medical Costs

July 27, 2009 // by Robert Elliott, J.D.// Leave a Comment

Study Finds Medical Costs Rise

Medical costs per workers’ compensation claim in Wisconsin shifted from being lower than other study states to being typical. A study by Workers’ Compensation Research Institute (WCRI) (CompScope^TM Medical Benchmarks for Wisconsin, 9th Edition) found Wisconsin employers paid lower costs per claim than the median of 14 study states 2001 injuries with experience through the first quarter of 2004.

However, by 2004/2007 Wisconsin employers paid typical medical costs per claim compared to the other 14 study states.

WCRI attributed Wisconsin’s shift in the average medical costs per claim compared to the study states to:

1. Faster growth in the medical costs per claim.

2. Being among the highest non-hospital prices paid and hospital outpatient payments per service.

3. Medical costs per claim rose more rapidly.

4. Over a period of five years (2001/2002 to 2006/2007) Wisconsin experienced a 70% growth in medical costs per claim vs. a rise in study states of 47% to 54%.

5. The main cost drivers were rapid growth in prices paid for non-hospital services and hospital outpatient services.

It was found employers paid among the highest prices for many procedures performed in a non-hospital setting, such as:

WI: Nonhospital established patient office visits: $95. (Most frequently billed service.)
SS: 62, median study state.
DIFF: $33.

WI: Arthroscopic knee surgery: $3,035 (most common procedure).
SS: $1,336, typical study state.
DIFF: $1,699.

WI: MRI: $1,997.
SS: $805, median study state.
DIFF: $1,192.

Not only did the study find Wisconsin paid substantially higher prices in the typical study state, but, compared to Iowa and Indiana (study states not regulating prices) they were also higher. In general, higher non-hospital prices were offset by lower utilization of medical services. Similar conclusions apply to hospital outpatient services.

Despite these higher prices workers reported faster recovery and return to work and better access and satisfaction with care.

WCRI observed might be reasonable for an employer to pay higher costs if workers experience improved outcomes over time. WCRI is currently conducting a survey of injured workers in Wisconsin to address this question.

For the period 2006/2007 WCRI reports:

1. Medical costs per claim increased by 11%, driven by growth in costs per claim to both non-hospital and hospital providers.

2. Medical cost per claim for non-hospital services grew as a result of a 5% increase in prices paid and a 5% increase of medical services utilization. (workersxzcompxzkit)

3. Hospital outpatient cost per claim grew 10%, driven by a 6% increase in the average payment per service and 4% growth in number of services per claim. These growth rates were similar to the rates in previous years.

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

Author: Robert Elliott, J.D.

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All state laws vary.

Integrated Disability Programs COULD Reduce Duplicate Payments

July 4, 2009 // by Robert Elliott, J.D.// Leave a Comment

An analytic study by Options and Choices, Inc. (OCI) found that over 4% of all workers’ compensation claims have a duplicate bill sent to a group health plan.

OCI conducted the analyses on a large employer from their proprietary Reference Database on duplicate workers’ compensation and healthcare payments. The purpose of the study was to determine how frequently and how much greater costs occur if and when providers are billing both workers’ compensation and healthcare providers for the same services, patient or claimant.

The results of the study were presented at a recent meeting of the Fraud Assessment Commission, under the California Department of Insurance Fraud Program. The study found the following:

1. 4.2% of ALL workers’ comp claims have a duplicate healthcare claim.

2. Over half of the duplicate claims filed received payment.

3. The employer paid over $1.2 million dollars in duplicate payments.

4. One-third of the duplicate claims filed were paid more than what was billed.

5. The employer paid over $100,000 in overpayments on duplicate claims

“There is an occurrence of duplicate billing on the exact same workers’ comp claim, same date of service, same ICD-9, same billing codes, same provider also billing to group health,” says Archie Anderson, president of OCI. “This was an aged claim analysis, meaning all the payments have been made. This particular employer was not even aware.”

The cause of duplication cannot be determined from the data, however the claim set is easily identified for follow up. (workersxzcompxzkit)

According to OCI, to prevent duplicate claims, an employer or organization must commit to integrating its workers’ comp and healthcare billing and claims data to identify where the duplicate billing and payments occur.

Author: Robert Elliott, J.D.

Reduce Your Workers Comp: www.ReduceYourWorkersComp.com/
Workers Comp Kit: www:workerscompkit.com/
WC Best Practices Quick Check: http://www.workerscompkit.com/intro/
See Our: Workers’ Compensation Toolkit: Corner.advisen.com/wc
Workers’ Comp Kit Books & Guides: Corner.advisen.com/wcbooks
WC Calculator: www.reduceyourworkerscomp.com/calculator.php
TD Calculator:
www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101: www.ReduceYourWorkersComp.com/workers_comp.php
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Do not use this information without independent verification.
All state laws vary.

Workers Compensation A Study in Michigan

June 14, 2009 // by Robert Elliott, J.D.// Leave a Comment

One main theme of effective workers’ compensation programs is focusing on employer/employee satisfaction with the system and returning workers to work in a timely manner. The following study reinforces the importance of providing immediate medical care for workers following an injury and transitional duty and return to work programs. (See WCK Blog: “Workers’ Compensation and Injured Workers – It Isn’t “US” Against “THEM”).

In Michigan, the Workers’ Compensation Research Institute (WCRI) conducted a study, Comparing Outcomes for Injured Workers in Michigan analyzing how Michigan compared with 10 other states within the context of this “key value proposition.”

The study juxtaposed worker outcomes in each study state within the areas of recovery of physical health and functioning, return to work, access to health care and satisfaction with health care with data on the costs and utilization of medical care and found:

1. On average, employers in Michigan paid less for medical care per claim with more than seven days of lost time than most other study states.
2. The average paid medical cost per claim with more than seven days of lost time was 27% lower than the average medical cost in the median of the 11 states studied, largely due to a lower than typical fee schedule.
3. Recoveries of injured workers in Michigan were in the middle of the range of states studied with the average worker in Michigan receiving a typical amount of medical care and reporting a typical physical recovery after an injury.
4. Workers in Michigan had return-to-work outcomes typical of the study states. Some 10% of Michigan workers reported never returning to work; 14% reported never having a substantial return to work (one that lasted at least one month) predominantly due to their injury as of 2.5 years post injury.
5. Michigan workers typically returned to substantial employment about nine weeks after their injury, putting the state in the middle of the group of states. Only 22 percent of Michigan workers did not have a substantial return to work one year post injury – a better outcome compared to most other states studied.
WCRI found compared to 10 other states, outcomes for injured workers in Michigan were generally in the middle of the range on most measures.

The study also found:

1. The vast majority of workers in Michigan reported they were somewhat or very satisfied with the timeliness of their first visit to their initial and primary provider (83% and 79% for each measure, respectively).
2. 14% of workers reported they were very dissatisfied with how quickly they saw their primary provider after their injury, similar to the middle group of states (10% to 14%).
3. 12% percent reported “big problems” in gaining access to the primary provider they wanted.
4. 82% reported they were somewhat or very satisfied overall with the care they received. Although approximately 1 in 10 said they were very dissatisfied with their medical care, this was still in the middle of the range of states studied.
5. Michigan had among the lowest percentage of workers who wanted to change their primary provider due to dissatisfaction with their care. Fewer Michigan workers wanted to change providers than in most other study states. (workersxzcompxzkit).
The study consisted of telephone interviews with 786 workers in Michigan who received workers’ compensation income benefits for injuries between October 2005 and September 2006. The interviews were conducted during September and October 2008 – on average, about two and one-half years after the dates of the workers’ injuries.

Author: Robert Elliott, J.D.

Click on these links to try it for yourself.
WC Calculator: www.ReduceYourWorkersComp.com/calculator.php
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WC 101: www.ReduceYourWorkersComp.com/workers_comp.php

Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.

How to Benchmark Companies with Full-time and Part-time Employees

November 13, 2008 // by Director// Leave a Comment

The Cost Per Full-Time Employee (Equivalent), also known as the Cost Per FTE is the best way to benchmark workers’ comp costs when a company has both full-time and part-time employees. Using the “number of employees” is not useful in isolation because the percentage of part-time employees varies dramatically, often by business unit, department or industry. Using “manhours” equates losses between departments or business units having part-time and full-time employees.

The formula for calculating the Cost Per FTE is: (Incurred Losses X 2,000) divided by (Manhours Worked).

This measurement uses the incurred losses and manhours allowing you to measure losses at any point in time regardless of labor charges. Thus, no matter how far into the calendar year or fiscal year a company is, Cost Per FTE can be used.

To learn more about benchmarking go to Benchmarking.

For more cost savings tips go to WC Cost Reduction Tips.

Show the REAL cost of workers comp with the Real Cost Calculator

Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com

Measuring Workers Comp Costs

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