May 20, 2018

WCRI: Average Total Cost per Workers’ Comp Claim in CA Stabilized after Major Reforms Took Effect in 2013

Cambridge, MA – The average total cost per workers’ compensation claim in California remained stable since the enactment of comprehensive reforms five years ago, according to a recent study by the Workers Compensation Research Institute (WCRI).

“Indemnity benefits per claim grew while medical payments per claim decreased, consistent with the expected impact of the workers’ compensation system reform provisions,” said Ramona Tanabe, WCRI’s executive vice president and counsel.

The system reforms were contained in Senate Bill 863 (SB 863), which took effect in 2013. The legislation was designed to increase permanent disability benefits for injured workers while also creating cost savings and improving the efficiency of the workers’ compensation process, where possible.

The study, CompScope™ Benchmarks for California, 18th Edition, compared California with workers’ compensation systems in 17 other states. For the study, WCRI analyzed workers’ compensation claims with experience through March 2017.

“Stabilization in the average total cost per workers’ compensation claim in California was observed at all claim maturities,” said Tanabe. “Before SB 863 took effect, the average total cost per workers’ compensation claim in California experienced rapid growth after 2005 followed by a moderate increase since 2009.”

The following are among the study’s other findings:

  • Indemnity benefits per claim increased 5 to 6 percent per year since 2013, while medical payments per claim decreased annually from 2 to 6 percent after the implementation of SB 863.
  • The average total cost per workers’ compensation claim in California was higher than most study states for 2014 injuries with an average of 36 months of experience post-reform.
  • Benefit delivery expenses per claim in California were among the highest of the 18 states WCRI studied for 2014 claims with experience through March 2017.

For more information or to purchase a copy, click here: WCRI: CompScope™ Benchmarks for California, 18th Edition.

Source: WCRI

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