CAMBRIDGE, MA, December 10, 2010 – Medical costs per workers’ compensation claim in Massachusetts were the lowest of 15 states in 2007 for claims with 12 months of experience and more than seven days of lost time, according to a study from the Workers Compensation Research Institute (WCRI).
The study, CompScopeTM Medical Benchmarks for Massachusetts, 10th Edition, also reported that growth in medical costs per claim slowed after 2005 after several years of rapid growth.
Several factors led to the lower cost per claim in Massachusetts in 2007, including lower payments to both hospital and nonhospital providers, according to Cambridge, Mass.-based WCRI.
Recent fee schedule changes, effective April 1, 2009, increased fees for many services in Massachusetts, especially surgery rates. Surgery rates were increased for most common workers’ compensation surgical procedures to reflect average current prices being paid.
For select nonhospital services, the study showed that if the 2009 fee schedule had been in effect in 2007, the Massachusetts multistate ranking for these services would likely not have been affected (low to moderate severity emergency room visit, moderate to high severity office visit, and manual therapy).
Medical costs per claim in Massachusetts were 45 percent lower than in the typical study state in 2007, the result of several factors, according to WCRI.
Hospital payments per claim were significantly lower than other study states at just under $3,000. Both inpatient and outpatient payments were among the lowest in 2007. The average inpatient payment per episode (for claims with an average of 24 months of maturity) was 15 percent lower than in the median study state. Recent updates to the fee schedule in Massachusetts lowered the payment on account factor (PAF) for many hospitals.
The study also found that nonhospital payments per claim were the lowest of the study states. Payments per claim for all nonhospital providers – physicians, chiropractors and physical/occupational therapists – were lower to typical.
Likewise, prices paid for nonhospital services were lower to typical of the states except for surgery. This result was likely related to the low fee schedule in Massachusetts, the study noted. Utilization of nonhospital services, except for neurological testing, was also typical in Massachusetts.The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, healthcare and disability issues. Its members include employers, insurers, insurance regulators and state administrative agencies in the U.S., Canada, Australia and New Zealand as well as several state labor organizations.
955 Massachusetts Avenue Cambridge, Massachusetts 02139 617-661-WCRI (9274