CAMBRIDGE, MA, December 10, 2010 – Medical costs per claim in Minnesota were fairly typical of 15 study states, the result of offsetting factors, according to a study from the Workers Compensation Research Institute (WCRI).
The study, Medical Benchmarks for Minnesota, CompScopeTM 10th Edition, found that lower utilization drove lower payments per claim to nonhospital providers in Minnesota despite higher prices paid.
Payments per claim to hospital providers for both inpatient and outpatient care were typical to somewhat higher than the median state, depending on claim maturity, according to Cambridge, Mass.-based WCRI.
Medical costs per claim grew 7 percent per year on average from 2002 to 2007, driven by payments per claim to both hospital and nonhospital providers.
At an average of $11,165, medical costs per claim were 9 percent lower in Minnesota than in the median of the study states for 2005 claims with more than seven days of lost time at an average 36 months of experience. Results for 12-month claims were similar, with Minnesota being 5 percent lower than typical.
The study reported that the overall medical payments per claim to nonhospital providers in Minnesota were lower than typical, driven especially by payments to physical/occupational therapists, which were 20 percent below the 15-state median.
By contrast, payments to chiropractors were more than 50 percent higher than typical, but still payments to chiropractors accounted for just 2 percent of total medical payments per claim in Minnesota. Chiropractors were involved in more claims in Minnesota, and when involved, chiropractors had more visits per claim compared to the typical study state.
Payments per claim for Minnesota nonhospital services were higher than the median study state for radiology services and lower than typical for physical medicine services.
Those results reflect the combination of generally higher prices paid and lower utilization of important nonhospital services, according to WCRI.
Prices paid for nonhospital services were higher than typical, in part because the fee schedule was higher than typical, except for major surgery. By contrast, utilization of medical services was lower in Minnesota than in the median study state, particularly for physical medicine.
Minnesota was lower than typical on all metrics of utilization of physical medicine services – percentage of claims with those services, number of visits per claim, and number of services per visit – especially for non-chiropractic providers of physical medicine services.
The study also found that payments per claim to Minnesota hospital providers were typical to somewhat higher than the median state (depending on claim maturity), driven by higher hospital outpatient payments per claim, a higher percentage of claims with inpatient care, and a higher inpatient surgery rate.
Payments per service for several hospital outpatient services (clinic/evaluation and management, laboratory, and physical medicine) were significantly higher in Minnesota compared to the typical study state, offset in part by fewer services per claim for these same service groups, according to WCRI.
About 11 percent of claims with more than seven days of lost time involved an inpatient stay in Minnesota compared to 9 percent in the median study state, while the average hospital inpatient payment per claim was in the middle group of study states.
Although the overall surgery rate was fairly typical, Minnesota also had the second highest rate of inpatient surgery, at 6.5 percent, compared to just under 5 percent in the typical study state, perhaps a reflection of practice patterns in the state.
Medical costs per claim in Minnesota rose 7 percent per year from 2002 to 2007. This growth was similar to both the annual growth and cumulative growth in non-reform study states (excluding California, Florida, Illinois, Tennessee, and Texas).
Payments per claim to nonhospital providers were the main driver of recent growth in medical costs per claim; earlier in the study period, hospitals were the main driver. Increased utilization drove the increase in payments per claim to nonhospital providers from 2005 to 2007. Prices paid for nonhospital services were generally stable over that same period. Payments per service increased for most key hospital outpatient services, the main driver of the nearly 5 percent yearly growth in hospital outpatient payments per claim from 2005 to 2007, according to WCRI.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.
WCRI 955 Massachusetts Avenue Cambridge, Massachusetts 02139 617-661-WCRI (9274) Source: WCRI