At the 2017 WCRI Annual Issues and Research Conference a panel presented highlights from numerous WCRI studies of individual state workers’ compensation systems. The panel was:
- Ramona Tanabe – WCRI
- Carol Telles – WCRI
- Will Monnin-Browder – WCRI
- Rebecca Yang – WCRI
The CompScope study states are IN, TX, WI, AR, MI, FL, NJ, MN, KY, MA, VA, CA, IA, IL, PA, LA, NC, GA. The following information is based on the CompScope studies of these states.
Numerous WCRI studies highlight that there is less use of hospital care in workers’ compensation. This follows trends in healthcare with increase use of free-standing ambulatory surgical centers. WCRI studies show that back in 2001 the number of inpatient hospital admissions and outpatient hospital visits were almost the same. Since that time, the usage of outpatient facilities has increased significantly while inpatient admissions have decreased. Between 2000 and 2014 hospital outpatient treatment increased 32.9% and inpatient admissions have decreased 0.1%
Although only a small percentage of claims receive inpatient hospital care, the cost of such claims have been increasing. From 2009-2014 studies showed a median increase in costs for inpatient episodes of 24% across study states. The highest cost state was Florida at 52% increase and the lowest was Louisiana at a 28% decrease.
Studies also showed that ambulatory surgical centers were 15% lower in costs than hospitals for the same surgical services. Physical medicine in a hospital setting was up to 50% more than in a non-hospital setting and radiology services were 2-4 times higher in hospitals than non-hospitals.
Indemnity Benefits Per Claim
According to recent CompScope studies, Georgia had the highest indemnity cost per claim among study states at $28,003 and Indiana had the lowest cost at $10,809. The median state was $18,424.
In 2013, Indiana enacted legislation to increase their maximum weekly indemnity benefit per claim. Over 3 years, the maximum benefit rate increased a total of 20%. Based on the increase in maximum benefit rates, approximately 10% of injured workers have benefits limited by the maximum benefit rate. This puts them in line with the median of CompScope states. Prior to increasing the over 20% of workers had benefits capped by the maximum rate.
In 2011, legislation in North Carolina was designed to reduce indemnity benefits which had been growing rapidly. North Carolina’s system is different than most states in that it contains elements of both PPD and wage loss in their benefit structure. The average indemnity cost per claim before the 2011 reforms was $26,666 and after the reforms it was $25, 305. This is a decrease of 5.1%.
Worker Attorney Involvement
There is wide variation in the percentage of indemnity claims with worker attorney involvement across states. The highest states are IL (52%), NJ (49%) and the lowest were WI (13%) and TX (14%). The median across study states was 29%.
Lower attorney involvement in Texas is based on many issues. There are caps on attorney fees in Texas for both plaintiff and defense attorneys. Texas also prohibits lump sum settlements of claims, which is the main driver for attorney representation. Texas also has an efficient dispute resolution process that does not necessitate attorney involvement. In Wisconsin, the lower attorney involvement is likely due to limits on lump sum settlements, and an administrative process for resolving dispute. Thus having a more self-executing system that limits settlements significantly reduces attorney involvement.
The study also noted a strong correlation between worker attorney involvement and defense attorney involvement. That is not surprising.