Results from Recent NCCI Studies
At the 2019 NCCI Annual Issues Symposium, Barry Lipton, Practice Leader and Senior Actuary for NCCI discussed a variety of recent NCCI studies.
Group Health vs Workers’ Comp Pricing
There are some substantial differences in how these plans are regulated. Much of group health is regulated on the Federal side, while workers’ comp is entirely regulated by the states.
Both Group Health and Workers’ Comp have provider networks, drug formularies and utilization review. Workers’ comp has fee schedules and a focus on return to work. Group health requires patients to share the costs.
The study showed that price differences between group health and workers’ compensation were mainly driven by quantity of services differences not fee for service differences. On average, workers’ compensation prices were about 12% higher per service than group health. However, workers’ compensation performed 60% more services on similar injuries than group health.
The study showed significant differentiation between states when it came to the variation in price, quantity and costs of treatment for workers’ comp vs group health.
There were also significant differences when it came to the type of treatment. For example, with physical medicine treatment the price differential was only 5% but the utilization was 168% higher. Workers’ compensation patents were 50% more likely to receive PT visits and they received 20% modalities per visit.
NCCI Experience Rating Modification
The current NCCI mods are good predictors of loss outcomes across all industries and Mod types. Their study showed that before applying the Mods, there is wide variation in loss ratios between industries. However after applying the Mods the loss ratios are nearly identical.
The study also showed that a longer claims history brings even more predictive power to the Mod.
NCCI defines Mega Claims as losses in excess of $10 million incurred. There are not many of these claims, but there are starting to see more of them. Their studies do not include large deductible or self insured losses. They saw less of these losses in 2018 vs 2017 valued at 24 months.
NCCI is collaborating with other industry organizations to further study these losses and hopes to publish more by the end of the year.
You can read more information about these studies on the NCCI web site HERE