Claims News Service, Feb. 13, 2008 — The Workers Compensation Research Institute (WCRI), an independent, not-for-profit research organization that provides information about public policy issues involving workers' compensation systems, has released the eighth edition of its CompScope report. In this edition, two main questions are examined: How does the performance of a state system compare with that of other states and how is workers’ compensation system performance changing over time?

The states included in this edition are Arkansas, California, Florida, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin, which WCRI says represent more than 50 percent of the nation’s workers’ compensation benefit payments. T he report can help policymakers and others benchmark a state ’s system performance or a company’s workers’ compensation program. They said the benchmarks they provide also offer a n excellent baseline for tracking the effectiveness of policy changes and identifying important trends.

Below are a few of the findings and conclusions reached, which used claims filed between 2000 and 2005.

Overall costs per claim in Massachusetts were typical among the 14 study states. When examining changes over time, however, the study found that costs per claim grew rapidly in four out of five study years, including a nearly 10 percent increase in the most recent year (2005 claims evaluated in mid 2006). This recent growth was driven by rapid increases in medical costs per claim (nearly 11 percent); indemnity benefits per claim with more than seven days of lost time (10 percent increase); and the cost of delivering medical and indemnity benefits to injured workers (nine percent increase).

Injured workers received their first indemnity payments faster in Wisconsin than in most other study states. Fifty-three percent of injured workers in Wisconsin were issued their first checks within 21 days of injury, compared to the 14-state median of 41 percent. Faster payments may have been influenced by the state agency’s efforts to monitor timely payments and to provide payors with feedback about their performance.

Two offsetting factors were at work in Maryland, which largely explained why the overall costs per claim in Maryland were typical of the states in the study. Medical costs per claim with more than seven days of lost time in Maryland were among the lowest of the study states—33 percent lower than the 14-state median. However, the state had a higher proportion of claims that received income benefits (claims with more than seven days of lost time)—8 percentage points higher than the 14-state median of 21 percent.

The average cost per claim of delivering medical and income benefits to injured workers in Pennsylvania was 22 percent higher than the typical study state for 2003 claims with more than seven days of lost time (evaluated in mid 2006), driven mainly by higher litigation expenses. Although Pennsylvania was not among the most litigious states in the study, defense attorney payments were 34 percent higher than the 14-state median. These higher payments may indicate that more hours of billable time were required to resolve cases in Pennsylvania, suggesting that the state has a somewhat more expensive and complex dispute resolution process.