GROWTH IN TEXAS WORKERS COMPENSATION CLAIM COSTS
REFLECTS IMPACT OF REFORMS, SAYS NEW STUDY
CAMBRIDGE, MA, December
20, 2011 –
The average cost of a workers compensation claim in Texas
grew five percent in 2009, reflecting the impact of recent
medical fee schedule increases and possibly some effect of
the recession, according to a new study by the Workers
Compensation Research Institute (WCRI).
While the modest growth in the average cost
per claim is similar to the two prior years, the drivers of
growth differed according to WCRI’s study, Monitoring the
Impact of Reforms and Recession in Texas: CompScope™
Benchmarks, 12th Edition.
Growth in indemnity benefits per claim —
payments for lost wages — accounted for nearly two-thirds of
the change in total costs per claim from 2006 to 2007,
reflecting the increase in the weekly statutory maximum
benefit under House Bill (HB) 7, effective October 2006.
From 2007 to 2008, growth in medical payments
per claim accounted for about one-half of the increase in
total costs per claim. This mainly reflects fee schedule
increases under HB 7, most of which applied to services
provided on or after March 1, 2008.
Growth in medical payments per claim
accounted for 46 percent of the increase in total costs per
claim from 2008 to 2009, while growth of indemnity benefits
accounted for 41 percent. Medical payments per claim in
Texas rose seven percent in 2008 after being stable in 2007
and following several years of decreases beginning in 2002.
That increase is related in part to increases in fee
The study reported that the recent growth in
indemnity benefits per claim may be related to the
recession, while earlier growth reflects an increase in the
maximum benefit under HB 7.
Indemnity benefits per claim grew five
percent from 2008 to 2009, in part the result of a three
percent increase in the duration of temporary disability —
nearly one-half week. This was the first increase in
temporary disability duration in many years and may be
related to the recession.
Medical payments in Texas dropped
significantly because of reform legislation (HB 2600 in 2001
and HB 7 in 2005), along with increased payor focus and
effort on managing medical care. Prior to the reforms,
Texas medical payments per claim were the highest among 16
states studied by WCRI. In 2009, medical payments per claim
were 16 percent lower than the typical state.
The Cambridge-based WCRI is recognized as a
leader in providing
high-quality, objective information about public policy
issues involving workers' compensation systems.
The Workers Compensation Research Institute
(WCRI) is an independent, not-for-profit research
organization based in Cambridge, MA. Since 1983, WCRI has
been a catalyst for significant improvements in workers'
compensation systems around the world with its objective,
credible, and high-quality research. WCRI's members
employers; insurers; governmental entities;
companies; health care providers;
regulators; state labor organizations; and state
administrative agencies in the U.S., Canada, Australia and