WORKERS' COMPENSATION MEDICAL PRICES WERE HIGHER AND GREW MORE RAPIDLY IN STATES WITHOUT MEDICAL FEE SCHEDULES, SAYS NEW WCRI STUDY

CAMBRIDGE, MA, March 29, 2012  –  The prices paid for medical professional services for injured workers were higher and rising faster in states without fee schedules compared with states that have them in place, according to a new study from the Workers Compensation Research Institute (WCRI), Medical Price Index for Workers' Compensation, Fourth Edition (MPI-WC).

The WCRI study is designed to help public policymakers and system stakeholders understand how prices paid for medical professional services for injured workers in their states compare with other states and know if prices in their state are rising rapidly or relatively slowly.  They can also learn if the reason for price growth in their state is part of a national phenomenon or whether the causes are unique to their state and hence, subject to local management or reform. 

“In documenting the growing prices paid for the medical care received by injured workers, this unique study also shows the effectiveness of medical fee schedules in controlling those costs,” said Dr. Richard Victor, executive director of WCRI.

For example, six states in the 25-state study—Indiana, Iowa, Missouri, New Jersey, Virginia, and Wisconsin—had no medical fee schedules as of 2011.  The prices paid for professional services in Virginia, Missouri, New Jersey, Iowa, and Indiana were 27 to 51 percent higher than the median of the study states with fee schedules and the prices in Wisconsin were more than twice the median of the study states with fee schedules, the highest of all the study states.

States without fee schedules also saw more rapid price growth over the 2002 – 2011 study period, with prices in Missouri, Indiana, Iowa, Virginia, and New Jersey rising 32 to 38 percent, compared with the median growth rate of 14 percent for the study states with fee schedules. The prices in Wisconsin experienced the most rapid growth among the 25 study states, rising 50 percent. 

The study also found that changes in fee schedules were an important factor driving changes in actual prices paid for professional services. 

In addition, the study reported that in states with certain services not covered by their fee schedules, the prices paid for those services often grew more rapidly than those for the services covered by the fee schedules. 

Unlike the consumer price index for medical care (CPI-M), which measures general prices paid for medical goods and services, the MPI-WC focuses only on the prices paid for the medical care that injured workers receive under their state’s workers’ compensation system. 

The MPI-WC tracks medical prices paid in 25 large states from calendar year 2002 through June 2011 for nonhospital, nonfacility services billed by physicians, physical therapists, and chiropractors.  The medical services fall into eight major groups: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological and neuromuscular testing, pain management injections, and emergency care. 

The 25 states included in the MPI-WC, which represent nearly 80 percent of the workers' compensation benefits paid in the United States, are Arizona, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Click here to download a free copy of this report. 

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