MEDICAL PAYMENTS PER CLAIM FOR WORKERS’ COMPENSATION IN LOUISIANA HIGHER THAN TYPICAL, SAYS NEW WCRI STUDY

CAMBRIDGE, MA, July 15, 2009   –   Medical payments per workers’ compensation claim in Louisiana were higher than most study states, largely the result of higher utilization and higher prices paid for services that were delivered in the majority of claims—such as office visits, diagnostic tests, and physical medicine, according to a new study from the Workers Compensation Research institute (WCRI).

The study, CompScope^TM Medical Benchmarks for Louisiana, 9th Edition, reported that medical costs per claim in Louisiana had been relatively stable for several years until 2006, when medical costs per claim grew six percent.

The Cambridge, Mass.-based WCRI observed that recent policy debates have revolved around the fee schedule and the tools that payors have to manage medical care and costs, noting that the information in the study may be helpful to policymakers as those issues continue to be considered.

The study found that medical costs per claim (for all claims) were 32 percent higher in Louisiana than in the median of the other 13 states in the study.

For claims with more than seven days of lost time, medical costs per claim in Louisiana were 14 percent higher than typical. One factor that may have contributed to that result was that injured workers in Louisiana were off work longer than in other study states and likely received ongoing medical treatment during that time.

For example, the study said that the average duration of medical treatment was 46 weeks in Louisiana, about 6.5 weeks longer than in the typical study state. Similarly, the duration of physical therapy treatment was 26 weeks in Louisiana, 30 percent longer than typical.

A key reason for the higher medical payments per claim was higher prices paid to nonhospital providers. The study pointed out that even though the Louisiana fee schedule has not significantly changed rates since 1994, prices paid in Louisiana were unusually high for some services and typical for others.

Prices paid for many physician, chiropractic, and physical therapy services were higher than typical of the study states. For example, prices paid for radiology services and physical medicine were 14 to 25 percent higher than in the median study state, consistent with the higher-than-typical fee schedule rates for those service groups.

Another key driver of higher medical payments per claim was higher utilization for some services, according to the study.

For example, in Louisiana there were 19 percent more physician office visits and 21 percent more visits to physical/occupational therapists per claim with these services than in the typical study state.

More cases in Louisiana involved diagnostic services, with somewhat more visits per claim. About 80 percent of claims involved at least one minor radiology procedure (such as X rays and ultrasounds) compared to 72 percent for the typical state, and 46 percent of claims involved major radiology (CT scans and MRIs) compared to 42 percent in the typical state.

Utilization for neurological testing was 40 percent higher than the median study state because of more services billed at each visit (7.6 in Louisiana compared to 5.5 in the typical state) as well as a more resource-intensive set of services billed.

In addition, 11 percent of claims with more than seven days of lost time involved an inpatient stay in Louisiana, highest among the study states and compared to 8 percent in the median study state.

Payments per claim for most hospital outpatient services were higher than typical, particularly for radiology and facility-related services—mainly because of higher payments per service.

The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, health care and disability issues. Its members include employers, insurers, and governmental entities, insurance regulators and state administrative agencies, as well as several state labor organizations.