Hospital Outpatient Cost Index for Workers' Compensation
slash state budgets due to rising healthcare costs, a recent study,
Outpatient Cost Index for Workers’ Compensation,
by the Workers Compensation Research Institute (WCRI) provides
policymakers and other stakeholders with a tool to indentify and
better understand hospital costs.
The WCRI study allows policy makers and other stakeholders
the ability to conduct more meaningful comparisons of hospital
outpatient costs across states, identify key cost drivers, and
measure the impact of reforms over time. The index measures
hospital outpatient and/or ambulatory surgical center (ASC) costs for
the most common surgeries performed in workers’ compensation cases.
Sample of Major findings:
States with no fee schedule regulation on
reimbursement had higher hospital outpatient/ASC costs than
states with fee schedules. The costs in states without fee
schedules were 27 percent to 73 percent higher than the median
of the study states with fee schedules.
States with fee schedule regulations that were
based on a percentage of charges had higher costs compared to
states with other types of fee schedules, such as per-procedure
ambulatory payment classification (APC) based
fee schedules, with the exception of Illinois.
After fee schedule changes, growth in hospital
outpatient/ASC costs resumed at faster rates in states with fee
schedule regulations that were based on a percentage of charges.
Significant variations in hospital outpatient/ASC
costs were also found across states. Compared with the 17 state
median, the average hospital outpatient/ASC cost per surgical
episode in Massachusetts—the state with the lowest costs—was 60
percent lower than the median study state, while the average
cost in Illinois—the state with the highest costs—was 45 percent
higher, as of 2009.
This study includes
17 large states that represent 60 percent of the workers’
compensation benefits paid in the U.S., and covers a seven-year
period from 2003 to 2009. The states included in the study are:
California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland,
Massachusetts, Michigan, Minnesota, New Jersey, North Carolina,
Pennsylvania, Tennessee, Texas, Virginia and Wisconsin.
Hospital Outpatient Cost Index for Workers’ Compensation.
Rui Yang and Olesya Fomenko. January 2012. WC-12-01