Waltham, MA, May 29, 2025 – As policymakers nationwide focus on the rising costs of health care, a new study from the Workers Compensation Research Institute (WCRI) reveals that hospital outpatient payments for workers’ compensation grew faster in states with fee schedules based on a percentage of hospital charges and in states without fee schedules.

“This study provides meaningful state comparisons at a time when many are considering or revising hospital fee regulations,” said Sebastian Negrusa, vice president of research at WCRI. “It offers a clear, evidence-based perspective on how different regulatory approaches influence cost growth and payment levels.”

The report, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 14th Edition, analyzes payments for common outpatient surgeries across 36 states, representing 88 percent of the nation’s workers’ compensation benefits. Covering data from 2005 to 2023, the study also compares workers’ compensation hospital payments to Medicare rates.

The following are among the major findings:

• Faster growth in states with charge-based fee regulations and in non-fee schedule states: From 2011 to 2023, growth in outpatient payments for common surgeries reached 61–81 percent among states with charge-based fee schedules, and 55–88 percent in non-fee schedule states, substantially higher than 24 percent in the median fixed-amount fee schedule state.
• Higher payments in states without fee schedules: Outpatient payments were 63 to 154 percent higher than the median of states with fixed-amount fee schedules. In these states, workers’ compensation paid $7,550 to $22,002 more per surgical episode than Medicare.
• Percent-of-charge states cost more: States like Alabama and Louisiana, using percent-of-charge-based fee schedules, paid 83 to 233 percent more than states with fixed-amount fee schedules.

• Wide variation vs. Medicare: Average workers’ compensation payments for a common group of outpatient surgeries ranged from 40 percent below Medicare in Nevada to 480 percent above in Alabama.

The report also tracks the impact of recent policy reforms. In May 2023, Florida expanded its fixed-amount fee schedule by eliminating charge-based reimbursement for unlisted procedures. This policy change led to a 6 percent decrease in hospital outpatient payments per surgical episode within the same year.

Click here for more information or to download the full report. The study was authored by Dr. Olesya Fomenko and Dr. Rebecca Yang.

ABOUT WCRI

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Waltham, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand.

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