Waltham, MA, June 30, 2025 – A new study from the Workers Compensation Research Institute (WCRI) sheds light on how the high-inflation period of 2021–2023 has influenced medical payments in workers’ compensation up to 2025, focusing especially on states that link their medical fee schedules to general economic inflation measures.

“With more data now available, we are better equipped to understand how the high inflation from 2021 to 2023 has affected medical costs in workers’ compensation and how different fee schedule update methods influence these outcomes,” said Sebastian Negrusa, vice president of research at WCRI. “This knowledge is relevant as policymakers and stakeholders address ongoing inflationary pressures.”

The study, Post-Inflation Trends in Medical Payments Through 2025—A WCRI FlashReport, examines how inflation and state fee schedule update methods—from general economic indexes like the Consumer Price Index and wage measures to medical-specific indexes like the Producer Price Index for health care services—have influenced medical cost growth in workers’ compensation since 2020. While general health care prices rose steadily at about 3 percent annually, the study explores why workers’ compensation payments showed greater variation across states.

The following are some of the questions the study addresses:

• How did workers’ compensation medical payments change following the first two years of the COVID-19 pandemic, and what drove those changes?
• Why did prices for nonhospital professional services in workers’ compensation grow faster in most states after 2021?
• What happened to the growth of workers’ compensation fee schedule rates for nonhospital professional services as general inflation slowed between 2023 and 2025?
• What factors contributed to the increase in ambulatory surgery center (ASC) and hospital payments between 2021 and 2023?
• How do fee schedules affect the growth of medical prices in workers’ compensation, particularly for nonhospital and hospital outpatient services?

This report draws on data from multiple sources. General and health care inflation figures come from the U.S. Bureau of Labor Statistics. Workers’ compensation data are based on WCRI’s CompScope™ studies and the Detailed Benchmark/Evaluation database, which includes claims from insurers, state funds, and self-insured employers. Nonhospital price trends are measured using WCRI’s Medical Price Index for Workers’ Compensation, and hospital outpatient trends are based on WCRI’s Hospital Outpatient Payment Index. Information on fee schedules is drawn from WCRI’s 2025 fee schedule study, RefMed® data, and Medicare data. The analysis spans trends from 2012 through 2025.

Click here for more information about this study or to purchase a copy. The report was authored by Dr. Rebecca Yang and Dr. Olesya Fomenko.

ABOUT WCRI

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Waltham, MA. Organized in 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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