Cambridge, MA, May 18, 2023 ― Today, the Workers Compensation Research Institute (WCRI) released an updated version of its study that compares prices paid for a similar set of medical professional services for treating injured workers across 36 states and monitors price changes from 2008 to 2022.
“The objectives of this study are twofold,” said Ramona Tanabe, WCRI’s president and CEO. “The first is to help policymakers and stakeholders conduct meaningful comparisons of prices across states and track the price changes in their states. The second objective is to discuss the price comparison results and price trends in relation to the principal policy tool for regulating prices—fee schedules.”
The study, WCRI Medical Price Index for Workers’ Compensation, 15th Edition (MPI-WC), focuses on professional services (evaluation and management, physical medicine, surgery, major and minor radiology, neurological testing, pain management injections, and emergency care) billed by physicians, physical therapists, and chiropractors.
The following are among the study’s findings:
- Prices paid for a similar set of professional services varied significantly across states, ranging from 31 percent below the 36-state median in Florida to 163 percent above the 36-state median in Wisconsin in 2022.
- States with no fee schedules for professional services had higher prices paid compared with states with fee schedules—38 to 173 percent higher than the median of the study states with fee schedules in 2022.
- Most states with no fee schedules experienced faster growth in prices paid for professional services compared with states with fee schedules—the median growth rate among the non-fee schedule states was 35 percent from 2008 to 2022, compared with the median growth rate of 12 percent among the fee schedule states.
- Many states had significant price growth for evaluation and management starting in 2021, following the fee schedule increase by the Centers for Medicare & Medicaid Services and the revisions to the coding guidelines by the American Medical Association.
- Eight study states (Arizona, Illinois, Kentucky, Massachusetts, New York, North Carolina, Texas, and Virginia) had substantial changes in overall prices paid following major fee schedule changes during the study period.
This edition covers 36 states that represent 87 percent of the workers’ compensation benefits paid in the United States. These states are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.
The method for developing the MPI-WC is similar to that of the Consumer Price Index for medical care services (CPI-M) and Producer Price Index for Health Care Services (PPI), published by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS). All of these price indices measure changes in price while holding utilization constant over the period studied. However, the WCRI MPI-WC is an in-depth, independent measure that provides a more relevant benchmark of medical inflation in workers’ compensation.
The authors of this study are Dr. Rebecca Yang and Dr. Olesya Fomenko. To download a FREE copy of this report, visit WCRI’s website at https://www.wcrinet.org/reports/wcri-medical-price-index-for-workers-compensation-15th-edition-mpi-wc.
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in 1983, the Institute does not take positions on the issues it researches. 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.