This study, which analyzes workers’ compensation medical payments to hospitals and surgery centers in Florida , was done at the request of the Florida Department of Insurance. Earlier WCRI studies have shown that 1) the Florida medical fee schedule for non-hospital providers is among the lowest in the nation; and 2) the prices paid to Florida hospitals are typically higher than either prices paid to hospitals in seven other large states previously studied (for services other than room and board) or prices paid to non-hospital providers in Florida for similar services (as defined by CPT codes).

This report provides information about what share of medical payments in Florida go to hospital and non-hospital providers and analyzes the distribution of the payments among hospital inpatient versus outpatient services.

Among our findings: 

• Hospitals receive at least 45 percent of the total workers’ compensation medical payments, and probably more than 50 percent. This is a higher share than in most other large states studied by WCRI.
• The rate at which hospital providers are paid depends on whether the services are provided on an outpatient or inpatient basis. Among inpatient services, it further depends on whether the bill is greater than $50,000 (and subject to a maximum payment of 75 percent of charges) or is less than or equal to $50,000 and is covered by the per-diem rates. Outpatient hospital services are paid, on average, at 61 percent of charges, largely as a result of negotiated arrangements with payors and networks.
• By contrast, largely as a result of the fee schedule limits, non-hospital providers, as a group, are paid at a rate that averages 47 percent of charges.  Based on a special (and not necessarily representative) sample of 240 inpatient bills, only one-quarter of eligible bills are paid at the per diem rate. The remaining bills are generally paid at amounts lower than the per diem due to network discounts. These discounts typically range from 5 to 10 percent below the per diem, but may be as high as 50 percent in some instances. Of the bills that exceed $50,000, only 15 percent of these bills were paid at 75 percent of charges. The remaining 85 percent are paid at less.
• Ambulatory surgery centers receive 3.4 percent of total medical payments, paid at a rate of approximately 55 percent of charges. The average payment per claim to these centers is $2,010.

FlashReport: Analysis of Payments to Hospitals and Surgery Centers in Florida’s Workers’ Compensation. Stacey Eccleston and Xiaoping Zhao. December 2002. FR-02-03.

Copyright: WCRI