Medical Payments in Workers’ Compensation During the Recent Inflationary Period—A WCRI FlashReport

By Olesya Fomenko, Rebecca (Rui) Yang

June 13, 2024 Related Topics: Fee Schedules, Medical Costs

In recent years, inflation in the workers’ compensation system has been a concern, as inflation in the overall economy spiked at 9 percent in June 2022. This new report examines the most recent trends in medical inflation to assess whether there was any accelerated medical price growth in workers’ compensation due to a potential lagged effect of the overall inflationary trends. The study offers a framework for workers’ compensation policymakers and stakeholders when considering changes in medical payments in the near- or medium-term.

The study focused on the period from 2012 through 2023 for the discussion of general inflation in the overall population and in the health care sector, as well as the growth in the price component of workers’ compensation medical costs. For the discussion of trends in workers’ compensation medical payments per claim, WCRI studies provide information for claims from 2012 to 2022, with experience through March 2023.

Medical Payments in Workers’ Compensation During the Recent Inflationary Period—A WCRI FlashReport. Olesya Fomenko and Rebecca Yang. June 2024. FR-24-01.


Copyright: WCRI

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Research Questions:

  1. What are the main factors likely contributing to the workers’ compensation medical payment changes over recent years and in the near future?
  2. What impact did different approaches to updating fee schedules have in response to inflationary changes?
  3. What impact did higher inflation in the general economy have on growth in workers’ compensation prices in states that update their fee schedules based on measures of price changes in the general economy?
  4. In the face of ongoing provider consolidation trends and medical labor shortages, what will likely continue to be the main driver of medical cost growth in workers’ compensation and in general health care?

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