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Workers’ comp medical payments grew about 3 percent a year here

Thursday, Dec 7, 2017

* Press release…

Medical payments per workers’ compensation claim in Illinois grew 3.1 percent per year on average from 2012 through 2015, according to a recent study by the Workers Compensation Research Institute (WCRI).

In all, medical payments per workers’ compensation claim were higher in Illinois than the median for the states included in the study.

The study, CompScope™ Medical Benchmarks for Illinois, 18th Edition, examined medical payments, prices, and utilization in Illinois compared with 17 other states.

“Recent public policy discussions in Illinois have focused on reducing workers’ compensation costs and making the state more attractive to businesses,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “Among the areas of interest are causation of the injury, medical fee schedules, insurance premiums, and permanent partial disability benefits.”

The following are among the study’s other findings:

    * Physical medicine was a key driver of higher-than-typical medical utilization, accounting for more visits per claim and services per visit in Illinois than in other states studied.
    * Payments per claim for surgery (professional services) and facility payments to ambulatory surgery centers were higher in Illinois than in other study states.
    * Prices paid for professional (nonhospital) services were lower than typical for evaluation and management (office visits), but higher for other services. These results were related to fee schedules.

WCRI studied medical payments, prices, and utilization in 18 states, including Illinois, looking at claim experience through 2016 on injuries that occurred mainly from 2010 to 2015. WCRI’s CompScope™ Medical Benchmarks studies compare payments from state to state and across time.

More info is here. The other states looked at were: Arkansas, California, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin.

- Posted by Rich Miller        

  1. - PJ - Thursday, Dec 7, 17 @ 9:45 am:

    How boring would it be to work at the “workers compensation research institute?”

    Hell of a Christmas party at the institute, I imagine.

  2. - 39th Ward - Thursday, Dec 7, 17 @ 9:54 am:

    The opportunity for expense savings in medical care and rehabilitation services is huge. Just look at what another “blue state” like California did in 2012, with a Democratic legislature and governor. CA’s workers compensation system is still costly, but it is being turned around while still maintaining benefits to injured workers. If the Rauner turnaround agenda had focused on medical and rehab costs it might have had a better chance of enactment. On the other hand, this is Illinois where the hidden hand shows up in unexpected places to maintain the status quo.

  3. - DuPage - Thursday, Dec 7, 17 @ 9:55 am:

    They need to compare WC to the cost of non-WC for the same procedure in each state. Costs such as real estate, salaries for nurses and physical therapists, also figure in.

  4. - Perrid - Thursday, Dec 7, 17 @ 10:07 am:

    DuPage, there would be a decent amount of apples to oranges in that analysis. Just off the top of my head, there’s a large amount of paperwork and extra services that are required for WC, as in more overhead for the provider, than in regular services. I have no doubt that there is bloat in the fee schedule, but comparing it to a different program is not likely to be very accurate.

  5. - Anonymous - Thursday, Dec 7, 17 @ 10:07 am:

    Press Release from who?

  6. - The Real Just Me - Thursday, Dec 7, 17 @ 10:43 am:

    Despite what WCRI may have found regarding increasing WC medical costs from 2012 through 2015, NCCI (National Council on Compensation Insurance), the official rate making organization for workers’ comp premiums in IL, recommended rate reductions of over 40% and found that loss costs have decreased over 36% since 2011. So even if medical costs have gone up, there must have been other reductions that caused the large rate and loss cost reductions.

  7. - Anonymous - Thursday, Dec 7, 17 @ 10:43 am:

    And the WC medical fee board just voted 5-3 to increase medical reimbursements by 30 percent across the board. It now is before the Work Comp Commission next week.

    Nothing like jacking up medical costs even more…

  8. - Anonymous - Thursday, Dec 7, 17 @ 10:45 am:

    The loss costs are because the number of claims is decreasing significantly and there are fewer claims in manufacturing and construction because of the job loss.

  9. - Hyperbolic Chamber - Thursday, Dec 7, 17 @ 10:53 am:

    Without spending the $45 to purchase and then peruse the study, we are flying blind for the time being.

    We can, however, make one quick observation: Average annual medical inflation (per the Bureau of Labor Statistics) from 2012 through 2016 was 2.99%. So, a 3.1% rate of medical inflation in the IL Workers’ Comp system is pretty darn close to medical inflation nationwide over that time. #roundingerror

  10. - Name Withheld - Thursday, Dec 7, 17 @ 11:15 am:

    ==The loss costs are because the number of claims is decreasing significantly and there are fewer claims in manufacturing and construction because of the job loss.==

    Is there research to verify this?

  11. - The Real Just Me - Thursday, Dec 7, 17 @ 11:22 am:

    IL law limits “medical inflation” in WC cases to the annual increase in the “Consumer Price Index-U.” 820 ILCS 305/8.2(a). CPI-U is almost always lower than CPI-Medical. According to the Workers’ compensation Commission website (”Frequently asked questions regarding the medical fee schedule”),from 2012 through 2016, CPI-U was 8.88% and CPI-Medical was 14.44%. By these numbers, WC medical expenses increased 38% less than other medical expenses for identical treatment.

  12. - don the legend - Thursday, Dec 7, 17 @ 11:58 am:

    Since the Governor is not in charge we won’t be hearing his assessment of this situation.

    (The preceding statement may be used for any study on any subject involving issues of state governance)/s

  13. - TrumpsSmallHands - Thursday, Dec 7, 17 @ 12:32 pm:

    ==Name Withheld

    I don’t have the report at my desk but there have been a number of studies showing that claims per worker and claims severity have been declining due to several factors.

    1. Changing demographic mix of workers, the largest population cohort is currently those 25 to 29 years old. As the death rates of the baby boomer cohorts increased (due to age) in the early to mid 2000s the largest population cohort changed. Up until 20005-2010 the largest population cohorts were 50 to 54 and 55 to 59. The change in age mix of workers has reduced the comorbidity rates that drive up injury cost.

    2. High injury / injury severity jobs (Manufacturing, Construction) have declined as a percentage of the work force.

    3. Better workplace safety programs have also decreased the number and severity of workplace injuries.

    Those three trends combine to result in fewer work comp claims which drives down total claims cost even as per claim medical costs have increased.

  14. - the Patriot - Thursday, Dec 7, 17 @ 1:02 pm:

    We have many benefit neutral things we can do to work comp, but using reform as a talking point with no clue how it works does not help.

    IL has more Insurance companies writing work comp than any other state. This is because as predicted, the 2011 amendments did not tie savings to premiums.

    The democrat legislature cut workers, cut doctors, and cut attorneys all so out of state insurance companies can rake the reward.

    We can save employers millions in IL in about 10 minutes. 1. Get a Governor interested in running the Commission under his control more efficiently; 2. Add one sentence to the 2011 reforms requiring insurance companies to ties savings to premiums.

    The reality is the Governor appointing conservative insurance defense lawyers to the Commission combinded with competition will eventually drive work comp premiums down.

  15. - blue dog dem - Thursday, Dec 7, 17 @ 2:21 pm:

    You want real reform. Simple. And fair. Change causation standards.

  16. - The Real Just Me - Thursday, Dec 7, 17 @ 2:31 pm:

    Blue Dog? “Medical payments per workers’ compensation claim in Illinois grew 3.1 percent per year on average.” How does causation standard have any effect at all on average cost per claim? Causation standard eliminates claims; it does not reduce the average cost per claim.

  17. - blue dog dem - Thursday, Dec 7, 17 @ 2:58 pm:

    Eliminating claims will lower work comp rates. That is real reform.

  18. - Rabid - Friday, Dec 8, 17 @ 6:02 am:

    How can you reform the law when the insurance and medical run the program

  19. - The Real Just Me - Friday, Dec 8, 17 @ 10:38 am:

    Blue Dog, fewer claims do not equate to lower rates. There are substantially fewer claims than there were 10 years ago, but according to employers, premiums are no lower.

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