What's Happening?
A report by the Workers Compensation Research Institute (WCRI) indicates an increase in medical costs per claim across 18 states. This rise follows a period of stability post-pandemic and is driven by increased medical utilization, prices, and updates
to state fee schedules. Notably, California experienced a 5% increase in medical payments per claim, while Delaware saw a 7% annual growth between 2021 and 2023. Pennsylvania reported a 14% increase in 2023, influenced by updates to the state's medical fee schedule. Wisconsin also saw a 6% annual increase from 2021 to 2023, following legislative changes introducing a medical fee schedule for hospital services.
Why It's Important?
The rising costs of workers' compensation medical claims have significant implications for businesses and employees. Increased medical payments can lead to higher insurance premiums, affecting company budgets and potentially leading to reduced benefits for workers. The changes in state fee schedules and medical utilization reflect broader trends in healthcare costs, impacting the financial stability of workers' compensation systems. Stakeholders, including employers and insurers, must adapt to these changes to manage costs effectively while ensuring adequate care for injured workers.
What's Next?
States may continue to adjust fee schedules and policies to address rising medical costs. Employers and insurers will need to strategize to mitigate the financial impact, possibly through negotiations with healthcare providers or adjustments in coverage plans. The ongoing analysis by WCRI and similar organizations will provide insights into effective cost management practices. Legislative actions may be considered to balance cost containment with quality care for injured workers.
Beyond the Headlines
The increase in medical claims costs highlights the need for comprehensive healthcare reform, addressing the root causes of rising prices and utilization. It underscores the importance of collaboration between state governments, healthcare providers, and insurers to develop sustainable solutions. The focus on non-COVID-19 claims suggests a shift in healthcare priorities, emphasizing the need for robust systems to manage diverse medical needs.
