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State Fee Schedules Control Workers’ Comp Costs, Survey Finds

January 15, 2008
Related Topics: Workers' Compensation, HR Services and Administration, Workforce Planning, Compensation, Latest News
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State workers’ compensation fee schedules are effective in controlling medical costs but have a limited ability to bring workers’ comp utilization levels for similar injuries closer to group health levels, according to a study released Thursday, January 10, by NCCI Holdings Inc.

The study from Boca Raton, Florida-based NCCI found that most states reimburse workers’ comp medical care at prices marked above what group health plans pay. Additionally, most states without fee schedules reimburse medical providers at a higher markup over group health than states with fee schedules.

But when comparing workers’ comp and group health costs for similar injuries, higher utilization in workers’ comp accounts for more of the difference than the price markups over group health, the NCCI reported. That finding holds true regardless of the type of fee schedule used in a state or whether a state has a fee schedule.

“We conclude that fee schedules by themselves have a very limited ability to bring workers’ comp utilization closer to group health levels,” the NCCI said.

However, introducing fee schedules can play a significant role in reforming workers’ comp systems, the NCCI said.

Among states with fee schedules, reimbursements for doctor office visits and physical therapy are priced at about the same amount as in group health. Radiology treatments and surgery, however, show higher markups above group health than other medical services.

The study, “Making Workers’ Compensation Medical Fee Schedules More Effective,” is available at www.ncci.com/ncci/index.aspx.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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