The insurance industry is applauding the signing of legislation in Indiana to contain workers' compensation costs.
HB 1320 was inked by Gov. Mike Pence over the weekend. The law imposes a fee schedule with a maximum reimbursement rate of 200 percent of the Medicare rate for treatments and procedures to workers' compensation claimants by medical service providers.
The American Insurance Association says the legislation addresses “problems which have been steadily mounting in Indiana in recent years.”
“This new standard will help control the increasing costs for medical care provided to injured workers in the state,” says, Steve Schneider, Midwest vice president for AIA, in a statement.
The AIA and Property Casualty Insurers Association of America (PCI) say the bill also tackles another big cost-driver—repackaged prescription drugs, which is a practice that “injects costs into the system without any discernible benefits to injured workers,” says Ann Weber, vice president of state government relation for PCI, in a statement.
“The new law provides that the maximum price for a repacked drug cannot be higher than the average wholesale price set by the original manufacturer,” explains Weber, who says the workers' compensation reform will begin to shift Indian in alignment with other states adopting similar fee schedules based on Medicare rates.
However, Weber says the reimbursement remains “very generous to hospitals.”
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