The last five years have been good ones for Florida's employers. Workers' compensation costs are down dramatically, claim frequency continues to drop, and premiums have followed the same trajectory. However, all good things must come to an end, and in this case the event that triggers the end may well be the state's recent decision to increase reimbursement for outpatient procedures.

On November 20, Florida's workers' compensation regulatory bosses (the Three-Member Panel) approved a change in the way workers' compensation payers will reimburse outpatient facility bills. According to www.WorkCompCentral.com, Florida regulators will “begin drafting a rule to base outpatient fees paid to hospitals on the Medicare Outpatient Prospective Payment System. But the fees would be adjusted using Florida-specific multipliers based on the usual-and-customary charges now employed to establish outpatient fees… . Under the new system, the Medicare-based fees would be adjusted by a new factor created by a hospital's usual and customary charges, by 174 percent for outpatient surgeries and 395 percent for other outpatient services.”

Interestingly, an analysis by the National Council on Compensation Insurance (NCCI) of the proposed change provided to the Department of Financial Services (DFS) in a Nov. 4 letter predicts it will be “premium neutral.” That is, the added cost due to higher prices won't materially affect premiums. I'd note that this doesn't address the already sky-high profits hospitals are making on workers' compensation in Florida, profits that make it the best payer by far in the Sunshine State. It also fails to adequately address the likelihood that increased reimbursement will lead to more procedures performed in more lucrative settings.