NU Online News Service, Jan. 29, 10:22 a.m. EST

Workers' compensation reforms passed in Texas during the early and mid part of the last decade have led to a trend of decreases and stabilization in the medical costs per claim, according to the Workers' Compensation Research Institute.

Cambridge, Mass.-based WCRI said in its "CompScope Benchmarks" report for Texas that, "In 2001, prior to the reforms, medical costs per claim in Texas were highest among the study states." Later in the decade, the report said, medical costs per claim in Texas were lower than the typical state for claims with more than seven days of lost time, which WCRI called "a dramatic shift."

After several years of decreases due to the legislative reforms, medical costs per workers' compensation claim in Texas were stable in 2007, WCRI said.

HB 2600, passed in 2001, instituted reforms in Texas such as a certification system of doctors to be included on an approved list to provide health care under the workers' comp system; the creation of fee-for-service regional health care delivery networks to deliver care under the workers' compensation system; and pre-authorization requirements for certain procedures.

HB 7, passed in 2005, established certified workers' comp health care networks and adopted evidence-based treatment guidelines.

Medical costs per claim fell 19 percent from 2002 to 2006, the report said, "largely due to fee schedule decreases under HB 2600 combined with an increased management of medical care by payors through utilization review and other means."

But WCRI noted that an increase in the 2008 medical fee schedule conversion factors–to reflect increases in practice expenses since 2002–and a separate conversion factor established for surgery may result in a one-time increase between 16 percent and 41 percent in prices paid for services by nonhospital providers.

The report said, "We estimate that even if surgical prices paid increased by 41 percent on average, Texas would still have lower-than-typical prices paid for surgery services."

Medical cost containment expenses per claim have also continued to "grow rapidly," WCRI said. In fact, the report noted that, at an average of $2,818, Texas had the highest medical cost containment expenses per claim among study states in 2007-2008.

The report commented, "One might wonder if this merely reflects a transfer of dollars from one type of cost to another. However, the combination of the medical cost containment expenses and medical costs per claim resulted in a decline in medical-related costs per claim from 2002 to 2007."