Six states saw uptick in prices paid for professional medical services
The 35 states included in WCRI's study represent 87% of the workers' compensation benefits paid in the U.S.
Arizona, Illinois, Kentucky, Massachusetts, North Carolina and Texas had substantial changes (an increase or a decrease of 10% or more) in overall prices paid following major fee schedules, according to a study conducted by the Workers Compensation Research Institute (WCRI).
The study, ”WCRI Medical Price Index for Workers’ Compensation, 10th Edition,” is an annual series that benchmarks the actual prices paid for medical professional services delivered to injured workers across states. The 35 study states represent 87% of the workers’ compensation benefits paid in the U.S.
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Breaking down the substantial price changes
Many study states had substantial prices at the service-type level without materially impacting the overall price levels for professional services.
A fee schedule sets payment rates for medical services provided in workers’ compensation, usually with a list of procedure codes and the associated payment amounts. A workers’ compensation fee schedule has many design elements, including the basis of the fee schedule, conversion factor, regional variation and level of the fee schedule.
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Below is a brief summary of the changes in overall prices for Arizona, Illinois, Kentucky, Massachusetts, North Carolina and Texas.
- North Carolina implemented new fee schedule rates for professional services effective July 2015. The new fee schedule rates incorporate the 2015 Medicare rates with the revised service-type specific multipliers, ranging between 140 and 195% of Medicare; before this, the fee schedule rates for most types of professional services in North Carolina were set at 158% of the 1995 Medicare values. The overall prices paid for professional services in North Carolina increased by 17% from 2014 to 2016 following this fee schedule change.
- Kentucky discontinued the use of relative values from Medicare’s resource-based relative value scale for its professional fee schedule in June 2014. Instead, it transitioned to state-specific relative values based on historical data from FAIR Health commercial database values. Following this policy change, the overall prices paid for professional services in Kentucky increased by 19% from 2013 to 2015.
- Arizona implemented increases in fee schedule rates for evaluation and management, physical medicine and certain surgeries in October 2013. The overall prices paid for professional services in Arizona increased by 10% from 2013 to 2014 following this fee schedule change.
- In Sept. 2011, the Illinois workers’ compensation fee schedule rates for all types of medical services underwent an across-the-board decrease of 30%. Following this policy change, the overall prices paid for professional services in Illinois decreased by 27% from 2010 to 2012.
- In 2011, the fee schedule rates in Texas increased for most professional services. Following this fee schedule increase, the overall prices paid for professional services in Texas increased by 16% from 2010 to 2011.
- Massachusetts increased the fee schedule rates for most professional services effective April 2009. The overall prices paid for professional services increased by 15% from 2008 to 2010 following this fee schedule change.
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Other key findings
- Prices paid for a similar set of professional services varied significantly across states, ranging from 26% below the 35-state median in Florida to 158% above the 35-state median in Wisconsin in 2017.
- Additionally, states with no fee schedules for professional services had higher prices paid compared with states with fee schedules (39 to 168% higher than the median of the study states with fee schedules in 2017).
To view the study in full, a copy of the report can be downloaded and found on WCRI’s website.
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