Prices paid for medical professional services vary significantly across states, ranging from 26 percent below the median in Florida to 158 percent above median in Wisconsin, according to a 35-state study.
States with no fee schedules for professional services had higher prices paid compared with states with fee schedules—39 to 168 percent higher than the median of the study states with fee schedules in 2017.
Those are two findings from a new 179-page report from the Workers’ Compensation Research Institute (WCRI) that looks at changes in prices paid for medical professional services as well as the impact of fee schedule and network changes on price trends. The study, WCRI Medical Price Index for Workers’ Compensation, 10th Edition (MPI-WC), compares medical prices paid in 35 states and tracks price changes in most states over a 10-year span from 2008 to 2017 for professional services billed by physicians, physical therapists and chiropractors.
The medical services fall into eight groups: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological testing, pain management injections and emergency care.
According to WCRI, medical professional services costs typically account for 43 percent of total workers’ compensation medical expenditures. They do not include costs billed by hospitals or ambulatory surgery centers for medical equipment or pharmaceuticals.
Ramona Tanabe, WCRI’s executive vice president and in-house counsel, said the study should be useful for policyholders and stakeholders wanting to see how their states’ workers’ compensation medical prices have changed over time and for those wanting to understand the impact of medical fee schedules.
Seven of the 35 sates studied had no medical fee schedule in 2017: Indiana, Iowa, Missouri, New Hampshire, New Jersey, Virginia and Wisconsin. The overall prices paid in these seven states were from 39 to 168 percent higher that the median of state with fee schedules.
The authors of this study are Dr. Rebecca Yang and Dr. Olesya Fomenko.
Other findings from the study include:
- Changes in prices paid for professional services exhibited variation across states, spanning between a 17 percent decrease in Illinois and a 39 percent increase in Wisconsin over the time period from 2008 to 2017.
- Most states with no fee schedules experienced faster growth in prices paid for professional services compared with states with fee schedules—the median growth rate among the non-fee schedule states was 30 percent from 2008 to 2017, compared with the median growth rate of 6 percent among the fee schedule states.
This study also discusses the price trends in a number of states with major fee schedule changes, namely Arizona, California, Colorado, Illinois, Kentucky, Massachusetts, North Carolina and Texas.
The study looks at 35 states representing 87 percent of the workers’ compensation benefits paid in the United States: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Wisconsin.
WCRI is an independent, not-for-profit research organization based in Cambridge, Mass.
This article was first published by Insurance Journal.