By Christopher D. Vanderbeek
The Workers’ Compensation Research Institute recently released the results of a study documenting the costs of medical professional services in workers’ compensation cases.
The study, entitled Medical Price Index for Workers’ Compensation (MPI-WC), defined medical professional services as “nonhospital, nonfacility” services provided by physicians, physical therapists, and chiropractors. It measured the difference between medical professional service costs in states that do not have medical fee schedules versus states that do have medical fee schedules. More specifically, the study compared the increase in medical professional services between 2002 and 2011 in states without fees schedules versus states with fee schedules.
A medical fee schedule is essentially a listing, rendered by a state government, of the amounts medical providers are allowed to charge for given services. The allowable amounts are based on the codes for given services. For example, in New York, the code for a level one ambulatory surgery is “PAS 1” – each provider licensed to administer ambulatory surgeries has an allowable fee for a level one surgery.
MPI-WC focused exclusively on prices paid for medical care received by injured workers under state workers’ compensation systems. The study accounted for 25 states, in which almost 80 percent of workers’ compensation benefits are paid in the U.S. Missouri is one of six states included in the study that does not have fee schedules.
According to the study, prices paid for medical professional services in 2011 in the six states without fee schedules, including Missouri, were 27 to 51 percent higher than in states with fee schedules. Further, the study found that medical professional services costs rose by an average of 32 to 38 percent in states without fee schedule, as compared to a median increase of 14 percent in states with fee schedules.
What does this mean for Missouri businesses?
The results of the study show conclusively that medical fee schedules help control the costs of medical professional services related to workers’ compensation claims. The less workers’ compensation insurance carriers pay for medical costs, the lower the insurance premiums paid by employers. Therefore, it is in the interest of Missouri employers that a medical fee schedule be instituted in Missouri.
The lower workers’ compensation medical costs are for insurers in Missouri, the better it is for Missouri employers.
Posted by Attorney Christopher D. Vanderbeek. Vanderbeek is involved in the evaluation and defense of workers’ compensation and other insurance claims, protecting the interests of employers and insurers.
05/24/12 8:21 AM
Filed under Business Law, Manufacturing and Distribution, Workers' Compensation | Comments Off