Workers' compensation costs per claim with more than seven days of lost time for medical care of injured workers in Massachusetts had a moderate increase in 2007 after years of rapid growth. The forthcoming CompScope™ Medical Benchmarks study will analyze the components underlying the growth in medical cost per claim.
Indemnity costs per claim with more than seven days of lost time were stable in 2007 due to the offsetting effects of stable duration of temporary disability and moderate growth in the average weekly wage.
In addition, medical cost containment expenses per claim grew rapidly in 2007 after stabilization in 2006.
According to WCRI, medical costs per claim with more than seven days lost time at an average 36 months of experience in Massachusetts were the lowest of the 15 study states.
A previous WCRI study showed that a key driver for the lowest medical costs per claim in Massachusetts was lower prices paid for nonsurgical services, due to the lowest nonhospital provider fee schedule of 42 study states. However, surgery prices were often negotiated higher than the fee schedule rates in place at the time of the study. Effective April 1, 2009, the workers' compensation fee schedule in Massachusetts was increased for most common workers' compensation surgical procedures to reflect the average rates that were currently being paid.
Indemnity benefits per claim with more than seven days of lost time at an average of 36 months maturity in Massachusetts were typical of the 15 study states. According to WCRI, this was due to the offsetting effects of a slightly lower weekly temporary disability benefit rate (60 percent of workers' gross pre-injury wage compared to the typical 662/3 percent in most other states)and higher temporary disability duration due to the wage-loss benefit structure.
Benefit delivery expenses per claim with more than seven days of lost time and expenses in Massachusetts were 24 percent lower than the 15-state median. Most expenses components in Massachusetts were lower than typical, WCRI reported. Medical cost containment expenses per claim were 34 percent below the median state. Furthermore, both the average defense attorney payment per claim and medical-legal expenses per claim were 25 percent lower than the median state.
These were among the findings of a study by the Workers Compensation Research Institute (WCRI). The WCRI study, CompScope™ Benchmarks for Massachusetts, 10th Edition, provides a meaningful comparison of the workers' compensation systems in Massachusetts and 14 other important states on key performance measures such as benefit payments and costs per claim, timeliness of payments, and defense attorney involvement, by analyzing a similar group of claims and adjusting for interstate differences in injury mix, wage levels, and industry type.
WCRI also found that injured workers received their first indemnity payments faster in Massachusetts than in other study states, driven by the fastest speed of payment once the payor received notice of an injury.
The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers' compensation, health care, and disability issues. Its members include employers, insurers, governmental entities, insurance regulators and state administrative agencies in the U.S., Canada, Australia and New Zealand, as well as several state labor organizations.
To order this report, visit the WCRI website: www.wcrinet.org.
Contacts:
Workers Compensation Research Institute
Richard A. Victor,
617-661-9274