The National Council on Compensation Insurance (NCCI) released their Medical Inflation Insights report, which provides a quarterly overview of the latest insights and analysis into what is driving changes in prices and how these changes may or may not impact workers comp.

The report utilizes the Workers Compensation Weighted Medical Price Index (WCWMI) which is a composition of medical cost components from the Producer Price Index and the Consumer Price Index, reweighted using NCCI’s Medical Call data to better match the mix of spend in workers compensation.

The January edition of the inflation report highlights key trends that may shape costs in 2025. Prices for all items increased by 2.9% from the previous year, while core prices rose by 3.2%. NCCI predicts that inflation will remain an uncertainty as fiscal policy changes may complicate the Fed’s efforts to continue bringing inflation down.

A notable finding is the rising cost of physician services, the largest category of medical spending in workers’ comp. In 2024, physician service prices grew at a rate exceeding long-term averages, driven by increases in non-Medicare prices. This trend could have implications for both fee schedule and non-fee schedule states in the coming year.