June 7, 2020

WCRI Publishes Medical Price Index

The Workers’ Compensation Research Institute (WCRI) published the 12th edition of their annual index of actual prices paid for medical professional services from 2008-2019, based on a market basket of commonly used services for treating workers with injuries. This edition covers 36 states that represent 88% of workers’ comp benefits paid in the United States.

This study focuses on professional services billed by physicians, physical and occupational therapists, and chiropractors, showing how prices paid for services compared across states, how prices changed, and whether price growth is part of a broader trend or unique to a state. WCRI also claims that this study may provide a baseline for policymakers and other stakeholders to observe any effects the COVID-19 pandemic may have on medical prices in workers’ comp across states and over time.

Overall, growth in prices paid for common professional services exhibited tremendous variation across states, ranging from a 12% decrease in growth in Illinois to a 48% increase in growth in Wisconsin. The study does make it clear that fee schedules played an instrumental role in price variation, as prices paid for a similar set of professional services for treating injured workers varied significantly across states.

States with no fee schedules for professional services paid 42-174% more for services when compared to the median of states with fee schedules; the median for overall prices in non-fee schedule states was 64% higher than the median for fee schedule states. Overall prices paid ranged from 28% below the 36-state median in Florida – a state with fee schedules – to 165% above the 36-state median in Wisconsin – a state without fee schedules.

Most states without fee schedules experienced faster growth in prices compared to states with fee schedules; three states without fee schedules – Indiana, Missouri, and Wisconsin – saw price increases range form 34-48%, while price changes in states with fee schedules ranged from a 2% decrease in South Carolina to a 25% increase in Maryland.

Seven states made significant fee schedule changes over the last several years, which have resulted in major changes to prices paid. This includes the following results:

  • Virginia fee schedule changes in 2018 resulted in a 13% decrease in overall prices paid from 2017-2018
  • North Carolina fee schedule changes in 2015 resulted in a 17% increase in overall prices from 2014-2016
  • Kentucky discontinued relative values from Medicare’s RBRVs in 2014, transitioning to state-specific relative values based on FAIR Health data; this resulted in a 19% increase in overall prices paid from 2013-2015
  • Arizona fee schedule changes in 2013 resulted in a 10% increase in overall prices paid from 2013-2014
  • Illinois fee schedule changes in 2011 resulted in a 27% decrease in overall prices paid from 2010-2012
  • Texas fee schedule changes in 2011 resulted in a 16% increase in overall prices paid from 2010-2011
  • Massachusetts fee schedule changes in 2009 resulted in a 15% increase in overall prices paid from 2008-2010

At 182 pages, this report contains a significant amount of data and insights for all states. For more information, visit WCRI online.

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