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WCRI Found Significant Differences in State Workers’ Compensation Medical Fee Schedule Levels When Compared to State Medicare Rates

CAMBRIDGE, Mass.--(BUSINESS WIRE)--There are significant differences among the workers' compensation medical fee schedule levels in the 43 states which use them, compared to the Medicare fee schedule levels across the states, according to a new study from the Cambridge-based Workers Compensation Research Institute (WCRI).

The study, Benchmarks for Designing Workers' Compensation Medical Fee Schedules: 2009, provides policymakers important benchmarks for the design of fee schedules in workers' compensation systems by analyzing the relative levels of state workers' compensation medical fee schedules.

The construction of a workers' compensation medical fee schedule requires a delicate balance. If rates are set too high, the fee schedule may not meet its cost containment goal. If rates are too low, access to quality care for injured workers may be jeopardized.

Each state's Medicare fee schedule was used as a benchmark, recognizing that the optimum level of fee schedule rates was likely not the same as Medicare, said the study. Using the Medicare fee schedule allowed evaluation of the relationship between fee schedule rates and the provider expenses of delivering care.

The study reported that the premium over Medicare varied widely from eight percent above Medicare in Massachusetts to 215 percent above Medicare in Alaska.

WCRI found that nine states set rates that resulted in the premium over Medicare being relatively the same for each of the service groups, which may neutralize incentives for over-utilization of invasive and specialty care.

The study also found higher workers' compensation rates were not necessarily correlated with higher Medicare rates.

Among other findings:

  • Three states-California, Florida and Massachusetts-set workers' compensation fee schedule rates within 20 percent of Medicare rates in those states at the state level.
  • Just over one-half of the states set workers' compensation fee schedule rates between 50 and 100 percent above the Medicare rate at the state level.
  • Six states-Alaska, Delaware, Idaho, Illinois, Nebraska and Oregon-set their workers' compensation fee schedule rates at levels more than double Medicare at the state level.
The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers' compensation, healthcare and disability issues. Its members include employers, insurers, 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, go to the WCRI web site: www.wcrinet.org.

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