Florida Workers’ Comp Claims Costs Grew in Years after Reform

Medical costs for workers’ compensation claims in Florida grew between 5 and 7 percent in 2005 and 2006, according to a new study by the Workers Compensation Research Institute (WCRI).

The growth rate of followed a period of stabilization in 2004, just after the state enacted major reform legislation that included a new rate schedule with higher payments to doctors but lower payments for many hospital outpatient services, the Cambridge, Massachusetts based WCRI said.

The WCRI analyzed claims with experience as of March 2007 and found that the 5 percent growth in medical costs per claim in was mainly driven by the significant increases in the average payment per service for hospital outpatient services.

Previously in 2004, the average payment per service for most hospital outpatient services decreased at double-digit rates. The study pointed out that changes in the fee schedule rates for most hospital outpatient services in 2004 and the corresponding adjustment of the parties in the system (providers, injured workers, and payers) may be related to the decrease in 2004 and the increase in 2006.

Among the information found by the WCRI:

• Starting in 2004, fewer workers received physical medicine services provided by hospitals after the average payment per service was cut in half
• Prices paid for surgeries decreased 9 percent in 2006 after increases in the prior two years
• The prices paid for surgeries in the state were often negotiated at much higher
  levels than the fee schedule rates, which were among the lowest nationwide

Source: WCRI