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Workers’ Comp Medical Costs Up and Down

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The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) recently released the California Workers’ Compensation Aggregate Medical Payment Trends report comparing medical payment transaction data from the fourth quarter of 2013 to the fourth quarter of 2012.

WCIRB researchers used reported medical payment data representing more than 90 percent of the California insurance market and accounting for approximately $1.3 billion in payments annually.

Among the findings of the report:

  • On a type of provider basis, specialist physicians, surgeons and services for hospital and ambulatory surgical centers services dropped from 53.6 percent of total medical paid in Q4 2012 to 49.5 percent in Q4 2013. During that same period, payments to general practitioners and occupational health providers increased from 13.1 percent to 16.2 percent of total paid medical.
  • On a place of service basis, payments to hospitals and ambulatory surgical centers dropped from 31.3 percent of total medical paid in Q4 2012 to 28.0 percent in Q4 2013. During that same period, office-based services increased from 47.5 percent of paid in Q4 2012 to 51.4 percent of paid in Q4 2013.
  • On a procedure basis, pharmacy spending increased from 12.8 percent of paid medical in Q4 2012 to 13.7 percent of paid medical in Q4 2013. Payments for opiates slightly declined from 3.8 percent of total paid medical in Q4 2012 to 3.7 percent in Q4 2013.
  • Pharmaceutical payments for 2013 and 2012 averaged approximately 13 percent of total paid medical as reflected in the WCIRB’s medical transaction data, while payments to pharmacists and pharmacies averaged about 9.7 percent for both years. These findings suggest that 3 percent to 4 percent of paid medical may be generated from physician dispensing in offices.
  • The fastest growing procedure between Q4 2012 and Q4 2013 was Level 4 office visits for existing patients, which is defined by the Official Medical Fee Schedule (OMFS) as involving a detailed history and examination for moderately complex medical decision-making. This code also grew the fastest between Q3 2013 and Q4 2013.

The report is available in the Research and Analysis section of the WCIRB website www.wcirb.com/research-and-analysis/reports .

To see the entire 12 page report, visit www.wcirb.com/sites/default/files/documents/ca_wc_medical_agg_payment_trends_report.pdf

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) is a California unincorporated, private, nonprofit association comprised of all companies licensed to transact workers’ compensation insurance in California, and has over 400 member companies and 200 employees. No state money is used to fund its operations. The operations of the WCIRB are funded primarily by membership fees and assessments. Click the link below to see the list of member companies.

To accurately measure the cost of providing workers’ compensation benefits, the WCIRB performs a number of functions, including collection of premium and loss data on every workers’ compensation insurance policy, examination of policy documents, inspections of insured businesses, and test audits of insurer payroll audits and claims classification.

It also is the lead group in providing suggested workers’ comp rates and changes to policy. The final decision on rates is the domain of the State Insurance Commissioner Dave Jones.