Workers’ compensation insurance provides money for medical care for employees injured in the course of their work. In return for guaranteed benefits, the employee agrees not to sue the employer for injuries caused by employer negligence.
Most workers’ comp programs also provide compensation to employees for lost wages and death benefits for the families of employees killed in work-related accidents. 49 states require almost all employers to carry this insurance; the specific programs differ from state to state.
Workplace safety has improved dramatically over the past few decades, yet the costs of workers’ compensation insurance have risen. One cost-containing effort has involved implementation of fee schedules placing a ceiling on provider reimbursement. Fee schedule proponents argue reasonably limiting payments to providers is effective and necessary in reducing the cost of workers’ compensation insurance.
A 2008 study by the National Council on Compensation Insurance (NCCI) found that although several states’ fee schedules could stand improvement, the measures have proven effective in controlling workers’ compensation medical costs, and states without fee schedules have higher costs.
In 2009, the Wisconsin Insurance Alliance conducted a medical data call examining that state’s Wisconsin Compensation Rating Bureau and the Wisconsin Insurance workers’ compensation system with the goal of indentifying the main medical cost components while identifying possible methods for managing and lowering these costs.
The data call found that Wisconsin workers’ compensation medical providers are paid at levels far beyond paid to providers in neighboring states. The report concluded that the implementation of a medical fee schedule could both address the high cost per claim for workers’ compensation coverage while lowering administrative costs and the number of disputed cases.
The following articles examine various efforts by states to manage workers’ compensation costs through fee schedules.
Wisconsin Insurance Alliance Workers’ Compensation Medical Data Call
http://heartland.org/policy-documents/wisconsin-insurance-alliance-workers-compensation-medical-data-call
In this study, the Wisconsin Insurance Alliance and the Wisconsin Compensation Rating Bureau conduct a medical data call which analyzes key medical cost components of the Wisconsin workers’ compensation system and recommends medical fee scheduling as a solution to manage costs.
Effectiveness of Workers Compensation Fee Schedules—A Closer Look
http://heartland.org/policy-documents/effectiveness-wc-fee-schedules-closer-look
This study from the NCCI examines workers compensation medical fee schedules. The study (and accompanying research brief) uses the experience of group health coverage to assess the effectiveness of workers’ comp fee schedules.
Making Workers Compensation Medical Fee Schedules More Effective
http://heartland.org/policy-documents/making-workers-compensation-medical-fee-schedules-more-effective
In a December 2007 NCCI Research Brief, John Robertson and Dan Corro consider state workers’ comp fee schedule designs and the relationship between reimbursements and those for employer-sponsored group health in the state.
Study Finds Fee Schedules Key to Controlling Costs, but Can Be Improved
http://www.riskandinsurance.com/story.jsp?storyId=148817824&query=fee%20schedules
This Risk and Insurance article discusses a new study from the NCCI, which found that although fee schedules are largely successful, there remains substantial room for improvement.
The Impact on Physician Reimbursement of Changes to Workers Compensation Medical Fee Schedules
http://heartland.org/policy-documents/impact-physician-reimbursement-changes-workers-compensation-medical-fee-schedule
John Robertson and Dan Corro of the National Council on Compensation Insurance consider some examples of how workers’ comp medical payments responded to state fee schedule changes for particular services.
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance.
