Texas Sees Rise in Workers’ Comp Medical Cost per Claim

Medical costs per claim in Texas rose 8 percent in 2008, after a period of declining costs following reforms enacted in 2001 and 2005, and increased payor focus on managing medical care, according to a study by the Workers Compensation Research Institute (WCRI).

The 16-state study by the Cambridge, Mass.-based WCRI, Monitoring the Impact of Reforms in Texas: CompScope Benchmarks, 11th Edition, found that the rise in average workers’ compensation medical costs per claim in Texas was likely related in part to an increase in the fee schedule for nonhospital providers.

The study reported that medical costs per claim fell 18 percent from 2002 to 2006, largely due to fee schedule decreases under House Bill 2600, enacted in 2001, combined with an increased management of medical care by payors through utilization review and other means.

The increase in medical fee schedule conversion factors in 2008 reflects the rise in practice expenses since 2002. Also, the separate conversion factor established for surgery resulted in large increases in reimbursement levels.

At an average of $2,627, medical cost containment expenses per claim in Texas were among the highest of the study states for 2008 claims evaluated in 2009 — 40 percent higher than typical. The combined increase in medical costs and in cost containment expenses per claim brought medical-related costs per claim in 2008 back to 2003 levels.

Indemnity benefits per claim also rose by 6 percent in 2008/2009 due mainly to growth in wages.

Topics Trends Texas Workers' Compensation