North Carolina’s workers’ compensation system had the highest indemnity benefits per claim of 17 states in a recent Workers Compensation Research Institute (WCRI) study, which serves as a baseline to observe the effects of the state’s 2011 workers’ comp reforms.
The “Baseline for Monitoring Effects of Recent Legislation in North Carolina: CompScope Benchmarks” study found the temporary disability duration was longer in North Carolina than the typical state studied, and lump-sum settlements were larger than many states, both of which drove indemnity benefits higher.
In North Carolina and all study states, settlements (including payments for future medical and future indemnity) are included in indemnity benefits.
North Carolina’s 2011 reforms capped the duration of temporary disability, refined the definition of suitable post-injury employment, and improved worker access to vocational rehabilitation for injuries occurring on or after June 24, 2011.
WCRI’s study used data reflecting claims up to 27 months after that, which is too soon to observe much impact from the legislation given the time it takes to settle workers’ compensation claims. WCRI recommends using its study as a baseline against which changes in metrics of workers’ compensation benefit system performance can be tracked.
Both medical and indemnity costs per claim changed little since 2009 after growing 8 percent annually between 2003 and 2009. The stability in medical costs is attributed to a decrease or little change in utilization of medical care, stable non-hospital prices paid (through 2012), and little change in hospital payments for inpatient care. Offsetting changes helped to produce the little change in indemnity benefits per claim. Injured worker wages increased slightly, offset by a decrease in duration of temporary disability.
The study also reported the state’s hospital costs were among the highest of the study states and the focus of fee schedule changes in 2009 and 2013.
The average total cost per claim after 36 months of experience was 33 percent higher than the typical state WCRI studied. Indemnity costs were 62 percent higher, and medical costs were typical.
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