Louisiana Workers’ Compensation System Costs Per Claim Higher Than 15-State Median
By: Health Insurance
Submitted: 2010-02-01 15:57:10 | Word Count: 585
The costs per all paid claims in Louisiana were 35 percent higher than the typical study state, on average, according to the WCRI study CompScop Benchmarks for Louisiana, 10th Edition.
The study by the Cambridge, Mass.-based Workers Compensation Research Institute (WCRI) found that injured workers in Louisiana were off the job longer than in other states with similar workers’ compensation benefit systems, resulting in higher-than-typical indemnity benefits per claim than in other study states, even though the workers’ weekly benefits were capped at lower levels in Louisiana.
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In addition, medical costs and expenses per claim were among the highest of the 15 states in the study.
WCRI said these findings combine to raise questions about whether the Louisiana system can be improved for both workers and their employers.
The study found that indemnity benefits per claim with more than seven days of lost time were 36 percent higher than the typical study state as a result of a longer duration of temporary disability.
WCRI reported that injured workers in Louisiana were off work considerably longer than workers in other wage-loss study states – 34 weeks on average. This was nine to 10 weeks longer than Massachusetts and Pennsylvania and 15 weeks longer than Michigan.
Some system stakeholders in Louisiana have suggested that the longer duration of temporary disability may partly reflect the difficulty of return to work given the poorer health status and lower educational attainment of the state’s population, the study observed. National measurements support this concern. System features likely also contributed to the longer duration, particularly the complexity and length of the dispute resolution process.
Medical costs per claim were 20 percent higher than in the typical study state, the result of higher utilization and higher nonsurgical prices paid. In addition, the duration of medical treatment was 6.5 weeks (16 percent) longer than in the median study state.
Despite little change in the medical fee schedule rates since 1994, the 2006 medical fee schedule in Louisiana was higher than the median of 42 states with fee schedules for all service groups except surgery. Payments per claim for hospital outpatient services also were higher than the median study state, WCRI said. Hospital inpatient payments per claim, however, were lower compared to other study states.
Expenses to manage claims were among the highest of the study states, including higher than average medical cost containment expenses per claim, defense attorney payments, and medical-legal expenses per claim. In particular, WCRI reported defense attorney payments per claim with more than seven days of lost time were the highest among the 15 study states, at an average of nearly $6,500 per claim with defense attorney payments greater than $500. This finding suggests that dispute resolution may be more complex or prolonged in Louisiana than in the other states in the study.
The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, health care, and disability issues. Its members include employers, insurers, governmental entities, insurance regulators and state administrative agencies in the U.S., Canada, Australia and New Zealand, as well as several state labor organizations.
