Florida's Workers' Compensation Prices for Non-Hospital Services are Among the Lowest, Hospital Prices Among the Highest of States Studied, Says WCRI.

Business Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 4, 2002

Despite having the lowest fee schedule of 40 states, Florida's medical payments per claim are near the average of eight large states.

While prices for many non-hospital services are the lowest among the eight study states, Florida's hospitals receive the highest prices among these states for similar services, according to a study by the Workers Compensation Research Institute (WCRI).

The reference work, The Anatomy of Workers' Compensation Medical Costs and Utilization: Trends and Interstate Comparisons, 1996-1999, identifies where workers' compensation medical dollars go and how costs and utilization differ across eight important states, representing 40 percent of the nation's workers' compensation benefits.

In addition to Florida, the states in the study include California, Connecticut, Georgia, Massachusetts, Pennsylvania, Texas and Wisconsin.

The study found that in Florida:

-- The average price of medical services is close to the average of the states
studied, even though the state's fee schedule sets very low maximum fees.

-- The "average price" masks the large differences in hospital and non-hospital
prices for similar services.

-- Hospitals providing physical therapy services receive payments per service
that are five times higher than those received by physical therapists in
non-hospital settings.

"This reference work is designed to improve the decision making process of public officials and business people seeking to target cost drivers and benchmark system performance in Florida and other states," said Dr. Richard Victor, executive director of the Cambridge-based, independent, not-for-profit research organization.

The study reported that the average medical payment per claim in Florida increased at an average annual rate of 5.4 percent per year between 1996 and 1998 with experience through mid-year 1999. The increase results from a rise in the number of services delivered per claim rather than prices paid.

The increase in services per claim is a function of an increase in both the number of visits per claim as well as the number of services per visit.

Overall, prices in Florida are slightly above the eight-state average. This is surprising, the study observed, because Florida's fee schedule sets maximum fees at levels that are among the lowest of the 40 states that regulate workers' compensation medical reimbursements using a fee schedule.

The higher than expected prices overall is largely a function of higher hospital prices. This results largely from higher hospital prices for ancillary services. Hospital prices for room and board are closer to the average of the states studied.

For example, hospitals providing physical therapy services in Florida receive payments per service that are, on average, five times higher than payments for physical therapy billed by non-hospital providers.

The study reported that chiropractors in Florida receive 61 percent smaller payments per claim than chiropractors in the median of the eight states for treating similar injuries. Florida chiropractors are involved in 44 percent fewer claims than the eight-state median. When involved, chiropractors provide far fewer visits - 48 percent fewer than is typical - at lower payments - 28 percent lower than the median.

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, insurance regulators and state regulatory agencies, as well as several state labor organizations.

For more information or to purchase the study The Anatomy of Workers' Compensation Medical Costs and Utilization: Trends and Interstate Comparisons, 1996-1999 ($95 - WCRI members, government agencies, non-profit organizations; $495 for all others) contact Jill Lawson at [e-mail] or call 617-661-9274.