Work Comp vs. Group Health—The Price We Pay

Work Comp vs. Group Health—The Price We Pay

Barry Lipton

Barry Lipton gave the eagerly awaited update on NCCI research, covering studies comparing medical costs in workers compensation and group health. Barry also covered the predictive power and accuracy of NCCI’s experience rating system, and the number of claims being reported with values of at least $10 million.

Medical Costs

Medical costs for physician services in workers compensation are higher than those in group health for treating comparable injuries. While prices paid for physician services in workers compensation overall are comparable to prices paid in group health, workers compensation sees greater utilization of physician services than group health. The relationship between workers compensation medical costs and group health medical costs varies markedly from state to state—in several states, workers compensation costs for physician services are more than double the costs for physician services in group health.

“Costs for radiology, relative to group health, have improved over the last 15 years or so,” said Lipton, “while costs for physical therapy in workers compensation remain three times the cost in group health.”

Experience Rating

NCCI is undertaking a major review of its experience rating system. The experience rating system uses an insured’s workers compensation claims from certain prior years as part of the process of predicting the insured’s future claims. The current experience rating system works quite well, but the research highlights some areas where it might be possible to improve the predictive power and accuracy of experience rating.

Claims

At Annual Issues Symposium (AIS) 2018, NCCI commented on an uptick in 2016 in the number of workers compensation claims with values of at least $10 million. At AIS 2019, Lipton said that the number of such mega claims reported in 2017 and 2018 has dropped back down to long-term average values.

Exhibit 1
Exhibit 2




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