Medical provider networks (MPNs) for workers compensation (WC) have become increasingly popular over the last two decades. In conjunction with increased market penetration, some MPNs have broadened their services: As a way to improve outcomes, they do not just provide medical care, they manage the medical services on a claim, including interacting with the patient.
In this report, we look at the impact of MPNs on workers compensation claim costs for 10 common WC injuries. We identify claims managed in-network and out-of-network and compare both medical and indemnity costs between the two groups of claims. In particular, the study looks at differences in the use of physician and hospital services.
Comparing claims managed in-network to claims managed out-of-network across states and for 10 common injuries:
- Average paid medical costs are higher in-network for the more costly back and shoulder injuries and lower for several less costly injuries
- Except for the more costly back injuries, in-network claims (as compared with out-of-network):
- Are less likely to be admitted to a hospital
- Cost less for hospital outpatient services
- Cost more for physician services
- For all 10 injuries and for both permanent partial and temporary total claims, the average total incurred cost per claim for in-network claims is lower than, or about the same as, that for out-of-network claims
- In-network claims are more likely to have permanent injury awards than out-of-network claims; selection bias may play a role here
Differences at a state level may be considered in a follow-up study performed later.
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