Emergency Room Treatment in Workers Compensation

INTRODUCTION

The coronavirus (COVID-19) pandemic has affected the delivery of medical care. Hospitals are diverting resources to treat coronavirus patients, and elective hospital treatments have been deferred.1 But how might this affect the use of emergency rooms (ERs) by injured workers? Historically, ERs have been a common first form of treatment for workers compensation (WC) claims. In fact, one in four injured workers visits the ER for initial treatment. ER costs have risen by nearly 20%2 since 2013, and services associated with an ER visit account for more than 10% of total WC medical costs. The graph below illustrates the cumulative change, indexed to 2013, in the average paid per ER visit compared with the change in medical inflation.3

Graph 1

This article will examine the characteristics of ER visits, providing baseline information prior to the coronavirus pandemic and thoughts on what the future may hold for the WC environment.

EMERGENCY ROOM VISIT CHARACTERISTICS

Services provided for an ER visit fall into three major cost categories. An ER visit consists of:

  • Facility costs (73%), which include room charges
  • Physician costs (18%)
  • Transportation costs (8%), such as ambulance costs and mileage reimbursement

The distribution of visits across ER severity categories has remained fairly stable for some time.4 However, in recent years, facility costs have become an increasing portion of overall medical costs. For ERs specifically, the increase in facility costs has significantly outpaced medical inflation; facility costs have grown approximately three times faster than the hospital outpatient producer price index.5 Several factors may account for this, including fewer cost-containment measures (e.g., fee schedules) for facilities compared with physician services. Of the 38 jurisdictions6 in which NCCI provides ratemaking services, 34 have physician per-service fee schedules, whereas only 23 have outpatient facility per-service fee schedules.7

Transportation costs associated with ER visits are also on the rise. As noted in previous NCCI research, payments for ambulance services, whether including ground or air, account for more than 75% of total medical transportation costs, and the average payment per episode for ambulances has increased since 2013.8

Another notable ER trend relates to the ages of injured workers. The chart below demonstrates that the percentage of ER visits by injured workers under the age of 35 is greater than the percentage of those workers in the workforce.9 This is true even though workers under the age of 35 have lower accident rates than workers 35 and older.10

Graph 2

Though ER visit frequency is skewed towards younger workers, an aging workforce may put upward pressure on ER costs, because older workers tend to have more costly medical treatment. For example, the average cost to treat workers over the age of 55 is more than 25% greater than the cost to treat workers under 55.

A distinguishing characteristic of ER visits for WC is whether the visit results in a surgery. More than 10% of visits to the ER involve a same-day surgery. ER visits with surgeries cost about 2.6 times that of nonsurgical ER visits and account for more than 25% of total ER costs. Further distinguishing surgical visits, we categorize them as either requiring a minor or major surgery.

Approximately 70% of ER visits requiring surgery involve only minor surgeries. Most minor surgical procedures in the ER are for superficial injuries—i.e., injuries that do not affect muscles or organs. Examples of minor surgical procedures include sutures, incisions, and injections.

Major surgery is required for more serious injuries. In the ER, a top major surgical procedure is the amputation of one or more fingers. As shown in the following chart, the average cost of an ER visit requiring major surgery is almost $7,500—more than three times the cost of a minor surgery ER visit.

Graph 3

EMERGENCY ROOMS IN THE TIME OF COVID-19

Could we see a shift in the location of medical services due to the COVID-19 pandemic? Alternate treatment options and changes to the labor force have the potential to reduce ER visits for relatively less serious injuries. In fact, the Centers for Disease Control and Prevention (CDC)11 noted a sharp decline in the number of ER visits during the initial peak (March 29 to April 25, 2020) of the virus—observing a 42% drop in the number of ER visits relative to the prior year (March 31 to April 27, 2019).

COVID-19 has also affected the level and nature of employment. A study published in June 2020 reported that 42% of the US labor force was working from home, with another 33% not working.12 Many workers in labor-intensive industries, such as contracting and manufacturing, saw reductions in workloads.13 As workers in these industries are typically relatively more prone to injuries that require surgery or hospitalization, reductions in their workloads may result in fewer work-related injuries that require ER visits.

CONCLUSION

While costs attributable to ER visits continue to grow, the long-term duration and impact of current changes in WC ER usage remain unclear. Since the onset of COVID-19, there have been many changes in the delivery of medical services. It remains to be seen how WC will be affected going forward as both the impact of COVID and ER usage continues to evolve. NCCI will monitor and provide appropriate updates on these potential medical cost drivers.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.

1“Covid-19 Created an Elective Surgery Backlog. How Can Hospitals Get Back on Track?” Retrieved from the Harvard Business Review.
https://hbr.org/2020/08/covid-19-created-an-elective-surgery-backlog-how-can-hospitals-get-back-on-track
2Based on NCCI’s Medical Data Call, Service Years 2013–2019. Includes data from the following states: AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MO, MS, MT, NC, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, UT, VA, VT, and WV. Unless stated otherwise, statistics are for Service Year 2019 WC data.
3As measured by the Personal Health Care index (PHC). Retrieved from National Health Expenditure Data, Table 23. Data last updated 11/4/19.
https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet
4Severity of a visit is determined by the Current Procedural Terminology (CPT) codes 99281–99285. CPT Copyright 2020 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.
5Bureau of Labor Statistics, PPI Series ID WPU511104.
6Includes data from the following states: AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MO, MS, MT, NC, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, TX, UT, VA, VT, and WV.
7Includes states with per-service maximum-based fee schedules. Excludes states with charge-based fee schedules.
8“Medical Transportation Costs in Workers Compensation,” NCCI INSIGHTS, October 1, 2019.
9Bureau of Labor Statistics, Employment Projections program. Data last updated September 1, 2020.
https://www.bls.gov/news.release/pdf/ecopro.pdf
10“Changing Workforce Demographics and Workplace Injury Frequency,” NCCI INSIGHTS, April 2019.
11“Impact of the COVID-19 Pandemic on Emergency Department Visits—United States, January 1, 2019 – May 30, 2020.” Retrieved from the Centers for Disease Control and Prevention.
https://www.cdc.gov/mmwr/volumes/69/wr/mm6923e1.htm
12“Stanford research provides a snapshot of a new working-from-home economy.” Retrieved from the Stanford News.
https://news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/
13“Economic Impacts of Coronavirus on Workers Compensation,” NCCI Quarterly Economics Briefing, Quarter 1, 2020.






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