Physician Service Utilization—A Multistate Review Guide

Posted Date: October 26, 2023  

Introduction

The Annual Insights Symposium (AIS) 2023 presentation titled Under the Microscope: Medical Trends in Comp Guide described changes in the utilization of physician services over time, from 2012 to 2022. During that period, average utilization per claim over studied states increased modestly. A decrease in utilization due to less severe diagnoses and fewer major surgeries was more than offset by increased physical therapy. NCCI’s Physician Service Utilization—A Multistate Review extends the AIS research to consider variations in the utilization of physician services across states in a given year.

NCCI’s Physician Service Utilization—A Multistate Review webinar examines an analytic method to deconstruct differences in physician service utilization between states into contributions from differences in injury mix and medical treatment. The Physician Service Utilization—A Multistate Review Guide provides a slide-by-slide examination of the key insights, data sources, and background underlying the presentation.

As you review the information contained in this Guide, it may be useful to keep in mind the following main takeaways that NCCI’s Physician Service Utilization—A Multistate Review highlights:

  • Physician service utilization differs across states
  • Patterns of interstate variation have been stable over the past decade
  • Utilization variations reflect state differences in injury mix, likelihood of major surgery, and service intensity
  • Interstate variations bigger than +/–10% are mainly driven by differences in the intensity of nonsurgical medical services
  • Differences in injury mix and likelihood of major surgery are lesser drivers of utilization variation, though significant in some states

We hope you find the Physician Service Utilization—A Multistate Review Guide a beneficial and informative resource.

Utilization

Concept of Utilization

Key Insights

Two factors affect annual physician cost per claim—price and utilization. This presentation focuses on utilization.

Background

In this presentation, our focus is on utilization. To illustrate, let us consider two hypothetical claims: Claim 1 and Claim 2, both with detailed services and associated payments. Claim 1 totals $4,123, while Claim 2, just slightly higher (7% more, to be precise), is $4,411.

These payments represent a compilation of services, forming what we refer to as “utilization.” We have established a relative measure among services, similar to weighing them. This measure remains consistent, regardless of the state, date, or year in which the service is provided. Think of it as the number of pounds of produce in your shopping basket—three pounds of potatoes remain the same, regardless of where or when you buy them.

Examining the details, we observe that Claim 2 shares some services with Claim 1, but not all. For instance, surgery under Claim 1 costs about $2,000, while under Claim 2, it is cheaper at $1,760. Despite the difference in cost, it is the same surgery and requires the same extent of resources, equivalent to 1,600 units. When we tally it up, we find that Claim 2’s utilization exceeds that of Claim 1 by 18%.

While the cost difference or the paid amount stands at 7%, after factoring in the 18% utilization difference, we discern that the prices paid for Claim 1 are, on the whole, about 9% lower than those for Claim 2.

Utilization per Claim

Key Insights

  • In 2022, the utilization of physician services per claim showed significant variation among states, ranging from fewer than 1,000 to slightly over 2,500 utilization units. The nationwide average stood at 1,702 units per claim.
  • NCCI has looked to see if common features of state medical regulation correlate with or explain these variations. Examples are features such as workers compensation treatment guidelines, the use of fee schedules, network penetration, and the like. That investigation led us to understand that there was not any single feature that can explain these variations.

Background

NCCI developed a measure of units of physician service utilization. This measure relies on CMS Relative Value Units multiplied by an NCCI-calculated conversion factor. These units measure the resources required for a medical service or procedure. This chart illustrates the physician service utilization per claim in 2022 by state, based on those units of physician service utilization.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

2012-2022 Utilization per Claim

Key Insights

  • For most states, the change in utilization between 2012 and 2022 was modest
  • Interstate physician utilization variations have remained stable over the past decade—the order of state differences has remained consistent between 2012 and 2022

Background

This chart illustrates the range in physician service utilization per claim between 2012 and 2022 by state.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Years 2012-2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Deviation in State Utilization per Claim

Key Insights

There is a notable disparity in the percentage difference from the all-state average units of physician service utilization across states, ranging from just below 40% to slightly over 50% higher than the all-state average units.

Background

This chart illustrates the percent difference from the all-state average units of physician service utilization by state.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Deconstructing Utilization

Utilization Components

Key Insights

The analysis is based on dividing the factors driving utilization into two broad classes: injury mix and medical treatment. Injury mix consists of body system and diagnosis. Medical treatment consists of surgery rate and medical service intensity.

Background

Understanding the variation in physician service utilization depends on the nature of the injury or medical condition. For instance, a sprained ankle typically necessitates fewer physician services compared to a fracture. This distinction emphasizes the importance of identifying both the injured body part and the specific diagnosis, forming what we term as the “injury mix.” This mix comprises two key elements: the body system affected and the corresponding diagnosis.

Once the diagnosis is established, the focus shifts to comprehending the associated treatments. For example, a fracture may or may not require surgery. Depending on this decision, the intensity of treatment becomes a crucial factor in explaining the extent of services provided. Questions arise:

  • Is physical therapy necessary?
  • If so, how many sessions are needed?
  • How frequently should the injured worker consult an orthopedist to gauge the healing progress?

This analytical framework enables us to deconstruct utilization into these vital components, offering a comprehensive understanding of the factors that drive the observed differences in physician services.

Deconstructing Utilization per Claim

Key Insights

  • Service intensity emerges as the primary factor behind interstate variations in physician utilization for many states
  • While differences in injury mix and the likelihood of major surgery do play a role, their impact on utilization variation is comparatively smaller, although notable in specific states

Background

This chart shows that utilization variations reflect state differences in injury mix, likelihood of major surgery, and service intensity. The sum of the components (postive or negative) equals the deviation in state utilization per claim.

  • The term Body System + Diagnosis refers to the type of injury. For any given body system, certain diagnoses are inherently more severe than others. For example, fractures and ligament tears often require more medical treatment than sprains and strains.
  • The term Surgery Rate refers to the probability, or frequency, of major surgery for a given diagnosis. A reduction (or an increase) in surgery rates significantly affects medical utilization per claim.
  • The term Service Intensity refers to the collection and type of physician services rendered on average for a claim given its diagnosis and whether there was a major surgery.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Physical Therapy Utilization

Key Insights

In many states, physical therapy(PT) drives physician service intensity–especially for claims without surgery.

Background

This chart illustrates the contributions to physician service intensity differences between states, highlighting various types of physician services. The abbreviation PT represents physical medicine, while the category All Other encompasses services like office visits and imaging.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Mix of Injuries

Key Insights

While physician service intensity accounts for the majority of interstate variations in physician utilization across many states, in some states, the mix of physician services (specifically related to body systems and diagnoses) is the primary contributing factor.

Background

This chart shows the contribution to interstate variations in physician utilization from the mix of injuries (body system and diagnoses).

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Body Systems

Key Insights

  • Three major body systems—back/neck, shoulder, and leg/foot (includes leg, knee, ankle, and foot) account for nearly 60% of injuries in 2022 for the all-state category.
  • The mix in individual body systems does not have a particular correlation with the differences in utilization. Instead, they uniformly contribute, to some extent, to the percentage difference in physician service utilization.

Background

This chart shows the contribution to physician service mix from different types of body systems.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Surgery Rates

Key Insights

In most states, surgery rates contribute the least to interstate variations in physician utilization. Typically, states with higher utilization show a positive correlation with surgery rates; while states with lower utilization exhibit a negative correlation. However, there are exceptions to this general observation.

Background

The term Surgery Rate refers to the probability, or frequency, of major surgery for a given diagnosis. A reduction (or an increase) in surgery rates significantly affects medical utilization per claim. This chart shows the contribution to interstate variations in physician utilization from surgery rates.

Data

Source: NCCI’s Medical Data Call (MDC)

  • All-State is the weighted average of: 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, SC, SD, TN, UT, VA, VT, and WV
  • Physician services provided during Calendar Year 2022
  • Injuries in the most common body systems and diagnoses (see Appendix)
  • Met data quality standards such as valid units of treatments and available relative value units from the Centers for Medicare and Medicaid Services (CMS)

You can download the underlying data values for the chart by clicking here.

Appendix–Diagnosis Groups and Body Systems

Diagnosis Group Body System Examples
Nerve Injury Upper Extremity Arm Lesion of radial nerve, unspecified upper limb (G56.3)
Lesion of ulnar nerve (G56.2)
Carpal Tunnel Syndrome Hand/Wrist Carpal tunnel syndrome (G56.0)
Carpal tunnel syndrome, bilateral upper limbs (G56.03)
Hand/Wrist Fracture Hand/Wrist Displaced fracture of distal phalanx of finger (S62.63)
Fracture of hook process of hamate [unciform] bone (S62.15)
Minor Forearm Injury Arm Other superficial injuries of forearm (S50.8)
Injury of other extensor muscle, fascia and tendon at forearm level (S56.5)
Cervical Spine Degeneration Neck Spinal stenosis, occipito-atlanto-axial region (M48.01)
Spondylolysis, occipito-atlanto-axial region ( M43.01)
Elbow Forearm Fracture Arm Fracture of upper end of ulna (S52.0)
Fracture of shaft of radius (S52.3)
Lumbosacral Intervertebral Disc Disorders Lumbar Spine Intervertebral disc disorders with myelopathy, lumbar region (M51.06)
Other thoracic, thoracolumbar and lumbosacral intervertebral disc displacement (M51.2)
Low Back Pain Lumbar Spine Sacroiliitis, not elsewhere classified (M46.1)
Contusion of lower back and pelvis (S30.0)
Lumbar Radiculopathy/Sciatica Lumbar Spine Sciatica (M54.3)
Lumbosacral root disorders, not elsewhere classified (G54.4)
Ankle Fracture Ankle/Foot Fracture of lateral malleolus (S82.6)
Nondisplaced fracture of medial malleolus of unspecified tibia (S82.56)
Neck Pain Neck Dislocation and sprain of joints and ligaments at neck level (S13)
Superficial injury of other specified parts of neck (S10.8)
Cervical Disc Disorders Neck Cervical disc disorder with radiculopathy (M50.1)
Cervical disc disorder, unspecified (M50.9)
Crush Injury, Hand/Wrist Hand/Wrist Crushing injury of other and unspecified finger(s) (S67.1)
Crushing injury of left hand (S67.22)
Adhesive Capsulitis, Shoulder Shoulder Adhesive capsulitis of shoulder (M75.0)
Adhesive capsulitis of left shoulder (M75.02)
Eye Injury Minor Eye Injury of conjunctiva and corneal abrasion without foreign body (S05.0)
Injury of conjunctiva and corneal abrasion without foreign body, right eye (S05.01)
Conjunctivitis Eye Conjunctivitis (H10)
Chronic conjunctivitis (H10.4)
Head Injury Minor Head Superficial injury of head (S00)
Superficial injury of lip and oral cavity (S00.5)
Shoulder Impingement Syndrome Shoulder Impingement syndrome of shoulder (M75.4)
Impingement syndrome of right shoulder (M75.41)
Minor Thigh Injury Hip/Pelvis Pain in hip (M25.55)
Blister (nonthermal) of hip (S70.2)
Concussion/Minor Traumatic Brain Injury Head Concussion (S06.0)
Concussion with loss of consciousness of unspecified duration (S06.0X9)
Open wound of knee and lower leg Leg Open wound of lower leg (S81.8)
Laceration without foreign body, left lower leg (S81.812)
Open wound of ankle, foot and toes Ankle/Foot Open wound of toe with damage to nail (S91.2)
Laceration without foreign body of ankle (S91.01)
Synovitis/Tenosynovitis, Hand/Wrist Hand/Wrist Crepitant synovitis (acute) (chronic) of hand and wrist (M70.0 )
Radial styloid tenosynovitis (M65.4)
Traumatic Amputation, Hand/Wrist Hand/Wrist Partial traumatic transphalangeal amputation of other and unspecified finger (S68.62) Traumatic amputation of wrist, hand and fingers (S68)
Lumbar Spine Degeneration Lumbar Spine Spondylolysis, lumbosacral region (M43.07)
Congenital spondylolisthesis (Q76.2)
Minor Shoulder Injury Shoulder Contusion of shoulder (S40.01)
Contusion of left shoulder (S40.012)
Inguinal Hernia Abdomen Inguinal hernia (K40)
Bilateral inguinal hernia, with gangrene, recurrent (K40.11)
Open wound of elbow and forearm Arm Open wound of elbow and forearm (S51)
Open wound of forearm (S51.8)
Degenerative Shoulder Shoulder Loose body in shoulder (M24.01)
Post-traumatic osteoarthritis, shoulder (M19.11)
Minor Lower Leg Injury Leg Blister (nonthermal) of lower leg (S80.82)
Other specified injuries of left lower leg (S89.82)
SLAP Lesion Shoulder Superior glenoid labrum lesion (S43.43)
Minor Elbow Injury Elbow Contusion of elbow (S50.0)
Olecranon bursitis, unspecified elbow (M70.20)
Cervical Radiculopathy/Myelopathy Neck Other spondylosis with myelopathy, occipito-atlanto-axial region (M47.11)
Cervical root disorders, not elsewhere classified (G54.2)
Upper Back Pain Chest/Upper Torso Sprain of ligaments of thoracic spine (S23.3)
Sprain of ligaments of thoracic spine, initial encounter (S23.3XXA)
Knee Internal Derangement - Cruciate Ligament Tear Knee Sprain of cruciate ligament of knee (S83.5)
Sprain of posterior cruciate ligament of right knee (S83.521 )
Rotator Cuff Tear Shoulder Shoulder lesions (M75)
Other shoulder lesions (M75.8)
Lower Extremity Sprain/Strain Leg Injury of muscle(s) and tendon(s) of anterior muscle group at lower leg level (S86.2)
Other injury of muscle(s) and tendon(s) of anterior muscle group at lower leg level, left leg ( S86.292)
Head/Face Wound Head Open wound of unspecified part of head (S01.9)
Laceration without foreign body of unspecified part of head, initial encounter (S01.91XA)
Head Injury NOC Head Other and unspecified injuries of head (S09)
Unspecified injury of face and head (S09.9)
Dorsalgia Lumbar Spine Dorsalgia (M54)
Radiculopathy (M54.1)
Minor Ankle/Foot Injuries Ankle/Foot Superficial injury of ankle, foot and toes (S90)
Contusion of foot (S90.3)
Knee Internal Derangement - Meniscus Injury Knee Tear of meniscus, current injury (S83.2)
Bucket-handle tear of medial meniscus, current injury (S83.21)
Bicipital Tendinitis Shoulder Bicipital tendinitis (M75.2)
Bicipital tendinitis, unspecified shoulder (M75.20 )
Muscle/Tendon Injury, Hand/Wrist Hand/Wrist Injury of unspecified muscle, fascia and tendon at wrist and hand level (S66.9) Strain of unspecified muscle, fascia and tendon at wrist and hand level (S66.91)
Hip/Pelvis Leg Fracture of lesser trochanter of femur (S72.12)
Displaced fracture of lesser trochanter of left femur (S72.122 )
Minor Knee Injury Knee Sprain of collateral ligament of knee (S83.4)
Sprain of unspecified collateral ligament of unspecified knee (S83.409)
Minor Hand/Wrist Injuries Hand/Wrist Other and unspecified sprain of wrist (S63.5)
Sprain of carpal (joint) (S63.51)
Dislocation and sprain of joints and ligaments of thorax Chest/Upper Torso Dislocation and sprain of joints and ligaments of thorax (S23)
Subluxation and dislocation of thoracic vertebra (S23.1)
Elbow Epicondylitis Elbow Medial epicondylitis (M77.0)
Medial epicondylitis, right elbow (M77.01)
Knee Degenerative/Overuse Injuries Knee Chondromalacia patellae (M22.4)
Chondromalacia, knee (M94.26)
Heel/Midfoot Fracture Ankle/Foot Intraarticular fracture of calcaneus (S92.06)
Fracture of calcaneus (S92.0)
Foreign body on external eye Eye Foreign body on external eye (T15)
Foreign body in conjunctival sac (T15.1)
Minor Hip/Pelvis Injuries Hip/Pelvis Laceration with foreign body, unspecified hip (S71.029)
Iliac crest spur, right hip (M76.21)
Tibia Fibula Fracture Leg Unspecified fracture of shaft of unspecified tibia (S82.209)
Fracture of shaft of fibula (S82.4)
Thoracic, thoracolumbar, and lumbosacral intervertebral disc disorders Lumbar Spine Thoracic, thoracolumbar and lumbosacral intervertebral disc disorders with radiculopathy (M51.1)
Other thoracic, thoracolumbar and lumbosacral intervertebral disc disorders (M51.8)