If a worker in New Hampshire gets hurt on the job, an anesthetic injection can cost $763 under a workers’ compensation claim, compared to $298 for non-work related injuries. Surgical treatment for tendinitis in the shoulder costs about $2,200 if the injury happened at work, compared to $768 for other claims, according to data from the New Hampshire Insurance Department.
There is near universal agreement from politicians, doctors and businesses that New Hampshire’s workers’ compensation prices are too high. From the construction industry to ski resorts, business owners say the high costs make them think twice about expanding. But efforts to fix prices through a fee schedule or control prescription drug costs have made little progress since 2006, and lawmakers are seeking to tackle the issue once and for all this session.
“It is undeniably clear that New Hampshire workers’ compensation medical costs are out of line with those in the region and nation, and that those excessive costs are affecting businesses in the Granite State,” Insurance Commissioner Roger Sevigny wrote in the final report of a commission created by Gov. Maggie Hassan last fall to study workers’ compensation costs. “We cannot afford to do nothing.”
New Hampshire has the 12th highest premium costs nationally, according to the Oregon Workers’ Compensation Premium Rate Ranking. The average medical cost per claim in New Hampshire is $34,000, higher than most of New England, according to the National Council on Compensation Insurance.
The majority of Hassan’s commission said New Hampshire lacks enough clear data to understand why its costs are so high and how they really compare nationally. The NCCI, for example, doesn’t include data for self-insured groups, which make up a significant portion of coverage. Ten of 15 commission members recommended creating a better data system and the commission unanimously recommended adopting a pharmacy benefit management program to bring down prescription drug costs.
But a coalition of 22 business groups, led by the self-insuring New Hampshire Automobile Dealers Association, wants the state to adopt a medical fee schedule, which caps how much doctors can charge to care for on-the-job injuries. Forty-four other states have such a schedule, and data from the NCCI shows fee schedules have been effective at controlling costs.
Doctors, hospitals and workers say setting fixed prices could diminish care. They say handling workers’ compensation claims takes more time and resources, including employees dedicated just to that task. With a cap on prices, some doctors might stop seeing workers’ compensation patients altogether. Most insurers have contracts with doctors that allow for some negotiation, but state law says insurers must pay for 100 percent of all costs, no matter how high they are.
“People are going to pick sides, and they’ll either pick the doctors or they’ll pick – for lack of a better term – the auto dealers’ side,” said Senate Majority Leader Jeb Bradley. “I think senators are looking for a compromise.”
Employers reported nearly 39,000 work injuries to the Department of Labor in 2013, and roughly 3,500 of those who got hurt missed at least four days of work. All employers are required to provide workers’ compensation. In New Hampshire, medical costs make up 70 percent of average workers’ compensation expenses. Out-of-work expenses including a reduced salary make up the balance.
A fee schedule is the direction Republican lawmakers in the House and Senate are moving toward. One proposal on the table would set a fee schedule that caps charges at 150 percent of the Medicare reimbursement rate. Thirteen senators, including Democrats and Republicans, back the bill.
Gary Woods, former chairman of a workers’ compensation advisory committee and an orthopedic surgeon, doesn’t oppose a fee schedule but said better data is needed to make it fair.
“If we’re going to do it, let’s do it right,” he said.
Bradley proposes giving providers two years to trim costs by 15 percent or the state will impose a fee schedule. Doctors and businesses haven’t flat-out rejected this approach, Bradley said, but it will take work to figure out the right benchmarks for measuring the cost reductions.
“I have said to everybody you probably won’t like me very much when this is done,” Bradley said. “But I’m trying to bring you something that’s reasonable.”