A new study released by Mass.-based Workers Compensation Research Institute outlines the effect of provider choice policies on workers’ compensation costs.
The study reviews the relationship between workers’ compensation costs and provider choice laws. Data on workers’ comp injuries that occurred between 2007 and 2010 from 25 states were evaluated at approximately the 36 month age.
Authored by David Neumark and Bogdan Savych, the study found very little difference in the average medical costs in states where policies allow employers to choose providers versus the states where policies allow employees to choose their medical provider.
However, different injury types such as back and neck sprains, strains, neurologic spine pain or non-specific pain could affect medical costs, the study noted. “Policies that give workers the most control over the choice of provider were associated with higher medical and indemnity costs among the small share of the most expensive back-related injuries and, more generally, higher indemnity costs for the costliest cases overall. The back-related injuries, which were relatively expensive, appear to at least partially account for higher indemnity costs, overall, in the most expensive cases in states where policies give workers the most control over the choice of provider,” the authors wrote.
The evidence was less clear for indemnity costs, according to the study. Similar to the findings related to medical costs, there was no difference in costs when employees control the choice of the provider. The only exception was, again, with back-related claims where costs were higher when the employee had control over the choice of provider.
The results, the authors explained, suggest that policymakers would do better by focusing on reducing high cost workers’ comp claims where policies allow workers to control provider choice.
To access the full study: https://www.wcrinet.org/reports/the-effects-of-provider-choice-policies-on-workers-compensation-costs
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