Workers’ Comp Medical Costs Per Claim Rose 5%-12% Across Most States in Study

Medical costs per claim have begun to rise following a period of relative stability post-pandemic, a new report shows.

A Workers Compensation Research Institute report out this week shows medical payments per claim recently started increasing, fueled by an increase in medical utilization, medical prices, and updates to state fee schedules.

The WCRI report examined medical payments, prices, and utilization by provider and by type of service across 18 states.

After several years of stable medical payments since 2018, California saw a 5% increase in medical payments per claim, with increases in payments per claim for several nonhospital services, including physical medicine services, contributing to that growth, according to the report.

Medical payments per claim grew 7% per year between 2021 and 2023 in Delaware, driven by price increases in professional and hospital outpatient services. In Pennsylvania, medical payments per claim for care provided to injured workers rose 14% in 2023 after years of decreases, reflecting, in part, larger recent annual updates to the state’s medical fee schedule, which is tied to the statewide average weekly wage.

Medical payments per claim grew 6% per year in Wisconsin from 2021 to 2023 after years of small changes. The state, which has had some of the highest medical payments per claim among the study states, recently passed legislation introducing a medical fee schedule for hospital services, according to the WCRI report.

The report reflects the experience of non-COVID-19 claims through March 2024. The 18 states in the study represent roughly 60% of all workers’ comp benefit payments nationwide.