Hospital Outpatient Costs Key Driver of Injured Worker Medical Costs in Louisiana

April 22, 2014

Payments per claim for the medical care of injured workers in Louisiana were higher and growing faster than in most states, according to a 16-state study by the Cambridge-based Workers Compensation Research Institute (WCRI).

The WCRI study, CompScope Medical Benchmarks for Louisiana 14th Edition, found medical payments per claim grew more than 7 percent per year from 2006 to 2011, which was a faster growth rate than most states in the study.

Chart: WCRI
Chart: WCRI

A major contributor to the higher average medical payment per claim was much higher hospital outpatient payments per claim in Louisiana; this also contributed to the rapid growth rate. According to the study, these results reflect the state’s reimbursement approach. The fee schedule sets reimbursement for hospital outpatient services at 90 percent of billed charges. However, the workers’ compensation statute calls for reimbursement based on the mean of usual and customary charges. The result of these conflicting provisions is considerable litigation.

“The study can help policymakers and system stakeholders identify current cost drivers and emerging trends in payments, prices, and utilization of medical services among nonhospital and hospital providers,” said Ramona Tanabe, WCRI’s deputy director and counsel. “Recent policy debates around ways to manage medical care and costs have considered revisions to the hospital reimbursement approach.”

The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers’ compensation systems. Paste the link in a browser to purchase a copy of this study:

Source: WCRI

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