WCRI analysis

NC Fares well on Medical Payments for Comp

Between 2016-2021, medical payments per claim in North Carolina changed less than one percent per year for claims with more than seven days of lost time at 12, 24, 36, and 48 months of experience, according to a recently updated analysis from the Workers Compensation Research Institute.

For 2021 claims at 12 months of experience, the average medical payment per claim in North Carolina was 27% lower than the median in the 17 states included in WCRI’s analysis. For 2019 claims at 36 months of experience, medical payments were 32% lower in North Carolina.

The 17 states in the study – Arkansas, California, Florida, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin – represent about 60 percent of the nation’s workers’ compensation benefit payments. The analysis titled CompScope™ Medical Benchmarks for North Carolina, 24th Edition is available for purchase at https://www.wcrinet.org/reports/compscope-medical-benchmarks-for-north-carolina-24th-edition.

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Looking narrowly at hospital outpatient payments, WCRI found a marked favorable impact from medical fee schedules implemented in North Carolina in 2013, and on a staggering basis starting in April 2015. Payments decreased 25% between 2014/2015 and 2015/2016, and 9% between 2016/2017 and 5% in 2017/2018. In most states included in WCRI’s analysis, hospital outpatient payments were growing or stable and not decreasing as in North Carolina.

As a result of these large drops, hospital outpatient payments per claim in North Carolina were lower than in other states. Prior to 2013, hospital outpatient payments per claim were higher in North Carolina than in the other states included in the analysis. The fee schedules also led to a drop in payments per claim to Ambulatory Surgery Care facilities – ASC facility payments per claim were 34% lower than typical in North Carolina.

Among other findings, WCRI reports that between 2016-2021 the proportion of surgical and nonsurgical inpatient cases remained stable in North Carolina, while the overall surgery rate decreased 2-4 points, depending on claim maturity. Since 2019, the overall surgery rate has decreased in most states for claims at 12 months of experience. Also, the average prescription payment per claim for 2020/2022 claims with more than seven days of lost time was 22% higher in North Carolina than the median for the other states in the study. WCRI attributes that to a higher number of prescriptions per claim in North Carolina and slightly higher payments per prescription.

Separately, in looking broadly at country wide medical costs for workers’ compensation, the National Council on Compensation Insurance reports that between 2012 and 2021, medical costs increased at 2% per year. The Southeastern and Midwestern regions grew the fastest at 2.3% and 2.0%, respectively. NCCI’s most recent medical data show drug costs are declining, physician costs are up slightly, and facility costs are rising.