NC holds its place in state ranking

Workers' compensation premium rates in North Carolina are in line with those in southeastern states, but the state has slipped in rankings since 2006, when it had among the lowest rates in the country.

According to the widely reported 2014 Oregon Workers' Compensation Premium Rate Ranking Summary, 25 jurisdictions out of 51 in the country had higher workers' compensation premium rates than North Carolina as of January 2014. In 2006, 35 jurisdictions had higher rates.

As of January 2014, Louisiana and South Carolina have the highest premium rates in the southeast at $2.23 and $2.00 per $100 of payroll. Rates in North Carolina and other states in the region are between $1.50 -$1.99.

Oregon's Department of Consumer and Business Services conducts the study every two years. The department says its study is based on measures that put states' workers' compensation rates on a comparable basis, using a constant set of risk classifications for each state. The study used classification codes from the National Council on Compensation Insurance.

The 2014 median value is $1.85, which is a drop of 2 percent from the $1.88 median of the 2012 study. National premium rate indices range from a low of $0.88 in North Dakota to a high of $3.48 in California. Other states with the highest rates are, respectively, Connecticut, New Jersey, New York, and Alaska. At the other end, Indiana, Arkansas, Virginia, and Massachusetts boast the lowest rates in the country.

Officials in states which rank poorly are among those who say the biennial study doesn't really say much about a state's workers' compensation system. For instance, states with more generous benefits for injured workers would likely not do well in the study. Mike Manley, research coordinator at the Oregon agency, agrees the study doesn't express the cost-effectiveness of a system.

California had a stiffer reaction. "There is nothing in the Oregon study to compare the differential coverage and benefits and medical-legal appeals system that each state offers," Christine Baker, director of the California Department of Industrial Relations, told the publication. "At the extreme, a state could drastically reduce its scope and level of benefits in order to reduce costs and do "better' in the Oregon comparison," she added.

Oregon officials also caution against making too much of the study. For one, the latest rankings show 21 states within 10% of the median, and the range from highest and lowest rankings has been shrinking. Some states may have enacted reforms that have yet to show results. "We're always trying to tell other states ... that we're describing you, we're not evaluating you.

We're not saying you're doing well (or) you're doing poorly. It's a description of one aspect of your system," Mr. Manley noted to Business Insurance.

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2015 Program

2015 Program (PDF)

Update on Medicare Set-Asides

The National Council on Compensation Insurance recently reviewed a sample of proposed workers' compensation settlements who's MSAs have been reviewed by the Centers for Medicare & Medicaid Services. Among the key findings:

  1. After a period of dramatic lengthening, CMS's processing time for MSAs has recently declined.
  2. The ratio of CMS-approved MSA amounts to submitted MSA amounts has declined over time.
  3. The differences between proposed and approved MSA settlements have been largely due to prescription drug costs.
  4. Most MSAs are for claimants who are Medicare-eligible at the time of settlement Most of these claimants are Medicareeligible because they have been on Social Security Disability for at least two years.
  5. MSAs make up about 40% of total proposed settlements. Of this 40%, prescription drugs make up half.

NCCI notes although the processing time has changed considerably over the period considered, there is no apparent trend in approved MSA amounts, and almost half of MSAs are less than $25K.

CMS recently issued guidance affecting Medicare Set-Aside proposals submitted on or after January 1, 2015. The guidance has to do with the U.S. Drug Enforcement Administration's rescheduling of hydrocodone combination products from C-III controlled substances to C-II controlled substances.

Normally, C-III controlled substances require a new prescription after five refills or after six months, whichever occurs first. C-IIs require new prescriptions at intervals no greater than 30 days; however, a practitioner may issue up to three consecutive prescriptions in one visit authorizing the patient to receive a total of up to a 90-day supply of a C-II drug.

CMS says new set-aside proposals should allow for a minimum of four healthcare provider visits per year when schedule II controlled substances (including hydrocodone combination products) are used continuously, unless the visits are more frequent per medical documentation.