Medical Payments Per Claim for Workers` Compensation in Michigan Among Lowest of States in New WCRI Study

CAMBRIDGE, Mass.--(Business Wire)--
Medical payments per workers` compensation claim in Michigan were among the
lowest of 14 states, largely the result of lower utilization and lower prices
paid for some services, according to a new study from the Workers Compensation
Research Institute (WCRI).

The study, CompScopeTM Medical Benchmarks for Michigan, 9th Edition, reported
that medical costs per claim in Michigan increased 6 percent in 2006 for claims
at an average 12 months of experience-similar to the increase for the median
study state, but at a slower pace compared to the previous five years.

The Cambridge, Mass.-based WCRI observed that medical payments per claim in
Michigan were 23 percent lower than the 14-state median. The lower-than-typical
medical cost per claim raises the question of what that means for injured
workers, such as whether they had problems accessing the care they desired and
how satisfied they were with the care they received.

Comparing Outcomes for Injured Workers in Michigan, a new WCRI study, examined
these and other questions and found that Michigan injured workers reported
outcomes in the middle of the range on nearly all measures, compared with worker
responses in ten other states. For example, Michigan workers had fewer problems
accessing desired medical care. Their satisfaction with the overall medical care
and the rate and speed of return to work were in the middle.

The study found that Michigan had a combination of lower prices paid and lower
utilization for some services. Payments per claim were lower for physicians and
for hospital inpatient episodes compared to the typical study state, but were
closer to typical for providers of physical medicine services (chiropractors and
physical/occupational therapists) and for hospital outpatient services.

For example, payments per claim to physicians were 21 percent lower in Michigan
than in the typical study state. The main reason was that the services provided
by Michigan physicians were less resource intensive, that is, physicians billed
less often for the most complex new and established patient office visits.

But neither the utilization nor the prices paid were consistently lower across
all service types, according to the study.

For example, prices paid to nonhospital providers were lower than typical for
surgery and radiology, but were slightly higher than what was paid in the median
state for evaluation and management and physical medicine services. These
differences are aligned with Michigan`s fee schedule, observed WCRI.

Utilization (number of visits and services per visit) was somewhat lower than
typical in Michigan for evaluation and management, major radiology (MRIs and CT
scans), and surgery, but higher than typical only for physical medicine
services.

In addition, fewer claims in Michigan involved some specialty services, such as
major radiology, physical medicine, and supplies and equipment, although the
surgery rate was typical.

The share of claims with chiropractic care was lower in Michigan than typical
and decreasing over the study period-raising possible questions about worker
access to such care.

The study also found that average payment per hospital inpatient episode was
among the lowest of the study states, although the share of claims with
inpatient care was like the median study state. Hospital outpatient payments per
service were consistently lower than in the median state across all service
categories, while fewer services per claim were provided for clinic evaluation
and management and relatively more services for outpatient laboratory and
physical medicine.

A key reason for the recent growth in medical payments per claim in Michigan was
the higher payments per claim to hospital providers; payments to nonhospital
providers were generally stable.

According to the study, overall payments for hospital outpatient services
increased an average of nearly 9 percent per year from 2004 to 2006, and grew
for all important outpatient services. By contrast, prices paid for nonhospital
services were mostly stable in 2006 (consistent with no fee schedule changes).

Overall nonhospital utilization changed little from 2005 to 2006, but decreases
were observed for some services-3 percent for physical medicine and 4 to 5
percent for radiology.

The Workers Compensation Research Institute is a nonpartisan, not-for-profit
membership organization conducting public policy research on workers`
compensation, health care and disability issues. Its members include employers,
insurers, and governmental entities, insurance regulators and state
administrative agencies, as well as several state labor organizations.

To order this report, go to the WCRI web site: www.wcrinet.org.

Workers Compensation Research Institute
Richard A. Victor, 617-661-9274

Copyright Business Wire 2009