Report: Workers' comp medical costs soar - Business First of Louisville:

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The research also found that thoswe costs would have been billionsz more without system reforms earlie rthis decade. The Californi a Workers’ Compensation Institute, a research organization made up of insurereand self-insured employers, recently released the study on post-reform changes in comp medical payments in the Golden State. The studyy is the fourth in a five-part series updatinb data on claim outcomes following systemn reforms between 2002and 2004.
All the data in the repory reflect when injuries occurred known as the accident year instead of when an accident was Since 2005, insurance companies’ payments have increased significantlg for treatment, medications/durable medical equipment, medical-legaol reports and medical management, the institutwe said. Between 2005 and average medical payments for all claimsd oneyear post-injury rose 23 percent, to $2,582 from $2,100, the study found. Meanwhile, “average medicapl payments on more expensive indemnity claims climbed 28percentt (from $4,443 to $5,665),” the reportt said.
Even though medical costss are rising, the reforms are estimated to have saveds cumulativelybetween $12.8 billion and $25.3 billion in medical costs between 2004 and 2008. Some of the medicalk management tools put in place by the reformxs were medical treatment utilization mandatoryutilization review, bill review and medicall provider networks. The institute estimates that withoutrthe reforms, workers’ comp medical inflation would have continuedd at somewhere between 8.2 percent a year — which is half the pre-refornm annual inflation rate — and 16.4 percent, which is the averager annual inflation rate between 1999 and 2002.