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Monday, January 5, 2015

NJ Medical Costs Per Claim Increase

NJ is a jurisdiction where the employer has exclusive control over the selection of medical providers for workers' compensation claims. NJ also has no medical fee schedule. Neverthe less, WCRI report that medical costs per claim are increasing above the national average.

The report, CompScope™ Medical Benchmarks for New Jersey, 15th Edition, found medical payments per claim grew less than 3 percent per year from 2010 to 2012―about half the annual rate of the prior three years.  

The study cited changes in both key components of medical payments per workers’ compensation claim: the price paid for each service rendered and the number of services performed in each claim (generally called utilization).  

The study found a decrease or little change in utilization of many nonhospital services─a key factor in the recent slower growth in medical costs because payments for nonhospital care accounted for roughly two-thirds of medical payments in New Jersey. Slower growth in hospital outpatient payments per service was also a factor. Payments for hospital inpatient treatment continued to rise though. 

The recent trends coincided with an increase in the use of networks in caring for injured workers. States  that do not regulate reimbursements for medical care through a traditional fee schedule (like New Jersey) often use medical networks to help control medical costs through the management of claims and negotiated payment discounts.

Despite the recent slower growth, medical payments per claim in New Jersey remained higher than most of the 16 states WCRI studied, primarily due to higher prices paid for medical care. 

In several states, WCRI researchers saw slowdowns in claims growth similar to what they found in New Jersey, namely growth of 3 percent or less from 2010 to 2012, after growth of 4 to 8 percent a year, on average, from 2007 to 2010. Reasons for the slowdown differed by state, the study said. 

The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers' compensation systems.   

Click on the following link to purchase a copy of this study: