Despite Fewer Claims, Louisiana State Employees’ Workers’ Comp Costs Rise

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The number of workers’ compensation claims filed by Louisiana state employees dropped by nearly one-third over the last eight years, but claims costs for state agencies continued to surge higher, according to a state audit.

Legislative Auditor Daryl Purpera’s office reviewed claims and costs for state employees from the 2006 through 2013 budget years. The audit shows that even as the number of claims fell 30 percent during the period, workers’ comp costs grew by more than 49 percent, from $44.3 million to $66.2 million.

“We found that the high cost of workers’ compensation is due, in part, to unlimited temporary total disability benefits, an increase in the amount of time workers are off the job, the use of an outdated fee schedule to reimburse medical providers, the lack of a prescription drug formulary and a costly dispute resolution process,” auditors wrote.

The Louisiana Workforce Commission oversees workers’ compensation, which pays for lost time at work, medical costs and expenses related to managing and litigating claims. The audit says the cost of each of those categories grew for state government over the years it reviewed.

Purpera’s office recommended shrinking costs by adopting policies used by private businesses and reworking the reimbursement schedule.

The audit says Louisiana hasn’t regularly revised the reimbursement rates paid to doctors and other healthcare providers. The workers’ comp program pays higher reimbursement rates than Medicare.

Meanwhile, Louisiana allows reimbursements outside of the existing fee schedule for outpatient procedures, so the charges are higher than what other states or commercial insurance cover, according to the audit.

Curt Eysink, executive director of the LWC, said in a written response that his agency is working to update the fee schedule – and require that outpatient costs follow that schedule.