Cost Per Workers’ Compensation Claim Rising in Indiana: Study

December 11, 2012

The average cost of a workers’ compensation claim in Indiana grew rapidly in recent years, mainly driven by the high price of medical care, according to a new study, Benchmarks for Indiana, CompScope 13th Edition, by the Workers Compensation Research Institute (WCRI).

The study found that medical payments were the major factor behind rising workers’ compensation claim costs, which grew 7 percent per year from 2005 to 2010. In spite of these increases, overall costs per workers’ compensation claim were 12 percent lower in Indiana compared with the typical state in the 16-state study.

Among the study’s other findings:

  • Indemnity benefits per claim — payments to replace lost wages — were 40 percent lower than the median of the states in the study, due to faster return to work and less frequent and less costly permanent partial disability/lump-sum settlement payments.
  • Higher medical prices (consistent with states with no price regulation) drove higher medical payments per claim — 15 percent higher — of the 16 study states.
  • The percentage of workers receiving their first indemnity payment within 21 days of injury was slightly lower in Indiana at 41 percent than the median study state at 45 percent. A regulatory provision that extends the required payment period to 29 days may be a reason behind this finding.

The study benchmarks the performance of the workers’ compensation system in Indiana, as well as in 15 other states, focusing on income benefits, overall medical payments, costs, frequency of benefits, duration of disability, litigiousness, benefit delivery expenses, timeliness of payment, and other metrics.

Source: WCRI

 

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