North Carolina Workers’ Compensation Outpatient Payments Growing: WCRI

Hospital charges for the treatment of injured workers in North Carolina are growing quickly in the wake of regulatory changes meant to reduce outpatient costs, according to a study by the Workers Compensation Research Institute (WCRI).

Regulations enacted in 2009 reduced the reimbursement rate for hospital outpatient services. Effective July 27, 2009, the outpatient fee schedule was reduced to 79 percent of charges from 95 percent for most hospitals. The study findings reflect eight months of experience under the fee schedule reduction.

According to WCRI Ramona Tanabe, deputy director and counsel, the WCRI study found that the payment-to-charge ratio for hospital outpatient services overall was reduced as expected, to 72 percent from 82 percent. Growth in the average payment per service was moderate at three percent.

However, the study reported the average charge per service grew 17 percent compared with a similar period for the prior year. By contrast, in prior years the changes for payments and charges generally were consistent.

The study reported that charges increased at a rate much faster than cost-savings estimates anticipated. Over time, the study said, this could affect the impact of the fee schedule reduction, because a lower percentage of a higher charge would be less likely to achieve the state cost-savings goals.

Hospital payments per claim in North Carolina have been among the highest of the 16 states studied since at least 2004.

According to the study, prior to the implementation of the fee schedule reduction, charges per service increased rapidly for some services, especially for treatment/operating/recovery room services.

Physical medicine services, a high frequency service, showed little impact from the fee schedule reduction because they were already being paid at significantly lower than 79 percent of charges, the study said.

The WCRI study is titled, “Early Impact of Outpatient Fee Schedule Reduction in North Carolina: CompScope Medical Benchmarks, 12th Edition.”

Topics Workers' Compensation Talent North Carolina