TX WORKERS’ COMP COSTS RISE

A new study by the Workers Compensation Research Institute shows that workers’ compensation costs per claim in Texas continued to increase at double digit rates during recent years. According to WCRI, workers’ compensation costs per claim in Texas rose 11 percent between 1998 and 1999 as of mid-2000, following a 10 percent increase between 1997 and 1998. The major drivers behind the increase in overall costs per claim were an 11 percent growth in medical payments per claim and an increase in temporary disability duration of more than one week (a 7 percent increase). The study of 12 states, representing 50 percent of workers’ compensation claims nationwide, also found that Texas had the highest average benefit payments per average workers’ compensation claim ($4,169) of the states reviewed (for 1999 claims as of mid-2000). Factors that contribute to this result include higher per claim costs for medical care, higher indemnity benefits—wage replacement payments for lost time injuries—per claim, a higher proportion of claims with more than seven days lost time, a higher frequency of permanent partial disability (PPD) claims and longer duration of temporary disability. These per-claim costs are the highest or are among the highest of the study states. The study, CompScope(tm) Benchmarks: Multistate Comparisons, 1994-2000, compares the workers’ compensation systems in 12 large states: California, Connecticut, Florida, Georgia, Illinois, Indiana, Massachusetts, North Carolina, Pennsylvania, Tennessee, Texas and Wisconsin. Texas led the study states in both medical and indemnity benefit costs per claim. At $2,508, medical payments per claim are highest, 24 percent higher than in Illinois, the next highest state. Indemnity payments per claim were $1,661. Helping to offset the higher medical cost containment expenses is a low frequency of defense attorney involvement in workers’ compensation claims—just six percent of claims with 12-months maturity and nine percent for claims with 36-months maturity. Defense attorney involvement was 22 percent in the median of the 12 study states for the 36-month claims. The average defense attorney fees per claim in Texas ($1,617) are lower than the median of the study states ($1,918) for 1997 claims as of mid-2000.

Topics Trends Texas Claims Workers' Compensation