WCRI Study: Medical Costs Lower in Mass. Workers’ Comp System

July 31, 2000

The costs of medical care for injured workers in Massachusetts are significantly lower than the other states reviewed in a study by the Workers Compensation Research Institute.

The study of eight states, representing 40 percent of the nation’s workers compensation benefits, also found that in Massachusetts: Insurers receive notice of injury later, but the first payment is received more quickly by the injured worker. The typical worker returns to work more quickly, and litigiousness is higher than average. In addition to Massachusetts, the states included in the WCRI study were: California, Connecticut, Georgia, Florida, Minnesota, Pennsylvania and Texas.

“Massachusetts has implemented several strategies to contain medical costs, including utilization review, fee schedules and treatment guidelines,” said Dr. Richard Victor, executive director of the Cambridge-based WCRI. “At the same time Massachusetts should assess the implications of these strategies for access to quality medical care.”

The study, part of WCRI’s CompScope series, provides a comparison of the workers’ compensation systems in eight large states. Key performance measures include benefit payments and claim costs, timeliness of payments and attorney involvement.

Comparability across states is assured by analyzing a similar group of claims and adjusting for industry mix, wage levels and injury type. Medical benefits per claim in Massachusetts was about $2,900, the lowest of the eight states and 40 percent lower than the average of $4,800.

Massachusetts lagged behind most states in speed of reporting injuries to payors. In only 26 percent of claims did payors receive notice within three days of the injury. This is believed to be important because early notice can provide a win-win by facilitating referral to quality medical care and prompt payment of income benefits.

By contrast, Florida payors received injury notices within three days 49 percent of the time – across all states, the average was 33 percent. In spite of the tardy notification, Massachusetts had the highest timeliness of payment among the eight states. Seventy-two percent of injured workers received the first benefit payment within 14 days of notice, significantly higher than the eight state average of 58 percent. Injured workers in

Massachusetts were more likely to spend more than seven days away from the job (26 percent) than workers in the other states, according to the study. This compares with 14 percent in Georgia and 15 percent in Minnesota. Defense attorneys were involved more frequently in claims (21 percent) than the eight state average of 17 percent. The Workers Compensation Research Institute is a not-for-profit membership organization supported in its public policy research by employers, insurers, insurance regulators and state regulatory agencies as well as several state labor organizations.

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