WCRI: Average Total Cost of Penn. Workers’ Comp Claims Highest of Studied States

May 22, 2019

The average total cost of a Pennsylvania workers’ compensation claim is among the highest of 18 states studied, with litigation costs a key driver of higher overall benefit delivery expenses, according to a recent study by the Workers Compensation Research Institute (WCRI).

“High litigation expenses were driven by the percentage of claims with medical-legal expenses and higher payments for such expenses,” said Ramona Tanabe, executive vice president and counsel of WCRI, in a WCRI press release. “Additionally, while Pennsylvania had typical attorney involvement, the average defense attorney payment per claim was higher compared with other study states.”

The study, CompScopeâ„¢ Benchmarks for Pennsylvania, 19th Edition, compared Pennsylvania with workers’ compensation systems in 17 other states. The higher indemnity benefits per claim in Pennsylvania compared with the 18-state median were mainly due to longer duration of temporary disability and larger lump-sum settlements, which, in part, reflect some characteristics of the wage-loss benefit system. For the study, WCRI analyzed workers’ compensation claims with experience through March 2018.

“Approaches to terminating benefits, as well as the speed of the dispute resolution process in Pennsylvania may have also contributed to longer duration of temporary disability,” Tanabe said in the release.

The following are among the study’s other findings:

  • Since 2012, total costs per claim with more than seven days of lost time in Pennsylvania increased 3% per year on average for most claim maturities.
  • Medical payments per claim were 20% higher than in the median state studied for 2015 claims.
  • For 2017 claims, medical payments per claim were 4% higher than the median study state.

Source: The Workers Compensation Research Institute

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