Texas Sees Reduction in Average Cost of Work Comp Claim

November 6, 2012

The average cost of a workers’ compensation claim in Texas declined recently, following several years of growth, according to a new study, Monitoring the Impact of Reforms and Recession in Texas: CompScope 13th Edition, by the Workers Compensation Research Institute (WCRI).

WCRI reported that costs per workers’ compensation claim in Texas fell 4 percent in 2010, a larger drop than in most of the states in the16-state study. The decline came after three years of growth averaging 5 percent per year from 2006 to 2009.

The study found the cost of indemnity benefits — payments for lost wages of injured workers — decreased by 6 percent in 2010, driven mainly by a drop in the duration of temporary disability. The decline in duration may be related to recovery from the recession.

At the same time, the study found that medical payments per claim were fairly stable in 2010, dropping by 2 percent, despite growth in prices paid for nonhospital services.

The study observed that the period of growth in claim costs between 2006 and 2009 reflected the impact of reforms to the Texas workers’ compensation system, which became effective in 2006 and 2008, as well as the recession. Those reforms enacted a new medical fee schedule and increased indemnity benefits. The recession likely prolonged the period some workers received indemnity payments before returning to work.

Source: WCRI