Workers’ compensation costs per claim in Florida, which dropped in the year following system reforms in 2003, showed signs of growth from 2005 to 2009, according to a new study.
The WCRI study found that the average indemnity cost per claim – payments for lost wages, loss of earning capacity, or permanent impairment or disability – rose three percent per year after decreases of more than 20 percent due to reforms related to permanent disability benefits, according to the study, CompScope Benchmarks for Florida 12th edition by the Workers Compensation Research Institute (WCRI).
Part of the moderate growth in indemnity costs per claim came from wage growth; and another part was driven by increase in lump-sum frequency and growth in the average lump-sum payment per claim, the study said.
At the same time, medical costs per claim in Florida continued to increase rapidly for most cases in 2009, the most recent study year. For all paid claims and medical-only claims, the average medical cost per claim grew seven percent and 10 percent in 2009 respectively.
Medical costs per claim in Florida grew five to six percent per year starting in 2005, following one-year of stabilization due to the fee schedule reforms. A main driver of the growth in medical costs per claim in 2005 was a price increase for chiropractors and physical/occupational therapists, resulting from a fee schedule increase. From 2006 to 2008, growth in the average payment per service for hospital outpatient services was a driver of the growth in medical costs per claim.
The study also noted the frequency of defense attorney involvement rose steadily from 2005 to 2009, at one to two percentage points per year, likely related to the steady growth in the frequency of claims with lump-sum settlements after 2005. The average defense attorney payment per claim in Florida grew 12 percent in 2009.
WCRI is an independent, not-for-profit research organization based in Cambridge, Mass.
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