Comparing The Indiana Workers Compensation System With Other States

Transcription

1 Comparing The Indiana Workers Compensation System With Other States August 8, 2013 Today s Outline About WCRI CompScope Benchmark studies Other WCRI studies Major findings from CompScope Benchmarks, CompScope Medical Benchmarks, and other WCRI studies Questions and answers 2 About WCRI Independent, not-for-profit research organization Funded by diverse membership support Studies are peer-reviewed Resource for public officials & stakeholders Content-rich website: Over 400 WC studies published 3 1

2 WCRI Approach Mission Be a catalyst for improving WC systems by providing the public with high-quality, credible information on important public policy issues. Studies focus on benefit delivery system Do not make recommendations or take positions on issues 4 WCRI Provides Broad Scope Of Studies That Include Indiana Hospital/ASC FS Inventory CompScope WC And Group Health Comparisons Interstate Variation In Use Of Narcotics Hospital Cost Index IN Longer-Term Use Of Opioids MCC Inventory Prescription Benchmarks Physician Dispensing In WC Medical Price Index 5 Each Study... Addresses different questions Uses different data sources, research methods, and samples Evaluates different years and maturity of data Uses different approaches to control variables 6 2

3 What Is CompScope? Annual benchmarking study that compares state WC benefit delivery systems Contains 16 mostly larger-than-average states representing nearly 60% of U.S. WC benefits paid Goal is to facilitate continuous improvement and avoid cycles of crisis-reform-crisis Includes nearby states: IA, IL, MI, MN, WI 7 Scope Of CompScope Multistate Benchmarks CompScope Benefit amounts Timeliness Medical costs Disability duration Defense attorney involvement Vocational rehabilitation use Benefit delivery expenses CompScope Medical Medical costs Medical prices Utilization of services By provider type By service type 8 Today s Outline About WCRI CompScope Benchmark studies Other WCRI studies Major findings from CompScope Benchmarks, CompScope Medical Benchmarks, and other WCRI studies Questions and answers 9 3

4 Key Findings For Indiana From CompScope Benchmarks 2013 legislation addressed two key policy issues Medical costs per claim higher than typical and growing rapidly, mainly due to prices Lower maximum statutory benefit, one factor in lower indemnity costs per claim Longer time to first indemnity payment Benefit delivery expenses per claim among lowest of study states; lower for many expense measures Legislation (HB 1320) Addressed Several Key Policy Concerns Policy Issue: Higher and growing medical costs Enacts hospital FS set at 200% of Medicare, eff. 7/1/2014 Caps price of repackaged drugs at AWP set by original manufacturer Caps price of implants at actual cost plus 25% Policy Issue: Lower maximum benefit Increases benefits, in increments from Maximum weekly benefits for all benefit types increased 20% overall PP impairment amount per degree increased 16 25% overall Maximum compensation payable increased from $325k to $390k 11 IN Costs/Claim With More Than 7 Days Of Lost Time In Lower Group Of States Average Total Cost Per Claim $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 Median: $34,535 $30,358 MI TX MA MD IN WI MN NJ FL CA IA VA PA IL LA NC Other Midwestern States 2008/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages 12 4

5 Lower Indiana Costs/Claim With > 7 Days Of Lost Time: Masks Offsetting Factors Average Cost Per Claim Indiana 16-State Median % Difference Total $30,358 $34,535-12% Medical $17,252 $14, % Indemnity $9,813 $16,227-40% Expense/Claim With Expenses $3,324 $4,728-30% 2008/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages 13 Data And Methods In This Study Data reasonably representative of state experience 68% of Indiana claims; 49 81% across all 16 states Techniques to make interstate comparisons more meaningful Measures use same definitions across states and data sources Adjusted for interstate differences in Injury and industry mix Wage levels Waiting periods for benefits to start Trends shown are unadjusted numbers 14 Medical Was Main Driver Of Growth In Costs Per Claim In Indiana Average Cost Per Claim $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 AAPC*, 2005/ /11 Medical: 8.3% Indemnity: 2.7% Expenses: 6.4% 2005/ / / / / /11 Medical Indemnity Expenses Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix And Wages * Annual Average Percentage Change 15 5

6 Medical Accounted For Over 80% Of Growth In IN Costs Per Claim, Average Cost Per Claim 2005/ /11 Difference % Share Of Change Total $17,367 $23,996 $6,629 Medical $10,949 $16,287 $5,338 81% Indemnity $4,736 $5,417 $681 10% Expense $1,680 $2,290 $610 9% Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix And Wages 16 Indiana Medical Payments Per Claim Higher Than Typical At All Maturities Average Medical Payment Per Claim $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $25,000 $20,000 $15,000 $10,000 $5,000 MA MD CA MI TX FL PA MN NC LA IA NJ VA WI IN IL MA MI TX CA MN AR FL PA NJ IA NC IN WI LA VA IL Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix 2010/11 (12 Months Of Experience) 42% Higher Than Median State 2008/11 (36 Months Of Experience) 15% Higher Than Median State 17 IN Medical Payments/Claim Grew 49% 2005 To 2010, More Than Most States 60% Cumulative % Change In Medical Costs/Claim (2005/06 To 2010/11) 50% 40% 30% 20% 10% 0% TX AR MI FL NC MA CA LA IA MN IL NJ PA IN WI VA Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix 18 6

7 HB 1320 Addressed Higher IN Hospital Costs: A Factor In Higher Medical Costs Medical Cost Components Indiana 16-State Median % Difference Nonhospital Payments/Claim $8,295 $6,068 37% Prices Paid (Index) % Utilization (Index) % Hospital Outpatient Payments/Claim $7,224 $5,323 36% Payments/Service $314 $246 27% Services/Claim % Hospital Inpatient Payments/Claim (2009/11 Claims) $39,115 $30,748 27% 2010/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix 19 Major Findings: Medical Prices And Price Growth Indiana hospital payments per claim among highest for both outpatient and inpatient care Prices paid higher than typical for most nonhospital services States with no fee schedule or charge-based fee schedule had higher medical prices and faster growth in prices 20 Indiana Hospital Payments Per Claim Among Highest Of Study States $14,000 $11,341 Average Hospital Payment Per Claim $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 MA CA PA MI TX AR NJ FL IA MN LA VA WI IN IL NC No Hospital Fee Regulation 2009/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix 21 7

8 Higher Outpatient Costs Per Surgical Episode: States With No FS Or % Charges 160 Hospital Outpatient Cost Index (20-State Median = 100) MA OK MD PA MI CA TN TX GA NJ CT IA NC MN LA IN FL WI VA IL No FS %-of-charge-based Regulation Fixed Amount FS Other Hospital Outpatient Surgical Episodes In Calendar Year 2010 Source: Hospital Outpatient Cost Index For Workers Compensation, 2nd Edition (2013) 22 Earlier WCRI Study: Hospital FS At 200% Of Medicare Higher Than Typical Outpatient reimbursement: range was from 59% to 200% of Medicare across 11 states Indiana: At 200% of Medicare, would have been highest along with Texas Inpatient DRG reimbursement: range was from 43% to 354% of Medicare across 13 states Indiana: At 200% of Medicare, would have been tied for 2nd highest along with Mississippi Data Are Illustrative Rates As Of September 30, 2009 Source: Fee Schedules for Hospitals and Ambulatory Surgical Centers: A Guide for Policymakers (2010) 23 Introduction Of APC-Based Fee Schedule Produced Different Results In TN And TX Index Of Hospital Outpatient Costs Base Year 2005 = TX APC FS +30% -27% TN APC FS Tennessee Texas 20-State Average Hospital Outpatient Surgical Episodes, Calendar Year Source: Hospital Outpatient Cost Index For Workers Compensation, 2nd Edition (2013) 24 8

9 Indiana Hospital Outpatient Payments Under WC Higher Than For Group Health Indiana Hospital Outpatient Payments In 2008 Workers Compensation (WC) Group Health (GH) WC/GH Difference (%) Shoulder Surgical Episodes Knee Surgical Episodes $9,183 $7,302 26% $6,930 $5,924 17% Source: Comparing Workers Compensation And Group Health Hospital Outpatient Payments (2013) 25 IN WC Outpatient Payments 26% Higher Than Group Health For Shoulder Surgeries Hospital Outpatient Payments For Shoulder Surgical Episodes $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $9,183 $7,302 MA CA MI MD WI PA IN TN TX NC IA LA NJ IL FL VA Workers' Compensation Hospital Payments Group Health Hospital Payments Workers' Compensation And Group Health Hospital Outpatient Payments For Shoulder Surgical Episodes, 2008 Source: Comparing Workers Compensation And Group Health Hospital Outpatient Payments (2013) 26 Indiana Outpatient Payments Per Service Grew Faster Than Typical After 2008 Average Hospital Outpatient Payment Per Service $350 $300 $250 $200 $150 $100 $50 Indiana 2009/12 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages 2005/ / / / / /11 IN Median Of Regulated States Median Of Non-Regulated States Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix 27 9

10 Prices Paid For Most Indiana Nonhospital Services Higher Than Typical 250 Prices Paid (25-State Median = 100) Eval. & Mgmt Major Minor Radiology Radiology 178 Major Surgery 201 Pain Mgmt. Inj. 154 Neuro. Testing Physical Emergency Medicine Prices Paid For Nonhospital Services Rendered In 1st Half Of 2012 Source: WCRI Medical Price Index For Workers Compensation, Fifth Edition (2013) 28 Indiana Nonhospital Prices Paid Grew Like Median Of Non-Fee Schedule States Indexed To 2002 = Indiana Indiana Fee Schedule States (Median) Non-Fee Schedule States (Median) Prices Paid For Nonhospital Services In Calendar Year 2002 To 2012 (January Through June) Source: WCRI Medical Price Index For Workers Compensation, Fifth Edition (2013) 29 Indiana Prices Paid Under WC Higher Than Prices Paid Under Group Health Median Prices Paid In 2009 In Indiana Workers Compensation (WC) Group Health (GH) WC Prices Paid Over GH (%) A Common Knee Arthroscopy (CPT 29881) A Common Office Visit (CPT 99213) $2,717 $ % $76 $59 29% Source: A New Benchmark For Workers Compensation Fee Schedules: Prices Paid By Commercial Insurers? (2013) 30 10

11 Major Findings: Utilization Of Medical Services In Indiana Lower to typical utilization of nonhospital medical care helped to offset higher prices Services per claim for hospital outpatient care mostly typical of other states Hospital inpatient care more costly, but frequency fairly typical 31 Lower To Typical Utilization Of Nonhospital Services In Indiana Utilization (Median State = 100) Eval. & Mgmt Major Minor Radiology Radiology Major Surgery 84 Pain Mgmt. Inj. 69 Neuro. Testing Physical Emergency Medicine Utilization Indices For Selected Nonhospital Services, 2010/11 Claims With > 7 Days Of Lost Time 32 Payments/Episode For Hospital Inpatient Care: Indiana In Higher Group Of States $50,000 Avg. Hospital Payment Per Inpatient Episode $40,000 $30,000 $20,000 $10,000 $31,884 MI MA LA TX CA AR PA IA MN FL VA NJ WI IN IL NC No Hospital Inpatient Fee Regulation 2009/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix 33 11

12 Indiana Had Fairly Typical % Of Claims With Inpatient Care 14% % Of Claims, Hospital Inpatient Episodes 12% 10% 8% 6% 4% 2% 7.6% Median: 8.3% 0% MA CA WI TX IN IL NC FL NJ IA AR VA PA MI MN LA 2009/11 Claims With > 7 Days Of Lost Time With Hospital Inpatient Episodes, Adjusted For Injury/Industry Mix 34 Key Findings For Indiana From CompScope Benchmarks 2013 legislation addressed two key policy issues Medical costs per claim higher than typical and growing rapidly, mainly due to prices Lower maximum statutory benefit, one factor in lower indemnity costs per claim Longer time to first indemnity payment Benefit delivery expenses per claim among lowest of study states; lower for many expense measures 35 Indiana Had Lower Indemnity Benefits Per Claim, Driven By System Features $30,000 Average Indemnity Benefit Per Claim $25,000 $20,000 $15,000 $9,813 $10,000 $5,000 IN WI TX NJ MN MI FL MD MA CA VA IA IL LA PA NC 2008/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages Note: Income benefits include settlements, which may include some amount for future medical payments

13 Factor In Lower Indemnity Benefits/Claim In Indiana: Faster Return To Work Lowest % of cases with more than one week off work among 16 states Shorter duration of temporary disability than typical May be a win/win for workers and employers, and WCRI is collecting more information through survey of injured workers 37 Indiana Had Lowest % Of Workers With At Least 1 Week Off Work 30% % Of Claims 25% 20% 15% 10% 5% 14% Median: 21% 0% IN MI WI VA MN PA IA NC FL LA TX CA MA NJ IL MD 2008/11 Claims With > 7 Days Of Lost Time As A % Of All Paid Claims, Adjusted For Injury/Industry Mix 38 Duration Of Temporary Disability Shorter In Indiana Than In Many States 30 Weeks Of Temporary Disability Weeks Median: 14 Weeks 0 IA WI IN FL MN NJ TX MD IL CA NC* 2008/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages * Wage-Loss And PPD 39 13

14 System Features That May Contribute To Shorter TD Duration In Indiana Termination of TTD without notice to the worker permitted under several circumstances, in addition to return to work Termination permitted after prior notice of intent to terminate when the worker reaches MMI or is released to work If worker contests termination or requests an IME, an additional 14 days of TTD must be paid If Board concludes proposed termination was proper, worker must repay any overpayment of TTD 40 Factor In Lower IN Indemnity Benefits: Less Frequent And Costly PP/LS Claims 37% of Indiana workers received permanent partial benefits or lump-sum settlements; among lowest of study states At about $12,200, average permanent partial/lumpsum payment/claim was lower than in many states 41 Indiana Workers Received PP Payments Or Lump-Sum Settlements Less Often % Of Claims 60% 50% 40% 30% 20% No/Little Lump Sum Of Future Medical 37% Lump Sum Of Future Medical Allowed 10% 0% NJ MN TX IN WI MD IL IA FL CA NC 2008/11 PPD/Lump Sum Claims As A % Of Claims With > 7 Days Of Lost Time 42 14

15 When Paid, PP/Lump-Sum Payments Per Claim Were Lower In Indiana Average PP/Lump-Sum Payment Per PP/Lump-Sum Claim $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 No/Little Lump Sum Of Future Medical Lump Sum Of Future Medical Allowed TX NJ MN IN CA WI FL MD IL IA NC 2008/11 PPD/Lump Sum Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages 43 System Features That May Contribute To PP/Lump-Sum Claim Results In Indiana Permanent partial benefits paid for impairment only; typically based on ratings assigned by treating doctor Impairment rated according to degrees; values per degree vary Temporary disability payments over 125 weeks can be credited against any PP payments due, once MMI has been reached PP amounts at stake are relatively low; may be less incentive for attorney involvement 44 Factor In Lower Indemnity Benefits Per Claim: IN Approach In Setting Maximum Maximum statutory weekly benefits increased periodically by legislature Last increase in 2009 Recent legislation increases benefits beginning in 2014 By contrast, most states have automatic updates, tied to the statewide average weekly wage Maximum statutory benefit lower than many states 1 in 6 injured workers had benefits limited by the maximum, a higher share than most study states 45 15

16 Recent Legislation Will Increase Income Benefits Beginning In 2014 HB 1320 increases benefits from 2014 to 2016 Maximum weekly benefit increases 20% overall, from $650 To $694 effective 7/1/2014 To $737 effective 7/1/2015 To $780 effective 7/1/2016 Permanent partial impairment benefits amount per degree increases 16% 25% overall; more for lower categories Maximum compensation payable increases from $325,000 to $390, Maximum Statutory Weekly Benefit Lower In Indiana Than Most States $1,600 Maximum Weekly Benefit $1,400 $1,200 $1,000 $800 $600 $400 $650 $200 AR LA IN MI TX FL NJ WI NC MN PA VA CA MA IL IA Maximum Weekly Statutory Temporary Total Disability Benefit As Of June 30, IN Maximum Statutory Benefit Was 84% Of SAWW; Many States At 100% Or Higher 250% 200% Percentage 150% 100% 84% 50% 0% LA NJ IN* AR TX MI MN* FL MA PA VA CA NC WI IL IA *Maximum Benefit Increased Periodically By Legislation Maximum Weekly Statutory Temporary Total Disability Benefit As A Percentage Of The Statewide Average Weekly Wage,

17 1 In 6 Injured Workers In Indiana Had Benefits Limited By Statutory Maximum 30% % Of Claims Affected By Maximum Benefit 25% 20% 15% 10% 5% 0% 16% IA IL MA NC CA VA MN FL PA MD MI WI TX IN NJ LA 2010/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix 49 Key Findings For Indiana From CompScope Benchmarks 2013 legislation addressed two key policy issues Medical costs per claim higher than typical and growing rapidly, mainly due to prices Lower maximum statutory benefit, one factor in lower indemnity costs per claim Longer time to first indemnity payment Benefit delivery expenses per claim among lowest of study states; lower for many expense measures 50 IN Rate Of First Indemnity Payment At 21 Days Among Lowest Of Study States 70% 60% Most States In 45 55% Range % Of Claims 50% 40% 30% 41% 20% 10% 0% MD VA IN NC IL FL CA MI PA LA IA WI MN NJ TX MA Claims With 1st Indemnity Payment Within 21 Days Of Injury, 2010/11 Claims With > 7 Days Of Lost Time 51 17

18 Longer Time To Payment After Payor Notice Drove Slower Indemnity Payment % Of Claims With 1st Indemnity Payment Within 21 Days Of Injury % Of Claims Reported To Payor Within 3 Days Of Injury % Of Claims With 1st Indemnity Payment Within 14 Days Of Payor Notice Indiana 16-State Median 41% 45% 58% 57% 38% 44% 2010/11 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix 52 Key Findings For Indiana From CompScope Benchmarks 2013 legislation addressed two key policy issues Medical costs per claim higher than typical and growing rapidly, mainly due to prices Lower maximum statutory benefit, one factor in lower indemnity costs per claim Longer time to first indemnity payment Benefit delivery expenses per claim among lowest of study states; lower for many expense measures 53 Benefit Delivery Expense Per Claim In Indiana Among Lowest Of 16 States Average Benefit Delivery Expense Per Claim $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $3,324 WI IN MD MA IA MI MN VA TX IL PA NC NJ FL CA LA 2008/11 Claims With > 7 Days Of Lost Time And Benefit Delivery Expenses, Adjusted For Injury/Industry Mix 54 18

19 Expenses To Manage Claims Lower In Indiana For Many Expense Measures Performance Measure Medical Cost Containment Expense/Claim % Claims With Defense Attorneys (payment > $500) Defense Attorney Payment Per Claim (payment > $500) Indiana 16-State Median Difference Multistate Ranking $2,526 $2,649-5% Typical 15% 26% -11 ppt Lower $3,561 $5,147-31% Lower % Claims With Medical-Legal 8% 24% -16 ppt Lower Medical-Legal Expense/Claim $1,208 $1,434-16% Lower 2008/11 Claims With > 7 Days Of Lost Time And Benefit Delivery Expenses, Adjusted For Injury/Industry Mix 55 Recap: Key Findings For Indiana From CompScope Benchmarks 2013 legislation addressed two key policy issues Medical costs per claim higher than typical and growing rapidly, mainly due to prices Lower maximum statutory benefit, one factor in lower indemnity costs per claim Longer time to first indemnity payment Benefit delivery expenses per claim among lowest of study states; lower for many expense measures 56 Other Key Findings For Indiana: WCRI Rx Studies Rx payments per claim lower than typical Lower amount of narcotics than typical, but more frequent use % of longer-term users of narcotics lower than typical in Indiana Physician dispensing of Rx was typical in Indiana, but lower share of Rx payments 57 19

20 Indiana Rx Payments Per Claim With Rx 22% Lower Than 17-State Median Rx Payment Per Claim With Rx $1,400 $1,200 $1,000 $800 $600 $400 $200 Median: $512 $398 MI MN WI IN IA NJ MA IL TN MD FL NC PA TX CA* NY* LA * CA And NY Data Partially Reflect Post-Reform Experience After Major Statutory Changes In 2007 Affecting Reimbursements For Pharmaceuticals Claims With > 7 Days Of Lost Time, Injuries From October 2005 To September 2006, Prescriptions Filled Through March 2008 Source: Prescription Benchmarks, 2nd Edition: Trends And Interstate Comparisons (2011) 58 Lower Amount Of Narcotics Than Typical In Indiana, More Frequent Use Frequency And Utilization Of Narcotics (nonsurgical cases) Indiana 17-State Median % Or ppt Difference Average MEA/Claim 1,267 1,792-29% Average # Of Rx/Claim % % Claims With Pain Medications That Had Narcotics 81% 75% 6 ppt Weaker Strength Narcotics 98% 93% 5 ppt Schedule II Narcotics 15% 24% -9 ppt % Claims With Narcotics Longer-Term Users 4.6% 6.4% -1.8 ppt Nonsurgical Cases With > 7 Days Of Lost Time, Injuries From October 2005 To September 2006, Prescriptions Filled Within 24 Months Through March 2008 Source: Interstate Variations In Use Of Narcotics (2011) 59 Indiana Had Among Lowest % Of Longer-Term Users Of Narcotics % Of Claims With Narcotics Identified As Longer-Term Users Of Narcotics 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% AZ WI NJ IN IA MN AR MI IL MA GA CT TN VA NC CA SC PA TX* NY LA * Results Prior To Implementation Of Closed Formulary On September 1, 2011 Nonsurgical Claims With > 7 Days Of Lost Time, Injuries From October 2008 To September 2009, Prescriptions Filled Through March 2011 Source: Longer-Term Use Of Opioids (2012) 60 20

21 IN Physician Dispensing Of Rx Fairly Typical; Lower Share Of Rx Payments % Of Rx For Physician-Dispensed Rx 80% 60% 40% 20% 0% 80% 60% 40% 20% 0% MA NY TX AR MN LA VA WI NC IA SC NJ TN PA IN MI CT AZ MD GA IL FL CA 2010/11 Claims With > 7 Days Of Lost Time With Rx Source: Physician Dispensing In Workers Compensation (2012) 61 % Of All Rx That Were Physician-Dispensed % Of Rx Payments That Were Physician-Dispensed MA NY TX AR MN NJ VA IA WI IN NC LA MI TN SC PA AZ CT MD GA CA FL IL Thank You! Please Direct Questions To: Carol Telles, Senior Analyst ctelles@wcrinet.org