Workers' Compensation Medical Costs Per Claim in Maryland Among Lowest in New Study, WCRI Reports

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Workers’ compensation costs per claim for medical care of injured workers in Maryland were among the lowest of 15 states in part due to a lower fee schedule, according to a new study by the Workers Compensation Research Institute (WCRI).

The study by the Cambridge, Mass.-based WCRI found that lower prices paid for nonhospital services and typical utilization of most nonhospital services were among the drivers of lower medical costs per claim in Maryland.

Another WCRI study reported that even after fee schedule increases in 2006, the overall fee schedule rate in Maryland was still among the lowest of the 42 states with workers’ compensation fee schedules. Despite the lower fee schedule rates, the WCRI study Comparing Outcomes for Injured Workers in Michigan, which contains information about worker outcomes in 11 states, reported Maryland workers still reported generally typical access to and satisfaction with care.

As a result the Maryland workers’ compensation system provided both workers and employers a better value proposition compared to most other states studied, according to WCRI.

The study also found that payments per claim for lost wages, known as indemnity benefits, with more than seven days of lost time in Maryland increased rapidly at 10 percent in 2007.

This was due mainly to increases in average duration of temporary disability and average weekly wage.

Lump-sum payments per claim also grew rapidly in 2007 in both early and mature claims, according to WCRI.

Litigation expenses in Maryland were higher compared to the typical study state, likely a result of the “dueling doctor” approach used in determining permanent partial disability (PPD) benefits.

Despite the most frequent use of medical-legal services among study states, the average medical-legal expense per claim in Maryland was typical compared to many other states. Also, defense attorneys were involved most often in Maryland, but the average defense attorney payment per claim was the lowest of the 15 states.

WCRI also found that it took longer for injured workers in Maryland to receive their first indemnity payments. Despite the fastest injury reporting, the speed of payment once payor received notice of injury in Maryland was the slowest of the 15 states.

This result is likely related to the unusual claim filing requirement that the statute places on injured workers in Maryland. Unlike most states, Maryland injured workers have to file a claim in order to receive income benefits.

The study, CompScope™ Benchmarks for Maryland, 10^th Edition, provides a meaningful comparison of the workers’ compensation systems in 15 states on key performance measures such as benefit payments and costs per claim, timeliness of payments, and defense attorney involvement by analyzing a similar group of claims and adjusting for injury mix, wage levels and industry types.

The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, health care, and disability issues. Its members include employers, insurers, governmental entities, insurance regulators and state administrative agencies in the U.S., Canada, Australia and New Zealand, as well as several state labor organizations.

To order this report, visit the WCRI website: www.wcrinet.org.