A new report from the Workers Compensation Research Institute outlines a drop in workers compensation costs in Delaware after reforms went into effect.
“In many states, policymakers and other stakeholders are looking to fee schedules to help control the growth of medical care costs in their workers’ compensation systems while avoiding access-to-care issues,” said John Ruser, CEO of WCRI. “Our research helps these decision makers learn if the reforms they passed are having the impact they intended or need to be modified.”
The objective of the fee schedule changes in Delaware’s HB 373 was to reduce medical expenses by 33 percent by January 31, 2017, over three consecutive annual reductions — a 20 percent reduction in 2015 and additional 5 and 8 percent reductions in 2016 and 2017, respectively for those injured on the job.
Under the law, Delaware transitioned to Medicare-based fee schedules for professional services, hospital inpatient and outpatient services, and ambulatory surgery center (ASC) services effective January 31, 2015.
The following are among the study’s major findings:
- Before the 2015 change, Delaware had the second highest overall fee schedule rate for professional services relative to Medicare (123 percent above Medicare) among 44 areas. with fee schedules. After the three updates, overall workers’ compensation fee schedule rates for professional services decreased by 40 percent as compared with the pre-reform 2014 fee schedule rates. In 2017, the overall professional fee schedule in Delaware was 31 percent above Medicare, similar to the fee schedule rates of states with relatively lower fee schedules.
- In 2015, the workers’ compensation fee schedule rates for common inpatient services were set 64–68 percent higher than Medicare rates in Delaware. In 2016, workers’ compensation fee schedule rates for common types of hospitalization decreased by 7 percent, followed by another reduction of about 13–14 percent in 2017, when the percentage difference between workers’ compensation and Medicare was 11–30 percent across common types of hospital stays.
The legislation was passed after Delaware reported among the highest workers compensation insurance rates in the nation, with companies threatening to leave the state. Insurance premiums have since declined as costs went down.
Not answered in the report was whether the lower rates led to decreased options for injured workers. Some physicians do not accept workers comp claims.
To learn more about the study or to download a copy, visit WCRI’s website at https://www.wcrinet.org/reports/evaluation-of-the-2015-2016-and-2017-fee-schedule-changes-in-delaware. (The report costs $35).
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA