Workers’ Comp Cost Growth Curbed Before Reforms, Study Finds
Medical costs for injured workers in California moderated before the implementation of a law (SB 863) overhauling the state workers' compensation program, according to a study by the Workers Compensation Research Institute, the Insurance Journal reports (Insurance Journal, 5/12).
In September 2012, Gov. Jerry Brown (D) signed SB 863 into law.
The law -- by Sens. Kevin de León (D-Los Angeles) and Jose Solorio (D-Anaheim) -- changed the formula used to calculate benefits for injured workers, increasing their compensation by an average of 29%.
It also eliminated benefits for certain health conditions that often are subject to lawsuits, such as psychiatric problems, sexual dysfunction and sleep loss.
The State Compensation Insurance Fund said employers likely would pay less for workers' compensation insurance under the law.
Details of New Study
For the study, WCRI examined the bill's effect on the state workers' compensation system and compared changes implemented through SB 863 with reforms in other states. The goal of the study is to set benchmarks for such systems in order to weigh their costs and benefits (Walters, "Capitol Alert," Sacramento Bee, 5/12).
Researchers found that in 2010 and 2011, medical payments per claim in California grew by about 3%, down from 8% annual growth since 2005. According to the Insurance Journal, the drop can be attributed to stability of:
- Prices paid for professional services; and
- Use of nonhospital services.
However, hospital payments per inpatient visit increased significantly between 2006 and 2011, according to the report.
Based on experiences in other states, WCRI predicted that California's shift to a "resource-based relative value scale fee schedule" likely will shift payments from specialty care to primary care providers (Insurance Journal, 5/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.