A new 16-state study from the Workers’ Compensation Research Institute (WCRI) says that in half of the study states, hospital outpatient payments for shoulder surgeries in workers’ compensation were at least $2,000 (or 43 percent) higher than group health, which is otherwise known as commercial or private insurance.
The study, Comparing Workers’ Compensation and Group Health Hospital Outpatient Payments, is the first to compare hospital payments for the same surgical procedure when paid for by group health versus workers’ compensation.
“These are large differences in costs in many states. Policymakers looking to contain medical costs in these states may want to ask if the difference is necessary to induce hospital outpatient departments to treat injured workers,” said Richard Victor, WCRI’s executive director.
The study also found that workers’ compensation payments exceeded group health payments by the most in states where the price regulations were based on a percent of the hospital’s charges or had no hospital price regulation.
The study compares hospital outpatient payments made by workers’ compensation and group health for treatment of common surgical cases in 16 large states, which represent 60 percent of the workers’ compensation benefits paid in the United States, and covers hospital outpatient services delivered in 2008.
Given that most study states, except Illinois, North Carolina, and Texas, did not have substantial changes in their fee schedule regulations after 2008, the interstate comparisons should provide a reasonable approximation for current state rankings in workers’ compensation/group health payment differences.
WCRI is an independent, not-for-profit research organization based in Cambridge, Mass.