Louisiana WC Costs-Per-Claim Jump 11%, WCRI Finds

NU Online News Service, Dec. 23, 11:54 a.m. EST

Workers’ compensation costs per claim in Louisiana shows the fastest growth in a 16-state study, according to the Workers Compensation Research Institute (WCRI).

WCRI reports that its study, CompScope Benchmarks for Louisiana, 12th Edition, finds a rise in costs per claim of 11 percent annually, from 2007 to 2009.

According to WCRI, this rapid growth relative to other states may reflect some impact from the recession. The organization notes that the recession’s effects appear to have been less severe inLouisianathan in other states, due in part due to the post-Hurricane Katrina recovery.

The main driver in the growth of indemnity benefits per claim was an increase of nearly two weeks in the average length of temporary disability.

Medical payments per claim also grew faster in Louisiana during the period than in other study states—26 percent compared to about 16 percent in the typical study state.

Another factor in the higher medical payments per claim is that Louisianahas the highest prescription payments per claim.

The study notes that state officials and system stakeholders view medical treatment guidelines enacted in 2009 as a step toward possibly improving medical care for workers and reducing costs to employers and insurers.

Mark Walls, assistant vice president, claims, with Safety National in St. Louis,Mo., tells NU Online News Service, “The recently released WCRI studies illustrate the continued escalation of workers' compensation costs nationwide. Rising medical costs are the main reason for this continued trend, and this shows no signs of leveling off.”

RegardingLouisiana’s increase, Walls observes, “I suspect this is a direct result of the economy. Louisianahas a wage-loss benefit that pays for up to 10 years. The lack of jobs due to economic conditions can make it very difficult to return injured workers to pre-injury wages.”

WCRI’s studies, he adds, illustrate the need “for pricing increases in the workers' compensation market. The industry combined ratios are well over 100. With continued escalation of costs, that is not sustainable. Premium rates have to increase to keep up with continually increasing claims costs.”

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