Medical claim costs for injured workers have increased faster than would be expected based on medical inflation rates alone, a workers' compensation data and statistics group has found.

The National Council on Compensation Insurance in Boca Raton, Fla., said major drivers were changes in methods of treatment and numbers of treatments.

Its study found that over the 1996/97 to 2001/02 period, the medical care component of the Consumer Price Index increased by 21 percent compared with an increase of 73 percent for paid medical severity on lost-time claims closed within 24 months of date of injury.

Among the key findings announced by NCCI:

o There has been a shift to relatively more severe injuries. The share of closed lost-time claims at 24 months with diagnosis codes with high medical severity increased by two percentage points from 1996 to 2002.

At the same time, NCCI said, the share with low severity declined by eight percentage points over the period. Among the top-10 leading diagnoses, there was a shift toward more higher-cost sprains of rotator cuffs and fewer lower-cost lumbosacral sprains.

o This shift to more serious injuries led to a modest increase (about 10 percent) in medical severities from accident years 1996/97 to 2001/02.

o The key driver, accounting for approximately a 35 percent increase in medical severities over the years studied, is the markedly higher number of treatments within each diagnosis and a different mix of treatments across service categories.

As an example, NCCI said there might be a shift from diagnostic radiology to complex diagnostic testing, or from complex surgery to physical therapy.

o A combination of price increases for medical services and additional changes in the treatment mix accounts for about a 25 percent increase in medical severity over the time period.

NCCI said its study examines treatment mix shifts within a service category.

For example, within the broad service category "drugs, supplies, and durable medical equipment," there might be a relative shift from lower-priced drugs to high-priced durable medical equipment, or a shift within "complex surgery and anesthesia" from one type of complex surgery to another.

The NCCI analysis found that sprains of the knee, leg, shoulder and arm had the largest increases in severity, experiencing above-average increases in the average number of treatments and the average price-per-treatment.

For sprains of the knee and leg, NCCI said, physical therapy is the service category contributing the most to the severity increase of $2,400. Its relatively-low price of $40 in 2001/02 is offset by the high number of treatments, which more than doubled from 11 to 25.

According to the study, the average number of complex surgery and anesthesia treatments also more than doubled from 1996/97 to 2001/02. Even though the number is small (about one treatment on average), because this is a high-priced treatment (greater than $900 in 2001/2002), it contributes a quarter of the severity increase, NCCI said.

The hospital services category was also listed as a top contributor to the severity increase, driven by a high average price that more than doubled.

NCCI said the increase likely reflected a combination of both price increases and a shift to more expensive services.

For shoulder and arm sprains, NCCI reported the number of physical therapy treatments "is high and has almost doubled." The number of complex surgery and anesthesia treatments tripled, and the average price of hospital services more than doubled, the study found.

The full report is online at http://www.ncci.com/NCCI/index.aspx

Special Reports /

Comp Claim Cost Rise Outpaces Medical Inflation, NCCI Says

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