WC Medical Cost Containment Efforts Fade

According to the report's lead author, Ramona Tanabe, states are focusing on evaluating the effects of past medical cost containment moves "before moving forward with a new round of activities."

She said there is also more interest in studying the impact that medical cost containment initiatives have on "the quality of care received by injured workers.

The rapid growth of medical expenditures spurred adoption of medical cost containment laws for workers' comp between 1992 and 1997, but "since 1997 there have been few initiatives," Richard Victor, WCRI executive director, noted in a statement with the report.

Florida, it was noted, had dropped its managed care mandate on a system-wide basis, while Vermont dropped mandated managed care for the residual assigned risk market.

The WCRI study found a large and increasing variability of fee schedule levels across states–particularly those states with high fee schedule rates, while those at the low end remain static.

In other research, the WCRI found that cost containment efforts themselves could add to medical expenses. The institute's recently released "CompScope" report on Massachusetts workers' comp claims between 1994 to 1999 found that average medical cost containment expense per indemnity claim increased by 12.2 percent in 1998 after increasing 13.8 percent from 1996 to 1997.

Massachusetts' average medical payments per claim increased more than 9 percent from 1997 to 1998, the study found, driven in part by the fact that per-claim expenses for medical cost containment services grew nearly 18 percent from 1997 to 1998.