Workers' Comp Costs on the Rise

A new study by the Workers' Compensation Research Institute (WCRI) reports that the average workers' compensation total cost per claim in Wisconsin grew rapidly for four of the five years of the study, including eight percent in 2005/2006 claims.

The study concluded that the growth was driven primarily by the increase in the medical payments per claim. Medical costs per claim covering more than seven days of lost time grew throughout the study period, with double-digit growth in four of the five years of the study, including 14 percent in 2005/2006.

However, the average cost per claim in Wisconsin was lower than several other states measured by the WCRI. In fact, the average cost per claim in Wisconsin was 36 percent lower for claims made between 2003 and 2006 than the median of the other 13 study states.

Several factors played a significant role in the lower cost per claim in Wisconsin, including faster return-to-work ratios; lower permanent partial disability/lump-sum payments per claim; and low expenses per claim for indemnity and medical benefits to injured workers.

Medical cost containment expenses per claim increased 21 percent between 2005 and 2006. WCRI noted that, although growing at a rapid rate, the average medical cost containment expense per claim in Wisconsin was still the lowest of the other 13 study states at all claim maturities.

WCRI also reported that Wisconsin was among the fastest of the study states in terms of timeliness of first indemnity payment. Fifty-three percent of injured workers in the state were issued their first checks within 21 days of injury, compared to the 14-state median of 41 percent. Faster payments may have been influenced by the state agency's efforts to monitor timely payments and to provide payers with feedback about their performances.

The other states included in the study were Arkansas, California, Florida, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Tennessee, and Texas.