Tennessee Reforms Have Stabilized Workers’ Comp Market

NU Online News Service, Feb. 7, 2:27 p.m. EST

Reforms enacted seven years ago in Tennessee have helped to stabilize total costs per claim, according to a study by the Workers Compensation Research Institute (WCRI).

Total workers’ compensation costs per claim in Tennessee decreased 6 percent, or $2,100 per claim, for claims from 2005 evaluated in the first quarter of 2009, said WCRI.

The reduction is “likely due to the 2004 legislation,” which dealt with reforms related to the state’s medical fee schedule, permanent partial disability (PPD) provisions, the dispute resolution process and timeliness of payment.

A previous study by Cambridge, Mass.-based WCRI found that Tennessee had one of the highest costs per claim in the nation. That report concluded that Tennessee was second to Texas in average medical payment per claim for claims with more than seven days of lost time. The state claim average was $7,218, behind Texas at $8,048.

The latest study said total costs per claim with more than seven days of lost time stabilized, growing less than 1 percent per year from 2005/2006 to 2008/2009.

The WCRI said reforms that addressed PPD “had a large and sustained impact on the average PPD/lump sum payment per claim with more than seven days of lost time and PPD or lump sum settlement.”

The reforms also impacted costs for defense attorneys per claim, which decreased 17 percent for claims with more than seven days of lost time and payment greater than $500, the WCRI said.