Controlling Workers' Compensation costs has been a concern for employers since the first state Workers' Compensation law was passed in Wisconsin in 1911.

Many factors affect the changes in those costs, however, including legislative and regulatory reform.

A new 18-state study released April 21 by the Cambridge, Mass.-based Workers Compensation Research Institute (WCRI) examines the factors driving Workers' Compensation costs by state, and measures the performance of the different state Workers' Compensation systems, how they compare with each other, and the way they have changed over time. The study is based on more than 7.6 million claims filed in the 18 states included in the study.

According to WCRI, the reports, CompScope Benchmarks, 16th Edition, are designed to help policymakers and others benchmark state system performance or a company's Workers' Compensation program, providing a baseline for tracking the effectiveness of policy changes and identifying important trends.

Each state report examines the way income benefits, overall medical payments, costs, use of benefits, duration of disability, litigiousness, benefit delivery expenses, timeliness of payment, and other metrics of system performance have changed from 2009 through 2014, with claims experience through 2015.

The 18 states in the study, which together represent about 60% of the nation's Workers' Compensation benefits paid, are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas and Iowa

The following is a sample of the key findings:

  • California's average medical payment per workers' compensation claim with more than seven days of lost time decreased in 2013 and 2014 after the state implemented the reform legislation, SB 863, in 2013.
  • Michigan's average total cost per claim with more than seven days of lost time was the lowest of the study states.
  • North Carolina's indemnity benefits per claim remained substantially above the median states studied, but growth has slowed consistent with the aims of the 2011 reforms.
  • The growth in payments per claim moderated in Louisiana since 2009.
  • Illinois' average total cost per workers' compensation claim decreased 8%, primarily because of reduction in the medical fee schedule rates in 2011.

To purchase the state reports, visit WCRI's website.

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