Report: Workers' comp medical costs soar - Sacramento Business Journal:

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The research also found that thosr costs would have been billionsw more without system reforms earlierfthis decade. The California Workers’ Compensation Institute, a researchb organization made up of insurersand self-insurex employers, recently released the studgy on post-reform changes in workers’ comp medicak payments in the Golden State. The study is the fourth in a five-pary series updating data on claim outcomes followinf system reforms between 2002and 2004.
All the data in the reporf reflect when injuriesoccurred — known as the accidenf year — instead of when an accident was Since 2005, insurance companies’ payments have increased significantluy for treatment, medications/durable medical equipment, medical-legap reports and medical management, the institute said. Between 2005 and average medical payments for all claims oneyear post-injuru rose 23 percent, to $2,582 from $2,100, the studyu found.
Meanwhile, “average medical payments on more expensive indemnithy claims climbed 28percent (from $4,44w to $5,665),” the report Even though medical costs are rising, the reform are estimated to have saved cumulativelyg between $12.8 billion and $25.3 billion in medical cost between 2004 and 2008. Some of the medicakl management tools put in place by the reforms were medical treatmentfutilization schedule, mandatory utilization review, bill review and medical providetr networks. The institute estimates that withoutthe workers’ comp medical inflation would have continued at somewhered between 8.
2 percent a year — whicy is half the pre-reform annual inflatio n rate — and 16.4 percent, which is the averagre annual inflation rate between 1999 and 2002.