Workers’ Compensation claims counts are down again, reflecting an overall “macro” trend that has been persisting for over a decade. However, the types of claims that have been eliminated tend to be the smaller, less costly ones; overall they have dropped by 34% since 1999, while the most expensive claims (over $50,000) have only decreased by 7% over the same period. And, there has been an increase in the number of claims with long disability duration.
The data comes from a report by the National Council on Compensation Insurance, one fo the major rate-making and research organizations. NCCI’s research is top-notch, credible, and although it suffers from data limitations (it only has data on states where it is involved in rate setting) it clearly indicates national trends.
The big question is why? During periods of economic expansion and flat growth, rising and level/falling employment, the trend has continued. Declines have been consistent across injury types, jurisdictions, occupations, and employer types. Moreover, the shift in occupational types, driven by macro-factors such as off-shoring and increases in construction activity, appear to have little impact on this welcome trend.
Amidst the good news, there are clear signs of trouble.
Disability duration
NCCI looked at claim frequency by duration of disability, and found that there has been a 6% increase in claims with an indemnity duration of more than 31 days. And, the longer the duration of the disability, the smaller the decline in frequency.
Medical costs
The average annual rate of inflation from 1999 through 2004 was 9.8%. This was driven by higher prices, utilization, and the use of more types of medical procedures on the average claim (this from other sources, including WCRI research).
So, all claim counts are dropping, which is good. But the decrease in frequency has been overmatched by medical inflation. That’s bad.
What does this mean for you?
Manage the medical! Be especially careful to identify and manage lost time claims that may become long-term claims, as these most-costly claims appear to be increasing in frequency.
Jun
24
Stay with me here…
In Ohio, a cheif reason is that the BWC changed the rules in early 2004. At that time, they began to require that all medical providers be authorized by the Bureau. In order to become authorized, each individual provider, be it a doctor, clinic, hospital, lab, pharmacy, or any other facility or individual, must file paperwork with the BWC in order to be authorized to bill the Managed Care Organizations (MCO’s, the State’s and Ohio employer’s hand picked medical insurance companies ) for medical treatment. The MCO’s reputation for paying claims late, if at all, preceeds them. Providers often refuse to file the necessary paperwork so as not to become involved with the MCO process, preferring to have claimants run payment for treatment under either their employer provided benefits, if they are lucky enough to have them, or to bill the claimant directly. This is only one example of the unnecessary hoops claimants have to jump through to obtain their benefits. The administrative scandals that are raging in Ohio, to the tune over 300 million dollars of misappropriated funds and shitty investments, that are finally coming to light, only begin to point up the corruption and endemic screwing of claimants that is part and parcel of the workings of the Bureau of Workers’ Comp., the Industrial Commission of Ohio, and the State’s elected officers and their appointees.
But since you asked…