“The general explanation for the filed decrease, which follows a decrease last year as well, is insurance carriers have had fewer workers compensation claims and are paying less for these claims. This is evidenced by the -12.2% change in loss experience and a change of -4.8% in trend,” the agency added.
The North Carolina Industrial Commission says the latest update from the rate bureau is yet more evidence the industrial commission is succeeding in its efforts to improve the state’s workers’ compensation system. The commission noted loss costs decreased 11.3% in 2017, 14.4% in 2016, and 10.2% in 2015.
Efforts by the Commission to control costs, particularly medical costs, were a significant factor in the decrease in loss costs, the agency said in a media release in early October. “The dramatic decreases in loss costs are a testament to the effectiveness of the needed reforms to the State’s workers’ compensation system,” says chairman Charlton Allen.
The agency cited research from the Workers’ Compensation Research Institute which shows indemnity costs per claim in North Carolina decreased from an average of $26,666 for 2009 claims evaluated in 2012 to an average of $24,675 for 2012 claims evaluated in 2015. The average period injured workers are out of work due to temporary disability has decreased from 24.6 weeks in 2009 to 21.2 weeks in 2012, for claims evaluated at an average of 36 months after the injury.
The commission adds reforms to the medical fee schedule are another factor in lowered costs. Payments for non-hospital providers decreased approximately 5% between 2015 and 2014 for claims at 12 months of experience. In the same period, payments to hospital outpatient providers decreased 24% while payments to inpatient hospital providers decreased 11%.