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WCRI

Medical Payments Remain Lower in NC

Medical payments per claim in North Carolina were lower than typical in the 17 states compared in WCRI’s recent update of medical benchmarks in North Carolina. For 2022 claims at an average of 12 months of experience, the average medical payment per claim in North Carolina was 33 percent lower than in the 17-state median, and 31 percent lower for 2019 claims at the 36-month maturity. 

The results are from CompScope Medical Benchmarks for North Carolina by Carol Telles, 25th edition. The latest edition is one of an annual series of analyses by WCRI that benchmarks the performance of North Carolina workers’ compensation system with 16 states. The study focused on costs, prices, and utilization of medical care, and examines these medical services in the aggregate, by type of provider, and by type of medical service.

Other states in the study include Arkansas, California, Florida, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. Based in Massachusetts, the Workers Compensation Research Institute is an independent, not-for-profit research organization.

WCRI found for 2022 claims at 12 months of experience, at an average of about $10,000 medical payments per claim were 33 percent lower in North Carolina than the median of the 17 states in the study (at roughly $15,000). Similarly, for 2019 claims at 36 months of experience, medical costs per claim were 31 percent lower in North Carolina ($13,400 versus $19,500 in the median state).

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A breakdown by components indicates payments were lower in North Carolina than typical for both nonhospital and hospital outpatient care. For nonhospital services, prices paid and utilization were fairly close to the median state. However, ASC facility payments were 28 percent lower in North Carolina than typical, contributing to the lower nonhospital payments.

WCRI credits the state's adoption of a Medicare-based fee schedule for restraining cost. Following the change, which went into effect beginning in 2015, medical payments decreased rapidly for both outpatient and inpatient care. For example, hospital outpatient payment decreased by 25 percent from 2014 to 2015, 9 percent in 2016, and 4 percent in 2017.

“As a result of these changes, hospital outpatient payments per claim in North Carolina were lower than typical among the states in 2022 (adjusted for injury/industry mix). Prior to 2013, hospital outpatient payments per claim were higher in North Carolina than in most study states,” the study concludes.

WCRI says the COVID-19 pandemic has also been a factor in restraining medical costs. Drops in utilization contributed to a decrease or stability in nearly all study states from 2019 to 2021. In 2022, however, medical payments per claim increased in more than half of the states.