Medical Cost Trends in the Texas Workers Compensation System. Texas Department of Insurance Workers Compensation Research Group August 2004

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Medical Cost Trends in the Texas

Workers’ Compensation System

Texas Department of Insurance

Workers’ Compensation Research Group

August 2004

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Purpose of This Analysis

• To update the average medical cost per claim

for all injuries through injury year 2003,

one-year post injury; and

• To analyze the average medical cost per claim

for specific types of injuries through injury

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Data and Methods

• Data comes from Texas Workers’ Compensation Commission

(TWCC) medical database, as of April 2004.

• To ensure an “apples to apples” comparison, TDI grouped all

diagnoses into diagnostic “buckets” according to a

methodology prescribed by the American College of

Occupational and Environmental Medicine (ACOEM).

• Average medical costs per claim for “all injuries” were

calculated for injury years 1999-2003 at one-year post injury

to ensure that all claims included in the analysis have the same

claim maturity.

• Average medical costs for specific types of injuries were only

calculated for injury years 1999-2002 at one-year post injury

since diagnostic groupings may change once insurance carriers

have submitted all remaining medical data pertaining to 2003

and 2004 medical services to TWCC.

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Key Medical Cost Findings

for “All Injuries”

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Average Workers’ Compensation Medical Cost Per

Claim, All Injuries, Injury Years 1999-2003,

One-Year Post Injury

$2,288 $2,409 $2,758 $2,951 $3,078* $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002 Injury Year 2003

Source: Texas Workers’ Compensation Commission, Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. * Average medical cost estimates for injury year 2003 should be considered preliminary until insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to the Texas Workers’ Compensation Commission.

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Average Workers’ Compensation Medical Cost Per Claim,

All Injuries, Injury Years 1999-2003,

One-Year Post Injury

+4.3%*

$3,078*

2003*

+34.5%

Total medical cost increase

from injury years 1999 to 2003

+7.0%

$2,951

2002

+14.5%

$2,758

2001

+5.3%

$2,409

2000

$2,288

1999

Average Annual Increase in

Medical Costs

Average Medical Cost

Per Claim

Injury Year

Source: Texas Workers’ Compensation Commission, Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. * Average medical cost estimates for injury year 2003 should be considered preliminary until insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to the Texas Workers’ Compensation Commission.

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Key Medical Cost Findings for

Specific Types of Injuries

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Average Workers’ Compensation Medical Cost Per

Claim, Ankle and Foot Soft Tissue Injuries,

Injury Years 1999-2002, One-Year Post Injury

$1,313 $1,361 $1,619 $1,677 $0 $400 $800 $1,200 $1,600 $2,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Hand and Wrist Nerve Compression Injuries,

Injury Years 1999-2002, One-Year Post Injury

$4,618 $4,716 $5,632 $5,922 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Hand and Wrist Soft Tissue Injuries,

Injury Years 1999-2002, One-Year Post Injury

$1,710 $1,801 $2,336 $2,358 $0 $500 $1,000 $1,500 $2,000 $2,500

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Hand and Wrist Superficial Trauma,

Injury Years 1999-2002, One-Year Post Injury

$673 $669 $783 $893 $0 $200 $400 $600 $800 $1,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Knee Internal Derangement Injuries,

Injury Years 1999-2002, One-Year Post Injury

$4,573 $4,484 $5,112 $5,621 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Low Back Nerve Compression Injuries,

Injury Years 1999-2002, One-Year Post Injury

$9,260 $9,783 $10,760 $12,477 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Low Back Soft Tissue Injuries,

Injury Years 1999-2002, One-Year Post Injury

$3,223 $3,507 $3,976 $4,236 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Multiple Body Parts Soft Tissue Injuries,

Injury Years 1999-2002, One-Year Post Injury

$2,153 $2,317 $2,644 $2,905 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Neck Soft Tissue Injuries,

Injury Years 1999-2002, One-Year Post Injury

$4,378 $4,575 $5,053 $5,332 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, Shoulder Soft Tissue Injuries,

Injury Years 1999-2002, One-Year Post Injury

$3,788 $4,113 $4,775 $5,221 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Average Workers’ Compensation Medical Cost Per

Claim, All Other Injuries, Injury Years 1999-2002,

One-Year Post Injury

$2,860 $2,899 $3,353 $3,574 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000

Injury Year 1999 Injury Year 2000 Injury Year 2001 Injury Year 2002

Source: Texas Workers’ Compensation Commission (TWCC), Medforms database, as of April 2004 and the Texas Department of Insurance, Workers’ Compensation Research Group, August 2004.

Note: Average medical costs per claim do not include pharmacy costs. Average medical cost estimates for injury year 2003 are not included because diagnostic groupings may change once insurance carriers have submitted all remaining medical data pertaining to 2003 and 2004 medical services to TWCC.

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Summary

• Based on the most recent TWCC medical data analyzed by TDI, the

average medical cost per claim has increased approximately 35 percent

from injury year 1999 to 2003, one-year post injury.

• This re-affirms the findings presented previously to this committee that

medical costs per claim continue to be high.

• After analyzing the average annual increases in medical costs per claim, it

appears that for injury years 2002 and 2003, there may be a trend towards

reductions in workers’ compensation medical cost inflation. TDI will

continue to monitor these numbers as new data are submitted to TWCC.

• The possible reasons for those reductions in medical cost inflation have not

yet been quantified, however they may be the result of stricter utilization

review practices by insurance carriers, stricter insurance carrier reviews of

claim compensability, and reductions in the TWCC Medical Fee Guideline

(effective August 1, 2003).

Figure

Updating...

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