Hospital Outpatient Payments Higher and Growing Faster in Most States with Charge-Based Fee Regulations or No Fee Schedules, Finds WCRI Study
Cambridge, MA (WorkersCompensation.com) - The Workers Compensation Research Institute (WCRI) released a new study, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 10th Edition, which compares hospital payments for a group of common outpatient surgeries in workers' compensation across 36 states from 2005 to 2019.
“Rising hospital outpatient costs have been a focus for public policymakers and system stakeholders in recent policy debates in many states,” said Ramona Tanabe, WCRI's executive vice president and counsel. “The study provides meaningful comparisons of hospital outpatient payments across states, as well as hospital payment trends in relation to reforms of hospital outpatient fee regulations.”
The following is a sample of the study's findings:
Hospital payments per outpatient surgical episode in states with percent-of-charge-based fee regulations were 73 to 209 percent higher than the median of the study states with fixed-amount fee schedules in 2019. In states with no fee schedules, they were 61 to 130 percent higher.
Growth in hospital outpatient payments per episode among non-fee schedule states ranged from 25 percent in Iowa to 54 percent in Missouri, while the payments in the median fixed-amount fee schedule state without substantial changes in regulations increased about 4 percent from 2011 to 2019.
Variation between average workers' compensation payments and Medicare rates for a common group of procedures across states ranged from a low of 38 percent (or $2,294) below Medicare in Nevada to a high of 502 percent (or $24,758) above Medicare in Alabama.
Payments for services provided and billed by hospitals are captured in this study. Professional services billed by nonhospital medical providers (e.g., physicians, physical therapists, and chiropractors), transactions for durable medical equipment and pharmaceuticals billed by providers other than hospitals, and payments made to ambulatory surgery centers are excluded. The study also provides an analysis of major policy changes in states with recent fee schedule reforms.
The study covers 36 large states that represent 88 percent of the workers' compensation benefits paid in the United States. These states are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.