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Work comp in North Carolina – lessons learned

WCRI has done it again.

Carol Telles‘ just-published report on the North Carolina work comp system should be required reading for anyone looking to understand why and how costs and care change in response to regulations.

A couple of items make the point…

  • Hospital costs were “among the highest of the states we studied” – despite fee schedule and other changes in 2009 and 2013. There was an 11% drop in 2013 in outpatient surgery payments however whether that’s sustainable is questionable (my interpretation, not Ms Telles’.)
  • NC’s work comp claimants receive the highest income benefit payments among all 17 CompScope states – because settlements are higher and disability durations are longer. (there were reforms in 2011, but we don’t know the impact yet)
  • From 2009/10 to 2013/14, total costs/claim didn’t change much at all – in contrast to 8% annual increases seed in the prior 6 years.
  • There has been substantial reform over the fast six years…

There’s a lot more detail in the report, including the finding that the main reason medical costs haven’t moved much since ’09 is a reduction in utilization – primarily for outpatient hospital services per claim.

One other notable finding; there was a dramatic increase – 21% – in reimbursement for evaluation and management services in 2013.  My take is paying docs to actually talk with and “evaluate” patients may help hold down medical costs, and help reduce the longer-than-average disability duration seen in the Tar Heel State as well.

What does this mean for you?

Reform can effectively mitigate cost drivers IF that reform targets specific factors influencing costs.  

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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