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Texas’ work comp reforms – quick takes

WCRI just released an assessment of the results of work comp reform in Texas, and – generally speaking – they are pretty positive.

Here are a few highlights; the complete report can be purchased here.

  • Costs per claim dropped 4 percent in 2010, driven by a 6 percent decrease in temporary disability duration and 2 percent decline in medical payments.
  • While WCRI’s research indicated most states’ costs declined or were stable, Texas’ dropped “more than most.”
  • Prices for non-hospital services increased after January 1, 2011 – likely driven by the elimination of so-called “voluntary networks”.
  • The growth in employment in the Lone Star State likely helped keep costs down.
  • Medical cost containment expense trend declined in 2010, however costs are still high at $3600 per claims.  Looks like the increased volume of UR post-2006 was a significant contributor to those costs.

It’s too early to tell how much of an impact will result from the changes in opioid prescribing (driven by the closed formulary), but I’d bet we’ll see lower medical costs and a significant decrease in temporary disability as well.  However, the real impact will not be felt for some time – and that will be a reduction in permanent disability.

What does this mean for you?

Macro factors – e.g. the improving economy – significantly affect workers comp.

Reforms can drive better results.  They can also increase some costs – as we’ve seen in Texas with UR.

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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