Though workers’ comp claims frequency is declining, a recently released California hospital report indicates claim severity is on the rise. Obtaining data from 35 hospitals and individual facilities, the Milliman and Keenan Healthcare report sourced more than 3,500 claims for review.

Trends identified in the report:

  • A decline in indemnity and medical-only claims, with ALAE costs playing an increasing role in overall claims costs in recent years. More specifically:
    • Higher average costs per indemnity for workers over 30.
    • Lesser average severity of indemnity claims in workers 30 and younger, with payments more likely to be incurred as age increases.
  • Over the 10-year period ending in 2014, overall losses per $100 of payroll have remained flat. This cumulative effect is believed due to reform laws enacted during this time, as identified in the report:
    • 2005-2014: Severity per indemnity claim (indemnity, medical, and allocated loss adjustment) rises almost 5.5%.
    • 2003-2004: Drop in claim severity (reform laws enacted during this time).
    • 2003-2008: Indemnity claim frequency declines dramatically.
  • Costs per indemnity claim for 2014 accidents has decreased approximately 10% from the previous year.
  • Litigated claims showed a significantly higher average claim severity. They contributed to 20% of total claims with indemnity payment, and account for approximately 54% of total incurred losses.
  • Cost projections for 2015: $2.20 loss cost per $100 of payroll.

A Balanced Approach to Medical Cost Containment

In California’s complex and ever-changing workers’ comp environment, informed decision-making is essential to safeguarding results. At ANS, we pride ourselves at staying at the forefront of (legal and technological) industry changes to ensure the best possible outcomes for both our clients and injured workers.ANS’s three-staged Pharmacotherapy Review Program ensures economically balanced and appropriate treatment options for injured workers. Our legal nurse experts excel at presenting actionable treatment modification recommendations in clear, written proposals for treating physicians, including recommendations such as:

  • Consolidation and coordination of drug therapies between multiple prescribers.
  • Consideration of alternate therapies.
  • Specification of weaning programs for over-prescribed narcotics.
  • Use of generics where applicable.

The end result? A cost effective treatment regimen that simultaneously enhances the quality of care for injured workers. Discover more about this advanced and comprehensive treatment strategy. Contact today.