Study Shows: Calif. Worker’s Comp Medical Payments Back to Pre-Reform Levels

Many of us remember all to well the upheaval we experienced with workman’s compensation policy premiums back in early 2000 before the 2003 reform. Rates went through the roof and carriers were leaving the state in droves. I can remember the relief we experience when our workman’s compensation packages began to significantly improve in 2005 and some of our contractors showed savings as high as 20%-40% in premium.

A recent study published in one of industry trade magazines, Insurance Journal, shows that medical payouts are beginning to creep back up to pre-reform levels which could begin to effect workman’s compensation Premiums. The quote below summarizes some of the issues:

To measure how various medical components have contributed to the recent increases in medical expenditures, the study also examined the growth in average amounts paid for treatment, pharmacy/DME, medical management and med-legal reports at 12 and 24 months post injury. Again, looking at first-year payments on lost-time claims, the study found that since hitting their post-reform lows:

  • average amounts paid per claim for treatment have increased 41 percent; average amounts paid pharmaceuticals and DME are up 69           percent;
  • average amounts paid for med-legal reports are up 79 percent; and
  • average amounts paid for medical cost containment are up 86 percent.

With the ongoing challenges in the worker’s compensation insurance market, having a thorough and proactive approach to lowering your premium is critical. If you haven’t already, make sure you download my free ebook that discusses 24 ways you can lower your worker’s compensation insurance.

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