Outpatient Costs Higher in States Without Fee Schedules, Study Shows

Outpatient hospital costs in states without fee schedules are 27-73 percent higher than states with fee schedules, according to a report by the Workers Compensation Research Institute.

The study measured hospital outpatient and ASC costs paid over a seven-year period from 2003-2009, before Illinois adopted worker's compensation reform. Illinois had the highest costs among the 17 states compared and was 45 percent above the median study state.

The researchers focused on services associated with the most common surgeries performed in worker's comp cases, such as diagnostic conditions of the knee and shoulder. The states analyzed were California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin, which represent 60 percent of worker's comp benefits paid in the U.S.

Massachusetts had the lowest costs and was 60 percent lower than the median. Five states had no fee schedule regulation as of 2009, and four had fee schedule regulations based on percent of charges.

The study found that with the exception of Illinois, states with per procedure based or APC-based fee schedules had lower costs.

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