May 16, 2019 by WorkCompWire

Cambridge, MA – The average total cost of a workers’ compensation claim in California remained stable since the enactment of comprehensive reforms six years ago, but results mask recent changes in key cost components, according to a recent study by the Workers Compensation Research Institute (WCRI).

Medical payments per claim increased annually for the first time since reforms were enacted in 2013, while indemnity benefits remained stable in the latest 12- and 24-month valuations after annual growth since 2013. Benefit delivery expenses per claim decreased in the most recent 24-month valuation after a period of stability.

“The changes in 2016 and 2017 claims in medical, indemnity, expenses, and many of their key components may indicate the beginning of a new pattern after the previous trends from reforms ended,” said Ramona Tanabe, executive vice president and counsel of WCRI.

Senate Bill 863 took effect in 2013 and was designed to increase permanent disability benefits for injured workers while also creating cost savings and improving the efficiency of the workers’ compensation process, where possible.

The study, CompScope™ Benchmarks for California, 19th Edition, compared California with workers’ compensation systems in 17 other states. For the study, WCRI analyzed workers’ compensation claims with experience through March 2018.

The following are among the study’s other findings:

  • California had higher litigation expenses — the frequency of and payments per claim for both medical-legal services and defense attorneys in California were higher than most study states.
  • Total costs per all paid claims in California were higher than most study states for 2015 claims with an average of 36 months of experience, mainly driven by a higher percentage of claims with more than seven days of lost time.

To learn more or purchase a copy: WCRI: CompScope™ Benchmarks for California, 19th Edition.

Source: WCRI