Rising hospital costs in the treatment of injured workers have received attention from public policymakers and system stakeholders in many states. To assist in better understanding these costs, this study compares hospital outpatient payments across states and monitors the impact of fee schedule reforms. The study also includes an additional benchmark comparing workers’ compensation hospital outpatient payments and Medicare rates. This helps states better understand their hospital payments since Medicare is one of the largest payors.

The hospital outpatient payment indices compare payments (per surgical episode) for common outpatient surgeries under workers’ compensation from state to state for each study year and the trends within each state from 2005 to 2015. The analysis of these comparisons focuses on the experience of states with different types of fee regulations. The analysis captures payments for services provided and billed by hospitals, and it excludes professional services billed by nonhospital medical providers (such as physicians, physical therapists, and chiropractors) and transactions for durable medical equipment and pharmaceuticals billed by providers other than hospitals. The analysis also excludes payments made to ambulatory surgery centers.

The 35 states included in this study are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. The study states are geographically diverse and represent a wide range of industries and a variety of regulation choices for hospital payments under workers’ compensation.

Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 6th Edition. Rui Yang and Olesya Fomenko. June 2017. WC-17-32.

Copyright: WCRI