Self-Interested Physicians Drive Up Workers Comp Costs in Some States
A study of three states conducted by the Workers Comp Research Institute revealed that high mark-ups for physicians and physician-dispensed drugs was largely responsible for increases in workers comp costs.
The study looked at workers comp costs in Maryland, Pennsylvania, and Georgia. In both Maryland and Pennsylvania, lawmakers unsuccessfully attempted to curb physician dispensing of pharmaceuticals for workers comp insurance; in Maryland, 40% of prescriptions for workers comp claimants came from physicians, while in Pennsylvania, 23% of those prescriptions were filled by physicians. Although workers comp programs in both states recognize the importance of prescriptions for those injured on the job, the physicians themselves mark the cost up significantly, which can cause workers comp premiums to rise.
According to WCRI research, the mark-up for physician-prescribed drugs was as much as 667%, compared to filling the prescription at a pharmacy.
“The markups are just ridiculously high,” said WCRI economist Dongchun Wang. “I guess this is just how some physicians play the system.”
Since April 2011, Georgia workers comp legislation restricted restricted physician dispensing, as well as the cost of prescriptions themselves. Almost a year after the reform, the markup cost decreased 75% for commonly-prescribed drugs, so that physicians were competitive with pharmacies.
In Other States, High-Performing Physicians Reduce Workers Comp Costs
While some physicians overcharge workers comp for prescriptions and other services, in other states, high-performing physicians can reduce medical costs, including for workers comp, by as much as 20%.
The 2014 Harbor Health Systems’ Medical Director Meeting in California focused on questions of the best practices for doctors involved with workers comp patients.
“We are truly at a tipping point in transforming care for injured workers by improving outcomes, lowering costs and getting these employees back to work quickly,” said Gregory Moore, M.P.H., President and CEO of Harbor Health Systems. “We have the technology to measure case outcomes by physician, the ability to get injured workers to see these physicians quickly, and the systems to keep the care plan on track for a fast and safe recovery. Regulatory initiatives like CA SB863 make it possible for employers to use these high-performing physicians without the burdens of compliance and administration.”
Previous studies of effective, high-performing doctors showed that workers comp claimants spent less time on workers comp benefits with focused, high-quality treatment.
If states can lower workers comp costs for employers, while still providing high-quality treatment for employees injured on the job, then fewer workers comp claims may be denied.
The Strom Law Firm Understands Worker’s Comp Legislation
The South Carolina workers’ comp lawyers at The Strom Law Firm, LLC proudly seek justice on behalf of employees injured or killed on the job who work for private companies, as well as employees working for local county, city, and state government. We are licensed to practice throughout South Carolina, as well as Georgia and New York. If you are confused about worker’s comp laws, or have had your worker’s comp claim denied, contact us. We offer free consultations to discuss the facts of your case. 803.252.4800.