Several states experienced faster growth in prices paid for workers’ compensation medical professional services from 2021 to 2024 compared with earlier years, according to this year’s Workers Compensation Research Institute’s (WCRI) “Medical Price Index for Workers’ Compensation, 17th Edition” (MPI-WC). The annual study, which creates an index of the prices paid for professional services based on a selection of the most used services for treating workers with injuries, indicates that “26 of the 36 study states had price increases in excess of 5% over this three-year period, and 12 states experienced double-digit price growth.
State Comparisons
“Prices paid for a similar set of professionals services varied significantly across states, ranging from 33% below the 36-state median in Florida to 172% above the 36-state median in Wisconsin in 2024,” states the report. “States with no fee schedules for professional services had higher prices paid compared with states with fee schedules—35% to 177% higher than the median of the study states with fee schedules in 2024.” As of 2024, there were six states without fee schedules for professional services: Indiana, Iowa, Missouri, New Hampshire, New Jersey, and Wisconsin. Among these states, prices paid in Wisconsin were almost three times higher than the median of the study states with fee schedules and 82% higher than the median of the study states without fee schedules, according to the report.
Time Trends Across States
“Growth in prices paid for professional services exhibited large variation across states, spanning from 1% in Connecticut to 75% in Wisconsin over the time period from 2008 to 2024,” the report explains. “Most states with no fee schedules experienced faster growth in prices paid for professional services compared with states with fee schedules.” Of the 21 study states with no major fee schedule changes from 2008 to 2024, and the five states without fee schedules, the median growth rate among the non-fee schedule states was 40% within the 17-year period, compared with the median growth rate of 15% among the fee schedule states. Furthermore, “the median increase in prices paid among non-fee schedule states was 2.1% per year, while the typical annual growth rate in prices paid among fee schedule states was 0.9% per year.”
Missouri and Wisconsin had the fastest growth from among the five non-fee schedule states, with overall prices increasing by 65% and 76%, respectively, during the 17-year period. Meanwhile, price growth in the other three non-fee schedule states ranged from 29-40% overall. The study found “a negative correlation between growth in network participation rates and increases in professional prices among the non-fee schedule states, indicating that network discounts typically help contain price growth.” The three states with slower price growth had larger increases in network participation rates compared with the two non-fee schedule states with faster price growth, states the study.
Findings From States With Substantial Price Changes
“Eight study states (Arizona, Illinois, Kentucky, Massachusetts, New York, North Carolina, Texas, and Virginia) had substantial changes (i.e., an increase or a decrease of 10% or more) in overall prices paid following major fee schedule changes during the study period,” states the report. “Many study states had substantial price changes at the service-type level that did not translate into material changes in overall prices. Among these states, Arizona, California, and Colorado had major changes in the basis of their fee schedules that resulted in substantial changes in prices paid for different types of services.”
There was a substantial growth in prices for evaluation and management across several states starting in 2021 after the fee schedule increase by the Centers for Medicare & Medicaid Services (CMS) and the revisions to the evaluation and management (E/M) coding guidelines by the American Medical Association (AMA), according to the report. Some states, for instance, experienced price increases due to higher reimbursement rates for certain services, while others saw price reductions, states the report.
The effects of the fee schedule changes varied by state, depending on the specific nature of reforms implemented—variations which were influenced by the scope of services offered, the magnitude of rate adjustments, and the methods used to update fee schedules.