Tennessee Cuts Workers’ Comp Costs

The implementation of a medical fee schedule in Tennessee after reforms passed in 2004 has helped save employers $1,300 per workers’ compensation case, according to a research group.

A study by the Workers Compensation Research Institute (WCRI) indicates that in 2006 and 2007, or 18 months post-fee schedule, Tennessee’s employers paid on average $1,300 less for medical cost per case compared to the pre-reform years.

The study, Monitoring the Impact of the Tennessee Fee Schedules: CompScope Medical Benchmarks, reflects the impact of the new fee schedule that addressed fees for a wide range of services provided by physicians, chiropractors, physical/occupational therapists, hospitals, and outpatient ambulatory surgery centers.

Although fee schedule rates were on average relatively higher in Tennessee compared to many other states, the introduction of the fee schedule led to a significant drop in the average prices paid to non-hospital providers.

For example, in 2006, prices paid for major surgery decreased 9 percent, major radiology decreased five percent, and X rays, 15 percent.

For outpatient services, the average payment per service for physical medicine services decreased 23 percent.

The study says that having such substantial changes in prices paid might lead to changes in utilization of medical services.