North Carolina’s Hospital Costs

Hospital costs per workers’ compensation claim in North Carolina were higher than most states in 2012 in the wake of attempts to control their costs, according to a 2014 study by the Workers Compensation Research Institute (WCRI).

The report looked at medical costs between 2007 and 2012, a period that includes a 2009 reduction in the state’s hospital fee schedule for outpatient care. It compared results with 15 other states.

Overall, North Carolina’s medical payments per claim were typical, but there were differences by provider. Hospital costs per claim were among the highest of states WCRI studied. Non-hospital costs, on the other hand, were slightly lower than the typical state, driven by lower prices paid.

North Carolina tackled hospital costs in 2009 by reducing the hospital outpatient reimbursement rate for most hospitals to 79 percent of charges, down from 95 percent. Other WCRI research indicates states with no fee schedule or, like North Carolina, with a charge-based schedule, had higher hospital outpatient costs per surgical episode than states with fixed fee schedules.

North Carolina enacted more changes in 2013, freezing charges for inpatient and outpatient services, then cutting rates between 10 and 15 percent. Further, legislation passed in 2013 required hospital reimbursement to be based on Medicare, but no changes have been enacted yet.

The WCRI study took place before the 2013 changes to hospital reimbursement could have had any effect. Researchers stated they observed an increase in prices paid for office visits and physical medicine services in 2013, following fee schedule changes which took effect Jan. 1, 2013.