The State of the Alaska Workers Compensation System
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1 The State of the Alaska Workers Compensation System October 10, 2013
2 Prepared by the Alaska Department of Labor and Workforce Development The Good News...
3 Alaska Department of Labor Research and Analysis Prepared by the Alaska Department of Labor and Workforce Development
4 40,000 Alaska Injury Frequency Number of Injuries Reported 35,000 30,000 25,000 20,000 15, Workers Compensation Annual Report Prepared by the Alaska Department of Labor and Workforce Development
5 Prepared by the Alaska Department of Labor and Workforce Development The Bad News...
6 Total Compensation Payments 300,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, Workers Compensation Annual Report Prepared by the Alaska Department of Labor and Workforce Development
7 How do Alaska s Premium Rates Compare? Source: 2012 Premium Rate Ranking, State of Oregon, Department of Consumer and Business Services,
8 Prepared by the Alaska Department of Labor and Workforce Development
9 O Calendar Year th in the nation O Calendar Year th in the nation O Calendar Year nd in the nation O Calendar Year st in the nation O Calendar Year st in the nation O Calendar Year nd in the nation O Calendar Year st in the nation What s Driving Premium Costs?
10 Cost Drivers O Medical Costs O Indemnity Costs O Legal Costs O Reemployment Costs
11 Source: Division of Workers Compensation 2011 Annual Report
12 Source: Division of Workers Compensation 2011 Annual Report
13 Source: NCCI 2012 State Advisory Forum
14 Medical Cost Components O Fees for Services O Utilization O Prescription Drug Use Use of opioid narcotics Physician Dispensing
15 Medical Costs O Fees for Services Prepared by the Alaska Department of Labor and Workforce Development
16 ` Source: Alaska Workers Compensation Division 2012 Annual Report
17 Medical Cost Changes Source: Alaska Workers Compensation Division 2012 Annual Report
18 Source: NCCI 2012 State Advisory Forum
19 Source: NCCI 2014 Rate Filing
20 Source: WCRI Designing Workers Compensation Medical Fee Schedules June 2012
21 Impact of Fee Schedule Adopted October 5, 2011 CHANGE FROM 2004 Fee Schedule EVALUATION 16.81% & MANAGEMENT SURGERY 19.08% RADIOLOGY 47.06% PATHOLOGY 5.83% DME 24.86% ANESTHESIOLOGY 13.15% OUTPATIENT 56.43% INPATIENT % INPATIENT ICU 99.99%
22 Source: WCRI: A New Benchmark for Workers Compensation Fee Schedules: Prices Paid by Commercial Insurers June 2013
23 Source: WCRI: Comparing Workers Compensation and Group Health Hospital Outpatient Payments June 2013
24 Top 25 Surgery Procedure Codes Ranked by Paid Amounts for Alaska (47% of total payments) Rank Procedure Code Description AK WC Fee Schedule Medicare Fee Washington WC Fee AK Average Healthcare Arthroscopy Knee w/ Meniscus Repair $ 5, $ $ $ 2, Repair of Rotator Cuff $ 7, $ 1, $ 1, $ 3, Arthroscopy shoulder surgical w/decompres $ 5, $ $ $ Laminotomy w/ decompression $ 10, $ 1, $ 1, $ 4, Arthroscopy shoulder surgical; labral tear $ 6, $ 1, $ 1, $ 4, Arthroscopic ligament repair $ 8, $ 1, $ 1, $ 4, Injection anesthetic agent/steroid epidural $ 2, $ $ $ 1, Arthroscopy knee surgical; with meniscectom$ 5, $ $ $ 2, Arthrodesis anterior interbody; cervical $ 13, $ 2, $ 2, $ 7, Tenodesis of tendon $ 5, $ $ 1, $ 3, Injection of diagnostic/therapeutic substanc $ 1, $ $ $ Claviculectomy; partial $ 2, $ $ $ 2, Arthrodesis posterior; lumbar $ 12, $ 1, $ 2, $ 7, Arthroscopy shoulder surgical w/cuff repair $ 7, $ 1, $ 1, $ 5, Arthroscopy w/debridement $ 4, $ $ 1, $ 2, Arthroscopy shoulder surgical; capsulorrhaph $ 6, $ 1, $ 1, $ 4, Repair initial inguinal hernia $ 3, $ $ $ 2, Injection anesthetic agent; brachial plexus $ 1, $ $ $ Neuroplasty and/or transposition $ 5, $ $ $ 1, Arthroscopy shoulder surgical; debridement $ 4, $ $ $ 2, Arthrocentesis aspiration and/or injection $ $ $ $ Reconstruction of complete shoulder $ 9, $ 1, $ 1, $ 4, Percutaneous implantation of neurostimulat $ 6, $ n/a $ 2, Simple repair of superficial wounds $ $ $ $ Laminotomy with decompression $ 11, $ 1, $ 2, $ 6,040.11
25 Source: NCCI: Price Impact of Workers Compensation Physician Fee Schedules: Preliminary Results Annual Issues Symposium - May 2013
26 Medical Costs O Utilization Prepared by the Alaska Department of Labor and Workforce Development
27 Source: NCCI 2011 State Advisory Forum
28 Interstate Variations in Utilization of Workers Compensation Medical Care Workers Compensation Research Institute February 2013 Prepared by the Alaska Department of Labor and Workforce Development
29 Interstate Variations in Utilization of Workers Compensation Medical Care Workers Compensation Research Institute February 2013 Prepared by the Alaska Department of Labor and Workforce Development
30 Impact of Medical Treatment Guidelines Dr. Thomas Wickizer, College of Public Health, Ohio State University February 2013 Prepared by the Alaska Department of Labor and Workforce Development
31 Impact of Medical Treatment Guidelines Study of Eastern Washington Center of Occupational Health & Education (COHE) Dr. Thomas Wickizer, College of Public Health, Ohio State University February 2013 Prepared by the Alaska Department of Labor and Workforce Development
32 Medical Costs O Prescription Drug Use Use of opioid narcotics Physician Dispensing Prepared by the Alaska Department of Labor and Workforce Development
33 Source: NCCI 2011 State Advisory Forum
34 Opioids: The Problem and the Urgency Dr. Karin Mack, Centers for Disease Control February 2013 Prepared by the Alaska Department of Labor and Workforce Development
35 NCCI Report on Opioid Use November 2011 Prepared by the Alaska Department of Labor and Workforce Development
36 Opioids in Workers Compensation Workers Compensation Research Institute February 2013 Prepared by the Alaska Department of Labor and Workforce Development
37 State Legislatures Consider Drug Issues National Council on Compensation Insurance August 2013 Prepared by the Alaska Department of Labor and Workforce Development
38 Workers Compensation Prescription Drug Study NCCI 2013 Annual Issues Symposium May 2013 Prepared by the Alaska Department of Labor and Workforce Development
39 Source: NCCI 2011 State Advisory Forum
40 Workers Compensation Prescription Drug Study NCCI 2013 Annual Issues Symposium May 2013 Prepared by the Alaska Department of Labor and Workforce Development
41 State Legislatures Consider Drug Issues National Council on Compensation Insurance August 2013 Prepared by the Alaska Department of Labor and Workforce Development
42 Recommendations O Legislative History O Best Practice Recommendations Prepared by the Alaska Department of Labor and Workforce Development
43 O 2004 O O O O Legislative History Medical fees payable at 90 percentile UCR 2005 SB130 Froze medical fees at 2004 fee schedule Sunset 2004 fee schedule effective 12/30/10 Established Workers Compensation Task Force Established Workers Compensation Medical Services Review Committee 2007 HB228 Increased 2004 fee schedule by 8.4% 2009 HB104 Increased 2004 fee schedule by another 8.9% 2011 HB13 Establish new medical fee schedule at 90 percentile UCR
44 Workers Compensation Task Force Recommendations O Discontinue medical fee schedule based on UCR. O The Legislature work with Administration to improve medical cost data collection. O Adopt legislation restricting the over-use of opioid narcotics.
45 Workers Compensation Medical Services Review Committee Recommendations O Switch from a UCR based fee schedule to a resource based relative value scale (RBRVS) fee schedule for physicians. O Implement separate conversion factors for medical practice areas. O Base hospital fees on MS diagnosis related group (DRG) codes. O Base fees for ambulatory surgical centers on ambulatory payment classification (APC) rates.
46 Workers Compensation Medical Services Review Committee Recommendations O Implement treatment guidelines. O Improve data collection on medical costs, including collection of group health cost data. O Contract with an independent research organization to study the effects of recommended changes.
47 Workers Compensation Board Recommendations O Revise fee schedule methodology from UCR to RBRVS for physician, APC for outpatient, and DRG for hospital. O Revise prescription drug formulary. O Regulate physician dispensing O Regulate use of opioid narcotics.
48 Questions? A copy of this presentation is available online at Prepared by the Alaska Department of Labor and Workforce Development
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