Fixed-amount fee schedules create slower increases in comp costs: Report

Hospital outpatient payments are lower and growing slower in states with fixed-amount workers compensation fee schedules, according to a new study by the Cambridge, Massachusetts-based Workers Compensation Research Institute.

Researchers compared hospital payments for a group of common outpatient surgeries for injured workers in 36 states from 2005 to 2021.

The data revealed that hospital payments per outpatient surgical episode in states with percent-of-charge-based fee regulations were 81% to 190% higher than the median of the study states with fixed-amount fee schedules in 2021. In states with no fee schedules, they were 70% to 138% higher.

The growth in hospital outpatient payments per episode among non-fee schedule states ranged from 42% in Arizona to 72% in New Jersey, while the payments in the median fixed-amount fee schedule state without “substantial” changes in fee-schedule regulations increased 14% from 2011 to 2021.