New Study Shows How Healthcare Delivery has Improved in the Texas Comp System
A new study by the Research and Evaluation Group at the Texas Department of Insurance measured essential indicators of the health care cost and utilization in the Texas workers’ compensation system since 2000. The primary purpose of the report was to provide system participants with a set of complete, general, and consistent data for monitoring and analyzing the trends in health care cost and utilization. The research study, Health Care Cost and Utilization in the Texas Workers’ Compensation System, 2000 – 2017, was published on the Division’s website on January 10, 2019.
The report contains a number of findings that indicate that the delivery of healthcare in the Texas system is helpful to injured workers and cost efficient to employers and insurers. Among the significant findings, the REG found:
In 2017 workers’ compensation health care networks treated 47 percent of all claims and accounted for 40 percent of the total health care cost. The average health care cost per claim in networks ($2,488) was 7 percent lower than that in non-network ($2,660).
Total professional cost decreased greatly between 2003 and 2008 coinciding with the changes in the 2003 professional services fee guideline. The revised Medical Fee Guideline of 2008 resulted in cost increases between 2008 and 2011; but total cost decreased by 19 percent since 2011.
The number of medical-only claims decreased by 25 percent since 2000. The number of lost-time claims fluctuated but resulted in an overall decrease of 39 percent between 2000 and 2017.
The use of N-drugs (drugs not recommended in the Official Disability Guidelines – Treatment in Workers’ Comp, Appendix A, ODG Workers’ Compensation Drug Formulary) decreased greatly after the implementation of the pharmacy closed formulary in 2011. In terms of total cost, Ndrugs accounted for 32 percent of all pharmacy costs for lost-time claims in 2011 but decreased to 6 percent in 2017. For medical-only claims, it decreased from 27 percent in 2011 to 4 percent in 2017.
After the pharmacy closed formulary was implemented, the total cost of analgesics- opioid drugs decreased by 67 percent among lost-time claims and by 77 percent among medical-only claims.
There were more than 18,000 compounded drug prescriptions in 2010, with a cost of $6 million that represented about 4 percent of the total pharmacy cost in 2010. In 2014, compounded drugs increased to over 21,000 prescriptions and a cost of $14 million (13 percent of the total pharmacy cost). However, compounded drugs decreased greatly in 2017 to about 5,000 prescriptions at a total cost of $2.5 million (about 3 percent of the total pharmacy cost). From the peak of 2014, compounded drug cost decreased by $11.6 million (82 percent).
The data used in the report consists of medical billing and payment data submitted by insurance carriers to the Texas Department of Insurance, Division of Workers’ Compensation, covering professional, hospital/institutional, dental, and pharmacy services. Claims are grouped as either ‘lost-time’ or ‘medical-only’ claims. Lost-time claims have more than seven days of lost time from work because of a work-related injury or illness and receive medical, as well as income benefits. Medical-only claims receive medical benefits, but not income benefits and have seven days or less of lost time.
Per Chapter 405 of the Texas Labor Code, the Workers’ Compensation Research and Evaluation Group at the Texas Department of Insurance is responsible for conducting professional studies and research on various system issues, including: the delivery of benefits; litigation and controversy related to workers’ compensation; insurance rates and rate-making procedures; rehabilitation and reemployment of injured employees; the quality and cost of medical benefits; employer participation in the workers’ compensation system; employment health and safety issues; and other matters relevant to the cost, quality, and operational effectiveness of the workers’ compensation system.
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