Corpus Christi, TX

Employer Health Register

WORKERS’ COMP COST DATA ADDED TO ODG

Work Loss Data Institute announces the incorporation of detailed workers’ compensation cost information in the Official Disability Guidelines.

  ODG now has information on indemnity costs, medical costs and total costs per claim for over 2000 ICD9 diagnosis codes seen in workers’ comp. Within each cost category ODG shows the cost distribution by quartile (25%, 50%, and 75%), the median costs, the mean (or average) costs, and the percentage of claims with no costs in that category.  Also provided is the total number of claims that the cost data is based on for each ICD9 code. 

The workers’ compensation cost data is based on almost 2 million claims from WLDI’s multi-year multi-state workers comp database, and it covers almost 50 million paid invoices on medical encounters for those claims.  The medical costs cover multiple cost categories, including office visits, surgeries, physical therapy, hospital costs, pharmaceuticals, durable medical equipment, and more.  When there are multiple ICD9 diagnostic categories in a claim, all of the costs for that claim are assigned to the most severe ICD9 code, using the ODG disability duration database to identify the most severe ICD9 code.  These medical costs represent a total of $10.0 billion dollars in actual incurred costs, and the indemnity costs represent a total of $7.2 billion dollars in actual incurred costs, for a total of over $17 billion of workers’ compensation costs.

Workers’ Compensation insurance companies, self-insured employers, and third-party administrators have requested this information because it can play a critical role in their efforts to improve outcomes by reserving claims, triaging, managing claims, and benchmarking.  Having upfront information by quartile for both indemnity and medical costs eases the reserving process, so that payors can be sure sufficient funds are available to fulfill future obligations under the claim.  These numbers can also be used for triaging claims.  For example, claims with expected costs over a certain amount may be routed to special teams of medical reviewers.  In addition, the relationship among the different cost measurements can also be used to triage claims.  For example, when the costs at the 75% level are more than three times the cost at the 50% level, this indicates that there is a great deal of variability in costs, and the claim may warrant attention even if the average costs are not high.  Some users also look at the ratio of the mean costs to the median costs, because when this is over four, this also indicates a great deal of variability, with many claims likely to become outliers.  Finally, the actual outcome data can be used both for the prospective management of claims and for the retrospective benchmarking of claim performance.

According to Patricia Whelan, Publisher of Work Loss Data Institute, “This level of workers’ comp cost information has never been readily available in the past, but many of our clients have requested it.  This new feature is one more enhancement that sets Official Disability Guidelines apart from all other resources used to improve outcomes in workers’ compensation.  The strength of ODG is its ability to provide valuable in-depth data in a format that makes it easier for subscribers to do their jobs.”

The new table, entitled “Workers' Comp Costs per Claim,” is available immediately to online subscribers of ODG Treatment in Workers’ Comp and Official Disability Guidelines (ODG) and will also be included in the 2007 editions of the hard-copy books.

Evidence-based, independent and easy to use, the complete ODG Treatment in Workers’ Comp is available for $325 on the Web or in textbook format, with multi-user discounts available.  The Official Disability Guidelines (without the treatment guidelines) is available alone at the cost of $195.  Raw data files for integration with internal software applications or for computer-automated benchmarking are also available.  Contact WLDI regarding licensing fees.