The National Council on Compensation Insurance (NCCI) released a research brief titled “Medical Services and How They Contribute to the Cost of WC Claims” that looks into medical services by claim size (severity) and maturity to estimate and possibly project cost trends. The group had published data like this in 2011 and this new paper updates share of ultimate medical losses by service group and claim size range.

The major findings of the brief were that the mix of medical services varies by claim size. Ambulatory Surgical Centers (ASC)/Outpatient Hospital is the largest share of costs for claims less than $500,000. For claims with at least $500,000 in costs Inpatient Hospital is the largest share of costs. For claims over $1 million, “other service group’s” spike when it comes to share of costs. For all lost-time claims, ASC/Outpatient Hospital, Prescription Drugs, and Inpatient Hospital together accounted for almost 50% of medical losses.

They also found that overall medical payout rates and service group payout rates tended to decrease with claim size and the Prescription Drugs payout rate is always the slowest of all service groups within a given size. On average, 90% of ultimate medical costs are paid out by the fifth relative service year for claims less than $100,000. Just 55% of ultimate medical costs are paid out by the tenth year for claims of at least $1 million.

The mix of medical service group cost shares varies by claim maturity as well, in the first five service years ASC/Outpatient Hospital and Inpatient Hospital comprise the largest share of costs. Prescription Drugs are the largest of costs for claims less than $1 million past the fifth service year.

Read the research brief from NCCI here.

https://www.ncci.com/Articles/Pages/II_Insights-MedicalServicesWCClaims.aspx