Hospital Outpatient Payments per Episode Higher and Growing Faster in States with Percent-of-Charge-Based Fee Regulations or No Fee Schedules, Finds New WCRI Study

Hospital outpatient payments were higher and growing faster in states with percent-of-charge-based fee regulations or no fee schedules, finds a new study from the Workers Compensation Research Institute (WCRI). The study is an annual series that compares hospital payments for a group of common outpatient surgeries in workers’ compensation across 35 states, representing 88 percent of the workers’ compensation benefits paid in the United States. This study also monitors the trends within each state from 2005 to 2015.

“Rising hospital costs have been a focus for public policymakers and system stakeholders in recent policy debates in many states,” said Ramona Tanabe, WCRI’s executive vice president and in-house counsel. “This study will help policymakers and stakeholders conduct more meaningful comparisons of hospital payments across states, as well as to monitor the hospital payment trends in relation to reforms of hospital outpatient fee regulations.”

The study, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 6th Edition, found that states with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules—37 to 151 percent higher than the median of the study states with fixed-amount fee schedules in 2015. States with no fee schedules also had higher hospital outpatient payments per episode—44 to 136 percent higher than the median of the study states with fixed-amount fee schedules in 2015. WCRI also found hospital outpatient payments per episode in most states with percent-of-charge-based fee regulations or no fee schedules grew faster than in states with fixed-amount fee schedules.

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