The cost of physical medicine was the biggest driver of annual physician cost increases in workers’ compensation over the past decade, according to a new report from the National Council on Compensation Insurance.
The report, titled “Inflation and Workers Compensation Medical Costs – Physician Services,” was released Tuesday by Boca Raton, Fla.-based NCCI and is the third installment in a planned four-part series examining inflation and medical costs.
Among the report’s highlights was the modest increase in the average physician-paid cost per claim, which rose about 1.5% annually. Overall, between 2012 and 2021, average annual physician payments increased by about 15%.
Growth in average physician payments was about the same across regions of the country, with the Northeast United States experiencing the slowest growth and the Midwest experiencing the fastest growth.
The Midwest is home to some states that do not have scheduled medical fees for physician services. There are only six such states in the nation.
Physician costs in the western United States, as well as the southeastern and northeastern parts of the country, all increased at a slower rate than the national average, according to the report.
The main driver of growth in all regions of the United States was the pricing of physician services.
NCCI researchers say that payments for physician services make up about 40% of all comp medical costs.
Physician services were divided into various categories, including physical medicine, evaluation and management, surgery, radiology, and others.
While physical medicine costs increased, surgery and radiology costs decreased.