Skip to content

State of the States May 12, 2023

medical costs

NCCI labels the workers’ compensation market as “healthy.”

NationalThe National Council on Compensation Insurance (NCCI) believes that the workers’ compensation market is currently “healthy.” Although property/casualty insurance saw losses in 2022, workers’ compensation continues to be the most profitable line with a nationwide redundancy level of 17 billion. However, concerns regarding medical costs are worrying some carriers. Specifically, the cost of medical supplies is garnering attention which includes home health, nursing, and skilled transportation costs. These services experienced increases of over 5 percent and can be a “major driver” in large claims. Medical imaging services are also considered a cost driver by insurers. 


Workers’ compensation premiums return to pre-pandemic levels.

NationalWorkers’ Compensation premiums returned to pre-pandemic levels with an 11 percent increase in 2022. Experts attribute this rise in premiums to injury severity and medical inflation pressures. Medical inflation increased more than 4 percent, while claim severity experienced an uptick of 5 percent. Despite rising costs, 2022 marked the ninth consecutive year of underwriting profitability, with this year being the sixth year in a row for a combined ratio under 90. 

A recent report shows that new employees are at the highest risk of workplace injuries.

NationalTravelers Insurance 2023 Injury Impact Report found that first year employees are the most susceptible to potential workplace injuries. Claims examined from 2016 up to 2020 show that first year employees represented 34 percent of all workers’ compensation claims and claim costs. Other findings reveal that employees aged 60 and older saw the highest costs per claim than other age groups. The most common injury amongst all injured workers were strains and sprains with the most common cause of injury being overexertion. Travelers examined over 1.2 million workers’ compensation claims in their study. 

                                         State legislators give their formal approval to physician                                                                      dispensing rules proposed by the DWC.

injured-workers-pharmacy-blog-floridaWith Florida’s legislative session coming to an end last Friday, the House and Senate agreed to passage for HB487. This bill includes several regulations from the state’s Department of Financial Services (DFS) that require the legislature’s approval. The Division of Workers’ Compensation (DWC) new physician dispensing rules are among the bill's provisions. These rules clarify that physicians may dispense medication to injured workers and the medication cannot be denied absent a contrary contractual provision. Medication reimbursement may be denied by the carrier if prior authorization is not followed or if the drug is not related to treating the worker’s workplace injury. This change is expected to incur over $8 million in added costs, which required the legislature to formally approve the measure. The bill is expected to receive approval from the Governor’s office. 

                                The Department of Labor & Industries (DLI) proposed updates                                                             to treatment guidelines and formulary protocols.


injured-workers-pharmacy-blog-montanaThe state Department of Labor & Industry (DLI) is proposing updates to its medical treatment guidelines and drug formulary. Potential updates include adopting the Montana Utilization and Treatment Guidelines, 8th Edition, for medical services provided on or after July 1, 2023, and the April 2023 edition of the ODG Drug Formulary for prescriptions written on or after July 1, 2023. Treatment guideline proposals would address low back pain and cervical spine injuries. Meanwhile, the updates to the ODG formulary would have a somewhat minimal effect on practice, as the DLI is legally required to formally adopt a drug formulary on an annual basis. A public hearing regarding these proposals will be held on May 18th. 

                            A legislative clarification bill could provide more comprehensive                                                                              coverage for injured workers.

injured-workers-pharmacy-blog-pennsylvaniaFollowing a favorable report from the House Labor & Industry Committee, Legislators in the House agreed to passage this week for HB930. The bipartisan initiative would clarify that any worker disfigured on the job would qualify for workers’ compensation benefits. Current law only permits coverage for head, neck, and face disfigurement injuries. If passed by the Senate, the bill would become effective 60 days after passage. 

 Statehouse leaders approve presumptive coverage for firefighters facing mental injuries. 

injured-workers-pharmacy-blog-tennesseeState lawmakers in the House and Senate gave their stamp of approval for SB856. The bill would provide presumptive coverage for Tennessee firefighters related to mental injury claims. Firefighters who respond to a traumatic scene(s) that “shocks the conscience” would be eligible for the presumption. Bill language would allow firefighters to file for workers’ compensation for up to a year from the final date of employment with a fire department. The bill is expected to be approved by the Governor’s office. 


Note: To access audio for the LWU please access audio via Adobe by a.) choosing “view” at the top menu b.) click “activate read out loud” c.) click “read to end of the document”. 

Download State of the States 

Stay connected to all relevant information in workers' compensation and pharmacy by subscribing to our weekly newsletter. For last week's wrap-up, please click here.