© WCRI 2020

January 30, 2020

Webinar: Highlights From Recent CompScope™ Studies For

Pennsylvania

© WCRI 2020

• Independent, not-for-profit research organization providing high-quality, objective information about public policy issues involving workers’ compensation systems

• Serve as a resource for public officials and stakeholders, but we do not make recommendations or take positions

• Studies are peer-reviewed with a focus on benefit delivery

• Diverse membership support, including gov’t agencies, employers, insurers, labor unions, service providers, etc.

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About WCRI

© WCRI 2020

• The presentation is 30 minutes long: 25 minutes of slides and 5 minutes for your questions

• To submit a question, use the “Questions” box located on the right-hand side of your screen

• If you are having issues with your connection or audio, please call GoToWebinar at 1-800-263-6317

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About The Webinar

© WCRI 2020

• A copy of the slides can be downloaded under “Handouts” on the right-hand side of your screen

• Today’s presentation is being recorded and will be provided within 48 hours

• At the end of the webinar we ask that you take a short online survey. For every completed survey, WCRI will donate $2.00 to Kids’ Chance

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About The Webinar (Cont.)

© WCRI 2020

Your Presenter – Will Monnin-Browder

Mr. Monnin-Browder studies the performance of state workers’ compensation systems as part of WCRI’s CompScope™ benchmarking team. He previously served as executive director of the Massachusetts Workers’ Compensation Advisory Council and as legal counsel to the Massachusetts Legislature’s Joint Committee on Labor and Workforce Development. Mr. Monnin-Browder received his B.A. from Tufts University and his J.D. from Suffolk University Law School.

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© WCRI 2020

January 30, 2020

Webinar: Highlights From Recent CompScope™ Studies For

Pennsylvania

© WCRI 2020

Main Questions Addressed Today

• What are the major cost drivers in Pennsylvania’s workers’ compensation system?

• How does Pennsylvania compare to other states on different system performance metrics?

• How have those system performance metrics changed over time?

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© WCRI 2020

What Is CompScope™?

• Annual benchmarking studies that compare state WC benefit delivery systems

• Contains 18 larger-than-average states representing over 60% of U.S. WC benefits paid

• Goals:• Facilitate continuous improvement of state WC systems• Monitor the impact of reforms• Ground public policy debates in facts that are based on

data

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© WCRI 2020

Scope Of CompScope™ Multistate Benchmarks

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CompScope™ MedicalCompScope™• Benefit amounts• Timeliness• Medical costs• Disability duration• Attorney involvement• Vocational rehabilitation use• Benefit delivery expenses

• Medical costs• Medical prices• Utilization of services• By provider type• By service type

© WCRI 2020

Findings From Recent WCRI CompScope™ Reports For Pennsylvania

• Total costs per claim and key components higher in PA compared with other study states • Higher indemnity benefits per claim: Drivers were longer

duration of temporary disability and larger settlements• Higher medical payments per claim: Higher utilization partially

offset by lower-to-typical prices paid for medical services• Litigation expenses per claim were among the highest of study

states, likely related to system features and processes

• Total costs per claim increased 2-3 percent per year since 2012; key components stable or grew moderately

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Findings included in this presentation are based on claims with more than seven days of lost timeSources: CompScope™ Benchmarks For Pennsylvania, 19th Edition & CompScope™ Medical Benchmarks For Pennsylvania, 20th Edition

© WCRI 2020

PA Total Costs Per Claim With > 7 Days Lost Time Among Highest Of Study States

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2015/2018 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages

$54,362

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

MI TN TX MA AR MN IN FL WI NJ CA GA IA IL NC VA PA LA

Aver

age

Tota

l Cos

t Per

Cla

im Median State: $41,888

© WCRI 2020

Indemnity, Medical, & Expenses All Contributed To Higher Total Costs Per Claim In Pennsylvania

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* With Expenses2015/2018 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages

Total Costs Per Claim

Indemnity Benefits/Claim

Medical Payments/Claim

Benefit Delivery Expenses/Claim*

Total Costs Per Claim:30% Higher Than Median Study State

Indemnity Benefits/Claim:

52% Higher Than Median

Medical Payments/Claim:20% Higher Than

Median

Benefit Delivery Expenses/Claim*25% Higher Than

Median

Benefit Delivery Expenses/Claim*

Medical Cost Containment Expenses Per Claim: Typical

Litigation Expenses/Claim: Higher

© WCRI 2020

Indemnity Benefits Per Claim In Pennsylvania Among Highest Of Study States

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2015/2018 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And WagesIndemnity benefits include settlements, which may include some amount for future medical payments.

$27,055

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

WI IN TX MI TN AR NJ MN FL MA VA CA IL IA LA GA PA NC

Aver

age

Inde

mni

ty B

enef

it/Cl

aim Median State: $17,778

© WCRI 2020

Factors Contributing To Higher-Than-Typical Indemnity Benefits Per Claim In Pennsylvania

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• Longer duration of temporary disability compared with other study states

• Higher average temporary total disability benefit rate• Larger lump-sum settlements and a higher

percentage of claims with lump sums compared with most other wage-loss states

© WCRI 2020

General Classification Of Indemnity Benefit Systems: Wage-Loss Versus PPD States

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Indemnity Benefit Systems

Wage-Loss Benefit Systems

PPD Benefit Systems

5 Study States:

LA, MA, MI, PA, VA

11 Study States:

AR, CA, FL, IA, IL, IN, MN, NJ, TN, TX, WI

2 Study States:

GA, NC

Attributes Of Both Wage-Loss And PPD

© WCRI 2020

Longer Duration Of Temporary Disability Contributed To Higher Indemnity Benefits Per Claim In PA

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2015/2018 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages

11 11 12 12 12 1314 14

1718 20 20 21

1618

22 23

32

0

5

10

15

20

25

30

35

WI IA FL TN IN MN AR NJ TX IL CA GA NC MI VA PA MA LA

Tem

pora

ry D

isab

ility

Dur

atio

n (w

eeks

) PPD Benefit System Wage-Loss Benefit System

Wage-Loss &

PPD

© WCRI 2020

PA Had Highest Weekly TTD Benefit Rate; Contributed To Higher Indemnity Benefits/Claim

Measure (2017/18) PARange Of Study States

Min. Median Max.

Average TTD Weekly Benefit Rate $545 $444 $513 $545

Maximum TTD Benefit As % SAWW* 100% 75% 100% 200%

Maximum Statutory TTD Benefit** $995 $575 $970 $1,720

AWW Of Injured Workers $852 $716 $804 $914

Statutory TTD Benefit Rate as % Of AWW*** 66⅔% 60% 66⅔% 70%

% Workers With Benefits Limited By Maximum 11% 0.1% 10% 30%

172017/18 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix

*Georgia and Indiana have no provisions; the maximum benefit as a percentage of the SAWW is calculated. **Maximum Statutory Weekly Benefit As Of July 1, 2017***Some states use 80% of spendable earnings.Note: In Texas, the maximum weekly statutory TTD benefit is set at the state average wage, which is 88% of the average weekly wage in covered employment as computed by the Texas Workforce Commission.

© WCRI 2020

$57,781

$0

$20,000

$40,000

$60,000

$80,000

TX NJ IN TN FL WI CA IL AR MN IA NC GA LA VA MI MA PA+ +

PA Lump-Sum Payments Per Claim Highest Of The Study States

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2015/2018 Claims With Lump-Sum Payments As % Of Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix And Wages

12%17%

23%25% 27%

0%10%20%30%40%50%

TX WI AR MN NJ IN IA TN FL CA IL GA NC MI MA VA PA LA

+ No/Little Lump Sum Of Future Medical

++ ++

Wage-Loss Benefit System

PPD Benefit SystemWage-Loss

& PPD

Average Lump-Sum Payment Per Claim With Lump Sum

% Of Claims With Lump-Sum Settlements

PPD Benefit SystemWage-Loss

& PPDWage-Loss

Benefit System

++

© WCRI 2020

Findings From Recent WCRI CompScope™ Reports For Pennsylvania

• Total costs per claim and key components higher in PA compared with other study states • Higher indemnity benefits per claim: Drivers were longer

duration of temporary disability and larger settlements Higher medical payments per claim: Higher utilization partially

offset by lower-to-typical prices paid for medical services• Litigation expenses per claim were among the highest of study

states, likely related to system features and processes

• Total costs per claim increased 2-3 percent per year since 2012; key components stable or grew moderately

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Sources: CompScope™ Benchmarks For Pennsylvania, 19th Edition & CompScope™ Medical Benchmarks For Pennsylvania, 20th Edition

© WCRI 2020

$19,280

$0$5,000

$10,000$15,000$20,000$25,000$30,000

MA CA MI TN TX NC AR MN GA FL PA NJ IL IA IN WI LA VA

2015/201818-State Median: $16,014

$13,951

$0$5,000

$10,000$15,000$20,000$25,000$30,000

MA CA TX MI NC TN MN GA FL AR PA IL NJ LA IA IN VA WI

PA Medical Payments/Claim Were In Middle Group Of Study States For 12- & 36-Month Claims

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Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix

2017/2018

Aver

age

Med

ical

Pay

men

t Per

Cla

im 18-State Median: $13,524

© WCRI 2020

Offsetting Components Resulted In Typical Medical Payments Per Claim In PA (2017/2018 Claims)

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* Hospital inpatient is based on 2016/2018 claims. Physical medicine: PT/OTs were the largest provider of these services in terms of payments and volume of provided services.

2017/2018 Claims

PA Relative To Other Study States

Payments Per Claim

% Of Claims

Price OrPayments/Service

Utilization Or Services/Claim

Hospital Outpatient Higher Higher Lower Higher

Hospital Inpatient* Typical Typical n/a n/a

Physician Lower Typical Typical Typical

Providers Of Physical Medicine*

Higher Typical Typical Higher

© WCRI 2020

Findings From Recent WCRI CompScope™ Reports For Pennsylvania

• Total costs per claim and key components higher in PA compared with other study states • Higher indemnity benefits per claim: Drivers were longer

duration of temporary disability and larger settlements• Higher medical payments per claim: Higher utilization partially

offset by lower-to-typical prices paid for medical services Litigation expenses per claim were among the highest of study

states, likely related to system features and processes

• Total costs per claim increased 2-3 percent per year since 2012; key components stable or grew moderately

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Sources: CompScope™ Benchmarks For Pennsylvania, 19th Edition & CompScope™ Medical Benchmarks For Pennsylvania, 20th Edition

© WCRI 2020

PA Had Highest Litigation Expenses Per Claim Of All Study States

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2015/2018 Claims With > 7 Days Of Lost Time With Litigation Expenses, Adjusted For Injury/Industry Mix

$9,387

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

TN WI TX IN AR NJ MI VA MA IA IL NC FL MN GA CA LA PA

Median State: $5,120

Note: Litigation expenses include payments that are allocated to individual claims.

Aver

age

Litig

atio

n Ex

pens

e Pe

r Cla

im

Litigation Expenses Include:• Defense Attorney• Medical-Legal• Ancillary Legal

Litigation Expenses Include:• Defense Attorney• Medical-Legal• Ancillary Legal

© WCRI 2020

Many Components Of Litigation Expenses Were Higher Than Typical In Pennsylvania

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Note that the values shown for Pennsylvania and the median state reflect rounding; differences were calculated based on unrounded numbers.2015/2018 Claims With > 7 Days Of Lost Time, Adjusted For Injury/Industry Mix

Measure PAMedian State

% Or PPT Difference

(relative to median)% Of Claims With Defense Attorney (payments > $500) 33.8% 32.5%

1.3 ppt (typical)

Defense Attorney Payments/Claim (payments > $500) $7,452 $5,721

30% (higher)

% Of Claims With Medical-Legal Expenses 31.7% 22.4%

9.2 ppt(higher)

Medical-Legal Expenses/Claim $3,105 $2,035 53%

(higher)

% Of Claims With Ancillary Legal Expenses 38.6% 43.0%

-4.4 ppt(lower)

Ancillary Legal Expenses/Claim $2,294 $1,18693%

(among highest)

© WCRI 2020

Possible Reasons For Higher-Than-Typical Litigation Expenses Per Claim In Pennsylvania

• Defense attorney representation required at formal hearing

• Litigation and discovery—often involves multiple hearings to collect all of the evidence

• Medical evidence often provided through depositions rather than medical reports

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© WCRI 2020

Findings From Recent WCRI CompScope™ Reports For Pennsylvania

• Total costs per claim and key components higher in PA compared with other study states • Higher indemnity benefits per claim: Drivers were longer

duration of temporary disability and larger settlements• Higher medical payments per claim: Higher utilization partially

offset by lower-to-typical prices paid for medical services• Litigation expenses per claim were among the highest of study

states, likely related to system features and processes

• Total costs per claim increased 2-3 percent per year since 2012; key components stable or grew moderately

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Sources: CompScope™ Benchmarks For Pennsylvania, 19th Edition & CompScope™ Medical Benchmarks For Pennsylvania, 20th Edition

© WCRI 2020

Total Costs Per Claim In PA Increased 3%/Year At Most Maturities Since 2012

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Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Aver

age

Tota

l Cos

t Per

Cla

im

12 Months 24 Months 36 Months 48 Months

AAPC2000–2012

Since 2012

12 Mos. 6.9% 3.1%

24 Mos. 6.9% 3.3%

36 Mos. 6.5% 3.1%

48 Mos. 6.1% 2.4%

© WCRI 2020

PA Total Costs/Claim & Key Components Grew 3-4%/ Year Since 2012 (36 Mos.); Mostly Similar To Other States

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Claims With > 7 Days Of Lost Time At 36 Months Of Experience, Not Adjusted For Injury/Industry Mix And Wages

-8%-6%-4%-2%0%2%4%6%8%

10%TN N

C CA IN GA WI

MI

MN VA NJ IL FL AR PA IA TX MA LA

-8%-6%-4%-2%0%2%4%6%8%

10%

CA NC IN GA

MN TN NJ

AR TX IL WI

MI

FL MA VA PA IA LA

-8%-6%-4%-2%0%2%4%6%8%

10%

TN WI

MI

VA GA IA NC IN NJ IL PA M

N CA FL MA

AR TX LA

-8%-6%-4%-2%0%2%4%6%8%

10%

TN FL CA GA IL

MA VA AR PA MI

NC WI

TX IN MN IA NJ

LA

AAPC

201

2/2

015

To

201

5/2

018

Total Costs/Claim Medical Payments/Claim

Indemnity Benefits/Claim BDE/Claim With BDE

© WCRI 2020

Increases In Wages & % Of Lump Sums Contributed To Growth In Indemnity Benefits/Claim Since 2012

Key Indemnity Metrics In PA

2012/2015 2015/2018Annual Avg. % or

PPT Change

Indemnity Benefits Per Claim $25,837 $28,261 3.0%

AWW Of Injured Workers $768 $807 1.7%

Duration Of Temporary Disability 22.8 weeks 21.8 weeks -1.5%

% Of Lump-Sum Claims 22.6% 25.4% 0.9 ppt

Average Lump-Sum Settlement Per Claim $59,915 $60,253 0.2%

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Claims With > 7 Days Of Lost Time, Not Adjusted For Injury/Industry Mix And Wages

© WCRI 2020

-16%-12%

-8%-4%0%4%8%

12%16%

NC CA TX TN MN IN GA NJ IL

MA PA VA MI

WI

FL AR LA IA

-16%-12%

-8%-4%0%4%8%

12%16%

NC IN GA

AR IL MI

TN CA MN TX NJ

MA LA IA FL WI

VA PA

-16%-12%

-8%-4%0%4%8%

12%16%

NC IN MN TX NJ

FL CA MI

PA WI IA IL

MA VA TN GA LA

Payments/Claim To Hospital Outpatient Providers Grew More In PA Than In Other Study States

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Claims With > 7 Days Of Lost Time At 12 Months Of Experience, Not Adjusted For Injury/Industry Mix

-16%-12%

-8%-4%0%4%8%

12%16%

TX CA TN NC FL NJ

GA

MN AR MA VA WI

PA IL LA IA MI

IN

Annu

al A

vera

ge %

Cha

nge

201

2/2

013

To

201

7/2

018

Hospital Outpatient

Nonhospital

Hospital Inpatient

Overall

© WCRI 2020

Conclusion: Findings From Recent WCRI CompScope™ Reports For Pennsylvania

• Total costs per claim and key components higher in PA compared with other study states • Higher indemnity benefits per claim: Drivers were longer

duration of temporary disability and larger settlements• Higher medical payments per claim: Higher utilization partially

offset by lower-to-typical prices paid for medical services• Litigation expenses per claim were among the highest of study

states, likely related to system features and processes

• Total costs per claim increased 2-3 percent per year since 2012; key components stable or grew moderately

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Findings included in this presentation are based on claims with more than seven days of lost timeSources: CompScope™ Benchmarks For Pennsylvania, 19th Edition & CompScope™ Medical Benchmarks For Pennsylvania, 20th Edition

© WCRI 2020

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