Hospitals face cuts in workers’ comp fees; State OKs new payment schedule

Hospitals face cuts in workers’ comp fees; State OKs new payment schedule

By Staff/Wire reports, The Greenville News

June 27, 2006

The state Workers’ Compensation Commission OK’d a plan Monday that should cut payments to hospitals that treat injured workers.

Hospitals will get $62.1 million less for inpatient and outpatient care under the plan set to begin in October, said Gary Thibault, commission executive director.

“This is probably the most significant change on the medical side that we’ve seen,” he said.

The state’s workers’ compensation system spends about $850 million a year on medical bills and permanent and temporary disability payments. More than half of that goes to medical costs, Thibault said.

Under the plan, hospitals will be paid at most 40 percent more than Medicare pays for care, he said.

The state Hospital Association opposes the plan, saying the commission set an arbitrary amount — the Medicare payment plus 40 percent — with no analysis.

“We don’t know what it means,” said Tommy Cockrell, the association’s CEO. “Before any methodology should be prescribed for every hospital in the state, a cost analysis should be done to see what the actual impact will be.”

If the payments are too low, hospitals “may have to get out of the nonemergent Workers Comp business,” he said.
The change, approved by a 3-2 vote, came in response to soaring hospital charges for workplace injuries.

Between 2001 and 2005, charges rose 93 percent for inpatient care despite an 8 percent decrease in the number of people treated, Thibault said. For outpatient services, charges rose 48 percent despite a 9 percent decrease in cases.

The move was cheered by some, including the South Carolina Small Business Chamber of Commerce, which said it will play a vital role in keeping rates down.

“The No. 1 driver of workers’ compensation costs is medical claims,” chamber chief executive Frank Knapp said.

But Otis Rawl, lobbyist for the state Chamber of Commerce, was cautious. “Anytime you see a reduction in one area, you can see costs spike in other areas.”