Economic conditions impacting payments

• The Workers Compensation Research Institute found medical payments per claim decreased while indemnity benefits per claim continued to grow in 2020 and 2021 in many states.
• The change likely reflects the impact of changes in economic conditions and the usage of medical care during the early COVID-19 pandemic period.
• Total costs per claim in Florida remained stable in 2020 and 2021, a change of pattern from the previous moderate growth from 2016 to 2019.
• The trends in indemnity components in Texas differed between 2016 and 2021, though wages of workers with injuries grew more than 3%.
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Delaware court makes major workers’ comp ruling

• The Delaware Supreme Court granted the third-party defendant’s motions to dismiss the third-party complaints.
• That decision stemmed from the contract at issue and prevented the defendants/third-party plaintiffs from being able to recover against the third-party defendant under a theory of contractual indemnification.
• The court discussed and followed the Delaware Supreme Court’s decision in that the workers’ comp exclusivity exception permits an employee to recover from a third party.
• This is legal when a contract between the employer and the third party contains provisions requiring the employer to perform work in a workmanlike manner and expressly or impliedly indemnify the third party for claims rising from the employer’s own negligence.
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A look at workers’ comp expenditures

• Facility costs account for about 40% of countrywide workers’ comp medical expenditures.
• Many states base their WC facility fee schedules on the rules and rates CMS publishes to establish maximum allowable reimbursements (MARs) for procedures performed in a facility setting.
• The Centers for Medicare and Medicaid Services increased the ASC base rate from $49.92 in 2022 to $51.85 in 2023.
• This represents a +3.9% increase in the base rate for all ASC services in 2023.
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Impact of workers’ comp during recession

• During a recession, there may be a decrease in employment and payroll and that can lead to a reduction in premiums for workers’ compensation.
• Certain decisions will have a long-term impact on the cost of workers’ compensation and ensure that employees can still rely on some level of payment.
• Entering the labor market during a recession can adversely affect a worker’s future earnings and employment prospects.
• The effects of a recession on overall compensation can vary depending on the circumstances and industry involved.
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