Rates Continue to Drop; Fees for Doctors and Therapists Going Up, Report Says

Tuesday, July 31, 2018 | 0

The South Dakota Workers' Compensation Advisory Council met last week and reviewed a number of changes that will affect stakeholders for the next year or so, including new medical fee schedules, new application fees, and rates that have continued to drop.

The council meets a few times a year to review workers' compensation issues and to hear a report from the state Department of Labor and Regulation on the state of the system.

This year's report contained mostly good news, including the fact that average base rates for the voluntary insurance markets dropped 7% this year, and assigned-risk rates decreased 18.4%, starting July 1.

This is the seventh straight year of decreases in the voluntary market, said Tom Hart, deputy secretary of the department, at the July 26 meeting. He said the number of claims continues to fall,  although medical and indemnity severity increased slightly.

"Overall, our state's workers' compensation system is functioning well, and competes successfully with neighboring states," Hart said in the report.

The report also noted that state legislation and an administrative rule change increased the application fee for self-insured employers, to $2,250, effective July 1.

The department in May also approved new medical fee schedules, which raise the conversion factor for physician services by 0.5%. That brings the South Dakota system to its goal of reimbursing at 130% of Medicare's fees, up from 128% last year.

The U.S. median for fees for professional services (non-hospital) in 2016 was 152% of Medicare, and South Dakota ranked seventh-lowest among the states, according to the Workers Compensation Research Institute.

The department also changed some current procedural terminology (CPT) codes for physical therapists and occupational therapists, and changed the conversion factor to better reflect market rates for the services, the report said.

The National Council on Compensation Insurance has estimated that the changes will raise rates by only 0.1%, Hart said.