South Florida Hospital News
Tuesday January 19, 2021
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January 2021 - Volume 17 - Issue 7
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http://dannagracey.com/

Even with Pandemic, Workers’ Compensation Rates to be Lower in 2021

On Jan. 1, 2021, the order by Florida Insurance Commissioner David Altmaier approving the statewide average reduction of 6.6 percent in workers’ compensation rates will take effect. This is good news for medical practices, as well as any business in Florida, since it’s likely the only insurance rate discount that they will see in the coming year.

“The National Council on Compensation Insurance (NCCI), which is the governing body for all workers’ compensation insurance throughout the country, reviewed the rates and determined that there should be a 5.7 percent reduction,” explained Medical Malpractice and Workers’ Compensation Specialist Tom Murphy at Danna-Gracey, the largest independent medical malpractice insurance agency in Florida “However, each state determines its own reduction or increase, and based on the documentation, Commissioner Altmaier decided that it should be slightly higher.”
 
This decision is based on a number of factors, including how much profit workers’ compensation carriers and underwriters have made over the last few years. “The number of claims have been affected by the fact that education and technology are creating safer workplaces, and that the economy has seen a long-term shift from manufacturing to service industries,” said Murphy.
 
While rates were expected to surge as a result of the Florida Supreme Court’s overturning the Castellanos decision, allowing lawyers to charge higher fees in workers’ compensation cases, that increase did not materialize.
 
“The shift in workplace safety put a damper on any rate increases when it came to the system having to make larger payments to attorneys on claims; they seem to be cancelling each other out at this point,” said Murphy.
 
Over the past four years, workers’ compensation rates have continued this downward trend, resulting in more than a 30 percent decrease.
 
“It’s currently the only place rates are going down,” said Murphy, adding that employer liability, property and casualty, malpractice, cyber professional liability, homeowners and auto insurance rates are all trending upward.
 
“Because of bigger judgments made in lawsuits, the shrinking market for coverage and a number of other factors, every other line of insurance is trending upwards,” said Murphy. “This is the one piece of good news, especially for medical practices and physicians.”
 
At this point, COVID hasn’t entered too far into the equation, despite the fact that Florida ranks in the top three states in COVID-related claims, according to a report from the NCCI.
 
“In Florida, of every 100,000 workers’ compensation claims reported, 300 are COVID-related,” said Murphy, adding that the report doesn’t say how many of these claims have been accepted as workers’ compensation claims.
 
Not surprisingly, 85 percent of COVID-related claims are women, according to Murphy.
 
“It makes sense; the vast majority of employees in healthcare world are women, including nurses, aides, and home healthcare workers,” he explained. “This is where people are exposed to the virus.”
 
According to the report, for the first six months of the pandemic, 20 percent of medical claims required inpatient hospital stays, and 19 percent of those patients required admission into intensive care.
 
“The average worker admitted to the ICU stayed for 11.5 days compared to non-intensive care patients averaging 7-day stays,” said Murphy, adding that the average ICU visit cost $67,000, compared to $38,000 for non-ICU care.
 
Workers pursuing COVID-19 claims had an average age of 46 years old, which is six years older than the average injured worker claim.
 
While workers’ compensation claims related to COVID had dropped off 20 percent between the second and third quarter, it recently began rising again—and that trend is expected to continue.
 
“At the beginning, there wasn’t a lot known about the virus, so we saw a big uptick in claims from the medical world,” said Murphy. “As people learned more about it and put more safety measures in place, those numbers decreased.
 
“However, we’re expecting to see another uptick as more of the general population gets sick and goes into hospitals needing care,” he continued. “That will trickle down to providers, who will see an increase in the incidence of illness and transmission.”
 
While Murphy doesn’t expect changes in workers’ compensation rates for the next year, the industry is constantly in flux.
 
“It’s an interesting dynamic; there’s an uptick in claims related to COVID, but a downtick in overall injured workers,” he said. “Because there are currently millions out of work, the workers’ compensation system in general is seeing fewer reported claims, so rates are lower.
 
“That’s at least a little good news with all doom and gloom going on; a little light at the end of tunnel for medical practices and physicians,” he added.

For more information, contact Tom Murphy or Matt Gracey at 800-966-2120 or visit www.dannagracey.com

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