Managed care preapproval and its effect on the cost of Utah worker compensation claims

OBJECTIVE

To determine the effect of preauthorization of chiropractic services costs in non-surgical back injury cases in a managed care environment. The program was implemented in the chiropractic provider group by the Worker Compensation Fund of Utah. The results were compared with those of similar injury claims in a separate provider group in which there was no preauthorization program.

DESIGN

The study was a retrospective review of approximately 5000 claims from 1986 and 5000 claims from 1989 of injured workers in the Utah Worker Compensation Fund. We extracted approximately 1000 nonsurgical back-related injury claims from each year.

MAIN OUTCOME MEASURE

Cost comparisons between medical and chiropractic provider groups in the management of nonsurgical compensable back pain in both 1986 and 1989.

RESULTS

Treatment costs in cases managed by chiropractic physicians increased 12% between 1986 and 1989. Treatment cost in cases managed by medical physicians increased 71% in the same time period. Compensation (wage replacement) costs increased 21% for the chiropractic group and 114% for the medical group.

CONCLUSION

Retrospective analysis of worker compensation databases continue to struggle with issues related to measurement of severity, appropriate condition identification, adequate inclusion of all related costs and unbiased case selection. Treatment costs appeared to be controlled under the auspices of a preapproval program required of the chiropractic physician whereas medical costs escalated in the absence of price controls.

Cost per case comparison of back injury claims of chiropractic versus medical management for conditions with identical diagnostic codes

This study assessed the total cost per case of chiropractic claims and medical claims for conditions with identical diagnostic codes. The sample consisted of 3062 claims or 40.6% of the 7551 estimated back injury claims from the 1986 Workers' Compensation Fund of Utah. For the total data set, cost for care was significantly more for medical claims, and compensation costs were 10-fold less for chiropractic claims.