September 4, 2024
Annual workers’ compensation rate cuts in the double digits have become routine in almost every U.S. state in recent years. That trend may have now come to an end in Florida, where the National Council on Compensation Insurance is recommending a 1% average decrease for the voluntary market.
It’s the smallest decrease in more than seven years. The NCCI said the rate, if approved by Florida’s Office of Insurance Regulation, is largely the result of higher reimbursements for physicians, starting in January 2025.
Florida lawmakers, with Senate Bill 362, earlier this year approved a new workers’ compensation maximum reimbursement plan for physicians for the first time in years, allowing a big jump in pay for doctors – from 110% of Medicare’s reimbursement schedule to 175%, in many instances.
Surgery rates will climb from 140% to 210% of Medicare’s reimbursement, the law reads. The new fee schedule can be accessed here.
State law requires legislative review when changes affect businesses’ bottom lines by more than $1 million, statewide, and lawmakers had declined to ratify the reimbursement manual until recently. A health care provider reimbursement manual was approved by Florida legislators in 2023.
“NCCI estimates that SB 362 will result in an impact of +5.6% on overall workers compensation system costs,” the NCCI said in a summary of the proposed rate change. “Excluding the impact of this bill from the filing would result in a revised overall rate decrease of –6.4% as opposed to the filed –1.0% change.”
The smaller rate decrease may come as a relief to some roofing contractors, who last year worried that repeated cuts were overlooking safety concerns in the industry and could ultimately lead to higher rates or potential revenue problems for self-insureds. In the last half-decade, Florida has seen average rate decreases of 15.1% for 2024; 8.4% for 2023; 4.9% for 2022; 6.6% for 2021; 7.5% for 2020; and 13.8% for 2019.
The 2025 rate recommendation was based partly on data from policy years 2021 and 2021. The NCCI, which recommends rates and loss cost decreases for 38 states, said that lost-time claim frequency has continued to decrease in Florida and most states. Across the country, claim severity changes have been moderate.
“The continued focus on worker safety and technological advancements are regarded as contributing to fewer workplace injuries over time,” the summary noted. “The latest medical severity change aligns with projected medical inflation, while indemnity severity tracked with changes in average weekly wages.”
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