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The Agency’s mission is to efficiently administer the Act and provide prompt, courteous and impartial service to all
customers. Its ongoing goal is to provide a fair payment and reimbursement system for payers and providers and
maintain or enhance access to quality healthcare for injured workers. The Agency strives to fulfill this mission and
goal each time it updates the HCS ruleset. In another WCRI study by Savych and Thumula (2017), Comparing
Outcomes for Injured Workers in Michigan, 2016 Interviews, Michigan results were similar to other study states on
satisfaction with overall medical care, and access to desired medical services and providers. And of the reasons
surveyed, less than 5% of those polled indicated that access to care was due to a medical professional not taking
workers’ compensation patients. Michigan has also experienced a combined decrease in the “pure premium” rate of
39% over the last 7 years, saving Michigan employers approximately $390 Million.
30. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a result
of the proposed rules.
No expected direct cost reductions as a result of this proposed rule set. Employers typically see their savings on the
insurance side based on experience ratings and lower premiums, as well as through enhanced safety and ergonomic
measures, thereby decreasing claims and associated costs. Insurers may be able to reduce costs depending on the
variances in the fee schedule percentages, and through development of provider networks. Overall, utilizing a
medical care fee schedule allows providers and insurers the ability to maintain balance in the reimbursement process.
31. Estimate the primary and direct benefits and any secondary or indirect benefits of the proposed rules. Please
provide both quantitative and qualitative information, as well as your assumptions.
The proposed rules support business competitiveness, and worker safety, since these rules will continue to control the
workers’ compensation health care costs for injured Michigan workers while maintaining reasonable reimbursement
rates for practitioners at or above 130% of Medicare payouts, and maintaining or improving an injured worker’s
access to medical care. Because the proposed rules update practitioner reimbursement rates, they will not adversely
impact the business community. By annually updating the relative value information and conversion factors, the
provider and payer community can be assured that the fee structure is following standards that reimburse at a
reasonable rate for the services while containing medical costs. The Workers’ Compensation Agency understands the
importance of keeping medical costs affordable for Michigan employers, but must also balance that against access to
quality care for the injured worker.
32. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.
The Workers’ Compensation Agency Health Care Services regulates the cost of medical treatment rendered to injured
workers under the Workers’ Disability Compensation Act. The cost containment rules serve a valuable function in
managing health care costs while maintaining access to care. The HCS fee schedule helps to promote business
growth and ultimately job creation by reducing overall Workers’ Compensation costs and insurance premiums.
Again, Michigan has also experienced a combined decrease in the “pure premium” rate of 49% over the last 8 years,
saving Michigan employers approximately $492 Million.
33. Identify any individuals or businesses who will be disproportionately affected by the rules as a result of their
industrial sector, segment of the public, business size, or geographic location.
Medical costs per case are dictated by the individual needs of the injured worker after the injury occurs. None of the
factors raised in this question impact on the treatment needs of a given injured worker.
34. Identify the sources the agency relied upon in compiling the regulatory impact statement, including the
methodology utilized in determining the existence and extent of the impact of the proposed rules and a cost-
benefit analysis of the proposed rules.
The Michigan Workers’ Compensation fee schedule uses the Center for Medicaid and Medicare Services (CMS)
methodology as the foundation for determining the State’s workers’ compensation medical service fees. The Agency
also relies upon The Health Care Services Advisory Committee which includes external members representing
payers, providers and injured workers, and external research from sources such as the Workers’ Compensation
Research Institute (WCRI). For example, comparative studies from WCRI demonstrate that benefit delivery
expenses per claim in Michigan were 28% lower than the 18-state median for 2016/2019 claims. Lower benefit
delivery expenses were driven by lower medical cost containment expenses CompScopeTM Benchmarks for
Michigan, 20th Edition, Monnin-Browder, William. April 2020. pg. 19.
A. How were estimates made, and what were your assumptions? Include internal and external sources, published
reports, information provided by associations or organizations, etc., which demonstrate a need for the proposed
rules.
MCL 24.245(3)