Giving workers their choice of medical providers in workers' compensation claims on average doesn't impact costs either way — when looking across all injury types, according to a study released last week by the Workers Compensation Research Institute, The Effects of Provider Choice Policies on Workers' Compensation Costs.
But for back-related injuries and the most expensive claims overall, the evidence suggests worker choice may drive up costs, the Cambridge, Mass.-based organization's study concludes.
When analyzing costs across all injury types, there was little evidence of differences in average costs per claim between states where policies give employers control over the choice of provider and states where policies give workers the most control of the choice of provider, according to the study. This is especially true for medical costs, where average cost differences were near zero.
Recommended For You
But there were differences in cost for the injury category that includes back and neck sprains, strains and non-specific pains, or neurologic spine pain.
Moreover, policies which give workers the most control over the choice of provider are associated with higher medical and indemnity costs among the small share of the most expensive back-related injuries and, more generally, higher indemnity costs for the costliest cases overall — in which back-related injuries appear to at least partially account for such costs.
The evidence "could reflect some of the common criticisms of policies giving workers more control — that such policies remove the incentive to hold down costs, and workers may collaborate with their providers to stay out of work longer," the authors write.
But the evidence also suggests that if policies are changed to restrict worker choice for all types of claims, costs on average would likely not be reduced, according to the study.
"Rather, policymakers in states where policies give workers control of the choice of provider might focus on factors affecting costs for the most costly cases," WCRI president and chief executive John Ruser says in a press release.
The study's authors concede that understanding how implementation of provider choice policies affects costs — and how policymakers can influence implementation — is "a formidable challenge."
Moreover, "it is important to extend the research beyond costs, which are by no means the only desiderate in judging the effectiveness of workers' compensation policies," the authors say. "Ultimately, we also need evidence on the benefits of alternative policies in terms of productive return to work of injured workers."
This study examined the effects of provider choice policies on workers' compensation costs for injuries that occurred mostly between 2007 and 2010 across 25 states in which either employers or workers control the choice of provider. It excludes states where workers can choose a provider within their employers' established network.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
