Pain Management Accounts for 30% of Workers Compensation Medical Costs in 2023, with Significant Variation Across States
WHAT:
New NCCI analysis examining pain management (PnM) costs in workers compensation across states.
WHY IT MATTERS:
Pain management represents a substantial share of workers compensation medical costs—totaling 30% in Service Year (SY) 2023. While overall trends are consistent, cost drivers and outcomes vary widely by state, underscoring the importance of state‑specific dynamics and policy approaches.
OVERVIEW:
In this brief, NCCI examines pain management costs across states—because, as we often note, every state has its own story. The analysis explores how pain is being treated today, what has replaced opioids in managing pain, and how those shifts are affecting medical costs. The brief also reviews four types of regulatory measures, illustrating how policy decisions can play a meaningful role in managing future topical costs.
KEY FINDINGS:
- Even after controlling for differences in diagnosis mix, pain management costs vary significantly by state.
- Costs for treating pain through physical medicine and major surgery have increased across nearly all states. This increase, however, has been partially mitigated by a sharp decline in drug costs, primarily driven by a reduction in opioid usage.
- Pain management paid per claim increased an average of 1% per year, with the largest increase in Louisiana (5.3%) and the largest decrease in Alaska (‑3.0%).
- When broken down by medical service category, the largest contributors to total PnM paid amounts are:
- Major surgery: 34%
- Drugs: 14%
- Physical medicine: 14%
- The decline in opioid costs is being offset by increased use of topical creams and gels. The degree of changes in drug costs is a key driver of state differences.
- States with strict physician‑dispensing limits are among those with the lowest topical medication costs.
- Opioids and topical medications together account for approximately 40% of drug costs per PnM claim across all study states. Due to the higher price of topicals, even small increases in utilization can lead to significant increases in cost.
- On average, more than 50% of topical payments are physician‑dispensed, compared with 17% for all other pain management drugs.
FULL REPORT: Pain Management Interstate Variation.
