According to a report by the National Council on Compensation Insurance, physical medicine expenses have been the primary contributor to the increase in annual physician costs in workers’ compensation over the past decade.

The report, titled "Inflation and Workers Compensation Medical Costs -- Physician Services," explores the correlation between inflation and medical costs in workers’ compensation, and was published by NCCI on Tuesday.

The report revealed that the average physician-paid cost per comp claim has experienced an annual increase of approximately 1.5%. Furthermore, nationwide doctor payments have increased by roughly 15% between 2012 and 2021.

It is worth noting that six states in the Midwest do not have medical fee schedules for physician services. Physician costs in the Western, Southeastern, and Northeastern regions all saw slower growth compared to the nationwide average.

The report attributes the growth across all regions to the pricing of physician services, which accounts for approximately 40% of all workers’ compensation medical costs. The report also broke down physician services into various categories, including physical medicine, evaluation and management, surgery, radiology, and others.