Texas’s worker’s compensation market is stable and steadily growing.
The workers’ compensation market is one of the few consistently profitable lines in the state, according to the Worker’s Compensation Annual Report 2024 from the Insurance Council of Texas.
Texas has the country’s fourth largest workers’ compensation direct written premium, with $2.7 billion in 2023, behind California ($11.9 billion), New York ($3.5 billion) and Florida ($3.4 billion). Texas accounts for 4.8% of the U.S. workers’ compensation market, which totaled $8.4 billion in 2023.
That year, Texas workers’ compensation had a net underwriting profit of $348.4 billion and direct losses totaling $1.03 billion, up 14.28% over 2022. The 2023 loss ratio was 39.98%.
Health Care Costs
There are 26 certified networks offering workers’ compensation healthcare services in Texas. Network claims typically have lower overall healthcare costs than non-network claims at the six- and 12-month benchmarks.
While the vast majority of both network (97%) and non-network claims (94%) involved professional services, non-network claims had a higher share of hospital services (29%) than did network claims (25%). Conversely, more network claims involved pharmacy expenses (27%) than non-network (24%). Of employees who received network care, 63% said they were satisfied, versus 55% of those who received non-network care.
Prompt attention to injuries may help lower costs. Injured employees who waited eight or more days to receive treatment accrued 27% higher median medical expenses ($798) than those who were seen within a week ($629). In 2022, 82% of claimants received non-emergency care within seven days.
Access to care
Fewer doctors offer workers’ compensation services, but those who do are seeing fewer patients.
The number of dedicated doctors working with workers’ compensation patients dropped 4% between 2017 and 2022. At the same time, the number of claims handled by each participating physician dropped 7%, and new claims fell 3%. However, the numbers may reflect more patients receiving treatment from physician assistants and advanced practice registered nurses.
Recent legislative action and Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) initiatives aim to streamline the process by which doctors can become designated doctors within the workers’ compensation system, improve widespread access to care and shorten wait times. In 2022, 74% of workers’ compensation participating physicians were in the state’s five largest metro areas: Houston, Dallas, San Antonio, Austin and Houston.
Designated doctors are incentivized by reimbursement rates ranging from 200-250% of Medicare. The changes to the process have resulted in the addition of 80 new designated doctors between April 2023 and May of this year.
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