October 23, 2025
Benchmarking exposes hidden overspend, empowers early intervention, and delivers measurable savings—before rising costs erode your bottom line.
Recent findings from the Workers Compensation Research Institute (WCRI) reveal a troubling trend: medical costs per workers’ compensation claim are jumping sharply, up 5–12% across most major states. This surge is driven by higher medical utilization, rising prices, and frequent updates to state fee schedules.
The message is clear: traditional cost containment strategies are losing ground
As medical costs rise, claims leaders need more than fee schedules and bill review.
Fee schedules are a blunt instrument; they limit what you pay per service but not how many services are delivered. Without benchmarking and real-time analytics, organizations remain exposed to hidden overspend and provider variability. Some providers are much more expensive or less effective than others, even within fee schedule limits. And while regulatory changes and price controls help, they don’t address that inconsistency and unnecessary utilization—often the real drivers of excess cost.
Visibility and benchmarking are more important than ever
Without transparent, risk-adjusted benchmarks, it’s difficult to know whether your medical spend is truly in line with best practices or if there are hidden inefficiencies. By benchmarking actual care patterns and provider performance, not just prices, your claims team can steer care and referrals to high-performing providers. You’ll be empowered to identify outlier utilization and unnecessary services, enabling targeted interventions.
Early intervention is critical
The first 30 days of a claim are often when the biggest cost drivers emerge. Claims managers who can identify high-risk claims and outlier medical utilization early are best positioned to contain costs and improve outcomes.
You can break free from fee-schedule constraints
Emerging high-tech, data-driven solutions are changing claims teams’ ability to control costs where it matters most, delivering measurable savings and operational efficiency. If you’re lagging behind or are unsure of where you stand in this shifting environment, take stock with these five proactive self-assessment steps.
- Review your current benchmarking approach.
Are you comparing your medical spend to relevant, risk-adjusted benchmarks? Consider supplementing fee schedule analysis with group health data or other external references to gain a clearer picture of provider performance and utilization patterns. - Assess your ability to identify high-cost claims early.
Evaluate whether your team has the tools and processes to flag costly claims within the first two weeks, when intervention is most effective. - Strengthen your data strategy.
Make sure you’re leveraging both structured and unstructured data (such as claim notes) to capture early risk signals like comorbidities, attorney involvement, or psychosocial factors. - Invest in change management and training.
As new analytics and benchmarking tools become available, ensure your team is equipped to translate insights into concrete actions. Regular training and feedback loops can drive adoption and maximize impact. - Monitor regulatory developments.
Stay informed about state-level changes to fee schedules and emerging AI regulations, as these can impact both strategy and compliance.
Rising medical costs are a complex challenge, but with the right data, benchmarks, and early intervention strategies, claims organizations can stay ahead of the curve. Now is the time to review your approach, invest in actionable insights, and foster a culture of continuous improvement.
