Workers' Comp Outlook

Florida Claim Costs Lower Than Average — For Now

A pair of closely watched case in the Florida courts could have a significant impact on workers' comp claims costs in the state.
By: | June 1, 2015

Defense attorneys are involved more often in Florida workers’ comp cases, and the average defense attorney payment per claim was higher than that of other states. That’s according to findings from the Workers Compensation Research Institute.

In its 15th edition CompScope report, the Massachusetts-based organization benchmarked the performance of Florida’s workers’ comp system and compared it with 16 other states. It is based on experience through the first quarter of 2014.

“Total costs per claim in Florida were slightly lower than the 17-state median and grew moderately through March 2014,” the study said. “For 2013 claims with seven days of lost time and experience through March 2014, total costs per claim in Florida were about 11 percent lower than the 17-state median. For more mature 2011 claims at an average 36 months of experience, the average total cost per claim in Florida was in the middle group of states. At $35,639, this measure in Florida was 9 percent lower than the median of the 17 study states.”

But the authors noted that costs in the workers’ comp system could be impacted by decisions expected in several court cases. The constitutionality of Florida’s statutory cap of 104 weeks on temporary disability benefits may change, depending on the state Supreme Court’s ruling in Westphal v. City of St. Petersburg. The constitutionality of the statutory attorney’s fees schedule is being challenged by the Castellanos v. Next Door Co. case.

In terms of attorney involvement, the authors said 92 percent of closed lump-sum claims involved defense attorneys, a much higher rate compared with other impairment rating states. “The frequency of lump-sum settlements in Florida was also higher than most study states,” according to the report. “Therefore, more frequent defense attorney involvement in lump-sum cases and more frequent lump-sum settlements were the main drivers of the higher percentage of claims with defense attorney involvement in Florida.”

Regardless of whether a claim had a lump-sum settlement, received weekly permanent partial disability benefits but no lump-sum settlement, or received temporary disability benefits only, the average defense attorney payment per claim in the state was among the highest of the impairment rating states. Compared to Indiana, the average defense attorney payment per claim in Florida was nearly double; and compared to New Jersey, it was more than 2.5 times higher.

“Given that the hourly rate for defense attorneys was unlikely to vary by that much in those states, higher defense attorney payments per claim may mean more hours spent by attorneys on the case, which may indicate that the dispute resolution process in Florida was more litigious.”

Other findings included:

  • Indemnity benefits per claim grew moderately in 2013, mainly driven by moderate increases in wages and lump-sum settlement frequency and payments per claim.
  • Average indemnity cost per claim was lower than in many study states, largely due to shorter TTD duration and lower PPD/lump-sum payments per claim.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected].

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