Estimating the Effect of California’s Fee Schedule Changes: Lessons from WCRI Studies

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This report, Estimating the Effect of California’s Fee Schedule Changes: Lessons from WCRI Studies, by the Workers Compensation Research Institute (WCRI) illustrates the possible changes one may expect after California Senate Bill 863 is underway.

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Although it’s still too early to see the full impact of SB 863, lessons can be derived from other WCRI studies to help us predict what could happen.

When California Senate Bill (SB) 863 took effect January 1, 2013, it ushered in several important fee schedule changes in the California workers’ compensation system.

To better understand the possible effect of these changes on prices and payments in California relative to other states, as well as their potential impact on behavior and access to care, the Workers Compensation Research Institute (WCRI) has released a new study that pulls together relevant findings from a variety of WCRI studies.

The study, Estimating the Effect of California’s Fee Schedule Changes: Lessons from WCRI Studies, focuses on the transition to a resource-based-relative-value-scale (RBRVS) fee schedule for professional services and the decrease in fee schedule rates for ambulatory surgery center (ASC) services. The following are among the major findings from the study:

  • Large increases in office visit fee schedule rates under SB 863 will likely lead to substantial increases in prices paid in California, as the reforms intended. However, the reimbursement rule change regarding report, record review, and consultation codes may moderate the potential increase in payments.
  • The billing pattern for common evaluation and management services in California was different from other study states prior to SB 863; this may change after the transition to RBRVS.
  • The combination of fee schedule decreases for surgery and ASC services will likely result in a material decrease in the average payment for common knee surgeries done in ASC settings. After the fee schedule decrease, the workers’ compensation prices for professional services by surgeons would likely be similar to group health prices.
  • Implications of fee schedule and price changes under SB 863 for potential changes in behavior and access to care may be different for different services and providers. After the fee schedule increase for office visits, workers’ compensation prices may be higher than group health, whereas prices for surgeons would likely be similar to group health.

“Although it’s still too early to see the full impact of SB 863, lessons can be derived from other WCRI studies to help us predict what could happen,” said Ramona Tanabe, WCRI deputy director and counsel, “Future WCRI studies, including CompScope™ Medical Benchmarks, will give us a clearer, more complete picture of the collective impact of the reform provisions, as well as behavioral changes by system participants as they adapt to the reforms.”

For more information about this study or to purchase a copy, visit: http://www.wcrinet.org/result/ca_fs_2014_result.html.

ABOUT WCRI:
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand.

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Andrew Kenneally
Workers Compensation Research Institute
+1 (617) 661-9274 Ext: 257
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