Average Medical Payment per Claim in California Decreased Following 2013 Regulatory Changes, Says WCRI

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The WCRI study, CompScope™ Benchmarks for California 15th Edition, monitored changes over time in the state for income benefits, medical benefits, and a host of other metrics. It also compared California’s performance with workers’ compensation systems in 16 other states.

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SB 863 also eliminated separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries. This could be another factor underlying the decrease reported.

The average medical payment per claim for treating injured workers decreased by 5 percent in California in 2013, according to a recent study by the Workers Compensation Research Institute (WCRI), which could reflect some early impact of the state’s reform legislation, Senate Bill (SB) 863.

The WCRI study, CompScope™ Benchmarks for California 15th Edition, monitored changes over time in the state for income benefits, medical benefits, and a host of other metrics. It also compared California’s performance with workers’ compensation systems in 16 other states.

Using data through March 2014, WCRI looked at the average medical payment per claim for 2013 claims with more than seven days of lost time. This measure fell 5 percent in 2013, after a couple of years of moderate growth between 2010 and 2012 and a period of rapid increase from 2006 to 2009. By contrast, in many other study states, medical payments per claim grew in 2013.

California underwent the recent reforms of its workers’ compensation system effective January 1, 2013. The comprehensive reform legislation, SB 863, had multiple goals: to increase permanent disability benefits for injured workers, to create cost savings where possible, to improve the quality of and access to medical care, and to make the workers’ compensation process more efficient where possible.

Several provisions of SB 863 may have been part of the reason for the results WCRI found, said Ramona Tanabe, WCRI’s executive vice president and counsel. “For example, one provision reduced fee schedule rates for services provided in ambulatory surgery centers (ASCs) from 120 percent of Medicare to 80 percent of Medicare. This may be related to the decrease in medical payments per claim in 2013,” said Tanabe. “SB 863 also eliminated separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries. This could be another factor underlying the decrease reported.”

The average indemnity benefit per claim in California grew moderately at 3 percent per year in 2012 and 2013, the study showed, in part because of small increases in wages and the duration of temporary disability benefits.

The study also found expenses for delivering benefits to injured workers in California had moderate growth for 2013 claims with experience through the first quarter of 2014. This indicates the decrease in these measures anticipated by the passage of SB 863 has yet to be observed.

To purchase a copy of this study, click on the following link: http://www.wcrinet.org/studies/public/books/bmcscope_multi15_CA_Book.html.

The Cambridge-based WCRI is recognized as a leader in providing high quality, objective information about public policy issues involving workers' compensation systems.

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
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