Legislation May Have Led To Decrease In Average Medical Payments per Claim in California, Says WCRI Study

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Medical payments per claim in California decreased 5 percent in 2013 for claims with more than seven days of lost at 12 months of experience, a trend that likely reflects the early impact of the 2012 workers’ compensation reform legislation, according to a recent study by the Workers Compensation Research Institute (WCRI).

Sample chart from the report.

Sample chart from the report.

The 2013 decrease in medical payments per claim followed a period of moderate growth from 2010 to 2012. In future studies, we will continue to monitor the impact of SB 863.

Medical payments per claim in California decreased 5 percent in 2013 for claims with more than seven days of lost time at 12 months of experience, a trend that likely reflects the early impact of the 2012 workers’ compensation reform legislation, according to a recent study by the Workers Compensation Research Institute (WCRI).

The report, CompScope™ Medical Benchmarks for California, 16th Edition, said California’s experience differed from many of the 17 states WCRI studied since in most states, medical payments per claim grew in 2013.

Sections of Senate Bill (SB) 863 that became effective in 2013 reduced fee schedule rates for services at ambulatory surgical centers (ASCs); eliminated separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries; and required a $150 fee to file liens against an employee’s workers’ compensation benefits and a $100 activation fee for liens already filed.

In January 2014, the law began phasing in the use of a fee schedule based on Medicare’s Resource-Based Relative Value Scale (RBRVS). The transition is scheduled to take place over four years and remain in effect until the Division of Workers’ Compensation adopts an RBRVS fee schedule that allows no more than 120 percent of the aggregate fees allowed by Medicare.

The following are among some of the findings from the study:

  •     ASC facility payments per claim decreased nearly 24 percent in 2013.
  •     Following the state’s transition toward a RBRVS fee schedule, prices paid for primary care increased in 2014, while some specialty care prices decreased.

“The 2013 decrease in medical payments per claim followed a period of moderate growth from 2010 to 2012,” said Ramona Tanabe, executive vice president and counsel for WCRI. “In future studies, we will continue to monitor the impact of SB 863.”

The report examined medical payments, prices, and utilization in California and compared them with 16 other states. It also examined how metrics of medical costs and care compared from state to state and across time. The study analyzed claims with experience through 2014 on injuries that occurred in 2013 and prior.

To purchase this report, visit http://www.wcrinet.org/studies/public/books/csmed16_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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