WCRI Study Examines Impact of Reforms to the California Workers’ Compensation System

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This recently released WCRI study, CompScope™ Benchmarks for California, 16th Edition, focuses on income benefits, overall medical payments, costs per claim, duration of disability, litigiousness, benefit delivery expenses, timeliness of payment, and other metrics.

Sample chart from study.

Medical payments per claim with more than seven days of lost time in California decreased 4 percent in 2013, followed by another 3 percent decrease in 2014 for claims with 12 months of experience.

Elements of California’s 2013 workers’ compensation reform law may have contributed to the state’s 2013 and 2014 decreases in medical payments per workers’ compensation claim, according to a recently released study from the Workers Compensation Research Institute (WCRI).

The study, CompScope™ Benchmarks for California, 16th Edition, focuses on income benefits, overall medical payments, costs per claim, duration of disability, litigiousness, benefit delivery expenses, timeliness of payment, and other metrics.

“Medical payments per claim with more than seven days of lost time in California decreased 4 percent in 2013, followed by another 3 percent decrease in 2014 for claims with 12 months of experience,” said Ramona Tanabe, WCRI’s executive vice president and counsel. California and North Carolina were the only two states among the 18 WCRI studied to see medical payments per claim decrease in that period.

The California legislation, Senate Bill (SB) 863, took effect in 2013 and reduced the fee schedule rates for ambulatory surgery centers while also eliminating separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries. The bill required a $150 lien filing fee and a $100 activation fee for liens already filed. In addition, SB 863 began a multi-year transition to a professional services fee schedule based on the resource-based relative value scale (RBRVS).

California’s indemnity benefits per claim with more than seven days of lost time grew 5 percent in 2014/2015, similar to the median increase found in the 18 states WCRI studied. The 2014/2015 time frame refers to claims with injuries arising from October 1, 2013, to September 30, 2014, with experience through March 31, 2015.

“Indemnity benefits per claim had been growing about 2 percent annually between 2009 and 2013 in California, but the rate increased in 2014. This may reflect the early impact of the SB 863 increases to weekly permanent disability benefits for injured workers,” said Tanabe.

The following are among the study’s other major findings:

  • California had higher costs per claim than other study states.
  • California’s benefit delivery expenses per claim increased moderately after 2009 for claims with more than seven days of lost time and these expenses; the trends did not show material differences pre- and post-reform for these claims with experience through March 2015.

To purchase this study, visit http://www.wcrinet.org/studies/public/books/BMcscope_multi16_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. Since 1983, WCRI has been a catalyst for significant improvements in workers' compensation systems around the world with its objective, credible, and high-quality research. WCRI's members include 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 - WCRI
since: 06/2011
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