CWCI and WCIRB: SB 863 Lowered Surgical Center Payments in California

Average facility fee payments to ambulatory surgery centers fell 26 percent per episode and 28 percent per procedure since fee schedule changes mandated by Senate Bill 863 were adopted last year.

That’s according to a study by the Workers’ Compensation Insurance Rating Bureau of California and the California Workers’ Compensation Institute. The results of this study are consistent with the WCIRB’s initial projection of a 25 percent reduction in ASC costs that was part of the Jan. 1, 2013 pure premium rate filing, according to the authors of the study.

The joint study measured average amounts billed and paid for workers’ comp outpatient surgery services in the year preceding the adoption of the revised fee schedule and in the first six months after the revised fee schedule took effect.

Payment results were measured both on a per procedure basis using CWCI data, and a per episode basis using WCIRB data. The authors also looked for changes in a number of factors that can affect the total amounts paid to surgical centers.

Among the findings of the report:

• The average amount paid per ASC procedure following the implementation of the revised ASC fee schedule fell 28 percent;
• The average amount paid for ASC services per episode fell 26 percent;
• Although billings increased and negotiated discounts eroded, the net paid amounts for ASC services were not materially affected;
• Both ASCs and hospital outpatient departments showed declines in the proportion of outpatient facility fees paying for additional services associated with the primary paid procedure;
• The proportion of ASC payments attributable to services not subject to the fee schedule change increased, but remained relatively small;
• The data indicate no change in the mix of services or the percentage of episodes occurring in outpatient hospital settings and ASCs.

The study authors said their findings are preliminary, so WCIRB and CWCI will continue to monitor ASC experience and plan to update the report later this year to reflect all 2013 data.