Reforms May Have Caused Drop in Medical Payments in California, Study Shows

Medical payments per claim in California fell 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.

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

Sections of Senate Bill 863, which took effect in 2013, reduced fee schedule rates for services at ambulatory surgical centers. The bill also eliminated separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries, and it required a $150 fee to file liens against an employee’s workers’ comp 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. 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 study shows ASC facility payments per claim fell nearly 24 percent in 2013, and 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,” Ramona Tanabe, executive vice president and counsel for WCRI, said in a statement. “In future studies, we will continue to monitor the impact of SB 863.”