Workers’ Comp Study Looks at California’s Reforms

When California Senate Bill 863 took effect Jan. 1, 2013, it created several fee schedule changes in the California workers’ compensation system.

The Workers Compensation Research Institute has released a study looking at the possible effect of these changes on prices and payments in California relative to other states, as well as their potential impact on behavior and access to care.

The study, “Estimating the Effect of California’s Fee Schedule Changes: Lessons from WCRI Studies,” focuses on the transition to a resource-based-relative-value-scale fee schedule for professional services and the decrease in fee schedule rates for ambulatory surgery center services.

Findings from the study include:

• Large increases in office visit fee schedule rates under SB 863 will likely lead to substantial increases in prices paid in California, as the reforms intended. However, the reimbursement rule change regarding report, record review, and consultation codes may moderate the potential increase in payments.
• The billing pattern for common evaluation and management services in California was different from other study states prior to SB 863; this may change after the transition to RBRVS.
• The combination of fee schedule decreases for surgery and ASC services will likely result in a material decrease in the average payment for common knee surgeries done in ASC settings. After the fee schedule decrease, the workers’ compensation prices for professional services by surgeons would likely be similar to group health prices.
• Implications of fee schedule and price changes under SB 863 for potential changes in behavior and access to care may be different for different services and providers. After the fee schedule increase for office visits, workers’ compprices may be higher than group health, whereas prices for surgeons would likely be similar to group health.

“Although it’s still too early to see the full impact of SB 863, lessons can be derived from other WCRI studies to help us predict what could happen,” Ramona Tanabe, WCRI deputy director and counsel, said in a statement.

California Department of Industrial Relations Director Christine Baker offered thoughts on how fee schedules are playing out following the reforms.

“The fee schedules that are tied to Medicare offer the opportunity to have updated schedules with updated DRGs for payment. They provide consistent, predictable fees for payment,” Baker said. “Because the reforms went to RBRVS for physicians, the incentives have now shifted to the treating physician who can facilitate return to work and direct to the appropriate specialist if needed.”

WCRI is an independent, not-for-profit research organization based in Cambridge, Mass.