California WCIRB Report Shows Medical Bill Transactions Fell in 2014

The California Workers’ Compensation Insurance Rating Bureau on Tuesday issued its California Workers’ Compensation Aggregate Medical Payment Trends report showing medical bill transactions fell by $100 million in 2014.

The WCIRB report compares medical payment transaction data from calendar year 2014 with calendar year 2013.

WCIRB researchers used reported medical payment data representing more than 90 percent of the California workers’ comp insurance market.

Among the report’s findings are:

• Industry-wide medical payments based on WCIRB individual medical bill transactions fell by $100 million (3.7 percent) in 2014 compared with 2013. This decrease occurred despite a minimal change in the number of claims in 2014. As a result the medical paid based on individual medical bill transactions per claim declined by 5 percent.
• The adoption of the resource based relative value scale-based provider fee schedule in January 2014 was one factor in these savings. This schedule covered roughly 40 percent of all costs, or $1 billion per year. This new schedule shifted payment shares from specialists to primary care providers. The impact of RBRVS was reflected in 2014 changes in payment shares for types of provider, places of service, mix of paid procedures and the fastest growing procedures.
• Several services not affected by RBRVS also experienced declines in 2014 compared with 2013. Inpatient and outpatient payments as well as payments for medical supplies showed declines, both in share of payments and paid per transaction. Total pharmacy payments, including spending on opiates, dropped slightly in 2014. However, the cost per drug transaction rose, due largely to the frequent use of brand rather than generic drugs.
• Exceptions to the overall payment declines were medical legal and lien costs. Both categories increased in payment shares and costs per transaction in 2014 compared with 2013. The rise in medical legal costs is largely due to the continued increase in higher complexity reports. The increase in lien costs is likely attributable to improved reporting of those costs in the WCIRB’s individual medical bill transaction data set.