The average amount paid for an individual medical-legal service in the California workers’ compensation system rose 66 percent in the 8 years that followed the 2006 revisions to the medical-legal fee schedule, as the mix of medical-legal services shifted away from those reimbursed at a flat fee toward time-based services such as follow-ups within 9 months of a prior evaluation, comprehensive evaluations involving extraordinary circumstances and supplemental reports. The findings are part of a new California Workers’ Compensation Institute (CWCI) study that reviews the legislative reforms, regulatory changes and judicial decisions that have reshaped the medical-legal process for resolving workers’ comp claim disputes over the past quarter century; provides an update on the quantity, mix and average payments for medical-legal services in the wake of the 2002-2004 reforms; and generates benchmark data for use in future studies on the impact of the 2012 reforms, which introduced independent medical review as a new means for resolving treatment disputes.
Among the key findings of the study:
- The percent of indemnity claims with medical-legal services dropped from 24 percent in AY 2004 to 17 percent in AY 2005, after implementation of the 2002-2004 reforms, and has remained near that level.
- In 2007, the first full year under the revised fee schedule that introduced new time-based billing codes for medical-legal testimony and supplemental evaluations, the average payment for an individual medical-legal service was $979. By 2014, the average had increased 66 percent to $1,628.
- The increase in the overall average medical-legal payment from 2007 to 2014 reflects a continuing shift from services with flat fees to the following time-based services that are billed in 15-minute increments:
- Follow-up evaluations within nine months of a prior evaluation (billing code ML 101), where the average payment increased 136.4 percent;
- Comprehensive evaluations involving extraordinary circumstances (billing code ML 104), where the average payment increased 66.2 percent; and
- Supplemental evaluations (ML 106) where the average payment rose 86.1 percent.
- Invalid charges for supplemental reports have increased. The proportion of supplemental (ML 106) medical reports billed within 24 months of the injury absent an initial medical-legal evaluation increased from one in seven in AY 2007 to one in five in AY 2013.
CWCI has published its study, including additional details, tables and analyses in a Research Note, “The Changing Nature and Cost of the Medical-Legal Process in California Workers’ Compensation.” CWCI members and members of the public who are CWCI research subscribers can access the full 20-page report as well as a 2-page summary Bulletin by logging in to the Institute’s website at http://www.cwci.org/.