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CWCI Study Tracks California Workers’ Comp Professional Medical Service Trends

Oakland, CA – A new study details changes in the utilization and reimbursement of California workers’ comp physician and non-physician medical services from 2013 through 2018 – a 6-year span during which the state transitioned to a Resource-Based Relative Value Scale (RBRVS) fee schedule mandated by 2012 legislative reforms (SB 863).

The study, authored by Stacy Jones, Senior Research Analyst at the California Workers’ Compensation Institute (CWCI) examines data on 35.9 million medical services provided to injured workers in California to measure changes in the mix of services and payments across nine medical service categories from 2013, the last year under the old fee schedule, across 2014 through 2017, the 4-year period during which the state transitioned into the RBRVS schedule, and into 2018, the first year after the new schedule took full effect. Overall claim volume fell 5.2% from 2013 to 2018, but that only partially explains the 28.4% decline in total service counts (identified by billing codes) and the 20.4% decline in aggregate payments during that period. Examining the service counts by medical service category reveals wide variation, with reductions ranging from a 17.2% decline in physical medicine services to a 71.8% drop in pathology and laboratory services. In addition, the study found that the declines in the number of unique claims associated with each service category also varied widely, ranging from a 4.4% decline in claims with physical medicine services to a 42.9% drop in claims with pathology and laboratory services. The varying reductions in the volume of services among the different categories, as well as updates to the service codes and service descriptions included in the new fee schedule, resulted in a reallocation of the fee schedule dollars, with an increased share paying for primary care, and a smaller share paying for specialty services, which was a key goal behind the adoption of the RBRVS fee schedule. Between 2013 and 2018, the study found total payments for evaluation and management (E&M) and physical medicine services, which together comprised 68.3 percent of primary care delivered to injured workers in 2018, increased by 9.3% and 30.6% respectively, while total payments for the 7 other service categories all declined, dropping between 16.5% and 76.1%.     

Some of the disparities between the utilization and total payment trends in the 9 service categories reflected the change in the average payment per service code. Calculating average payments for services in the 9 categories from 2013 through 2018, the study found that despite the reductions in the volume of services, average amounts paid to providers increased in 5 categories, with increases of 2.1% for surgery services; 28.5% for medicine services; 35.9% for durable medical equipment, prosthetics, orthotics and supplies; 39.4% for evaluation and management; and 57.6% for physical medicine. On the flip side, average payments fell for pathology and lab services (-15.3%);  radiology (-17.2%); and special services (-35.6%), where the decline was primarily due to lower report costs which reflect the RBRVS schedule’s elimination of separate fees for consultation services and associated reports. 

The full study takes a detailed look at the professional medical service utilization and reimbursement trends, including shifts in the mix of specific services and payments within each of the 9 service categories, and the underlying changes to the fee schedule that prompted those moves. CWCI has published the study in a Research Update Report, “Trends in the Utilization and Reimbursement of California Workers’ Compensation Professional Medical Services, 2013-2018” which is available to Institute members and subscribers in the Research section of its website, www.cwci.org, or available for purchase at www.cwci.org/store.html.

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