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 determined:

1) 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.
2) 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.
3) 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:
4) Follow-up evaluations within nine months of a prior evaluation (billing code ML 101), where the average payment increased 136.4 percent;
5) Comprehensive evaluations involving extraordinary circumstances (billing code ML 104), where the average payment increased 66.2 percent; and
6) Supplemental evaluations (ML 106) where the average payment rose 86.1 percent.
7) 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.