California Senate Bill (SB) 863, signed into law in 2012, may have contributed to decreases in medical payments per workers’ compensation claim in 2013 and 2014, according to CompScope – Medical Benchmarks for California, 17th Edition, a study by the Workers Compensation Research Institute (WCRI).
According to the study, medical payments per claim in California decreased 4 percent in 2013 and then 3 percent in 2014 for claims with more than seven days of lost time at 12 months of experience, mainly driven by decreases in payments per claim for nonhospital services.
“California’s experience differed from most of the other 17 states WCRI studied since in many states, medical payments per claim grew from 2012 to 2014,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “The decrease in medical payments per claim in California likely reflects the impact of SB 863 provisions.”
Effective January 2013, SB 863 reduced the fee schedule rates for services at ambulatory surgery centers (ASCs). Following this policy change, the average ASC facility payment per claim decreased 27 percent from 2012 to 2014, according to the study. Future WCRI studies will continue to monitor the full impact of SB 863.
Starting in 2014, the law began phasing in the use of a fee schedule based on Medicare’s resource-based relative value scale (RBRVS) for professional services over a four-year period. WCRI reported that prices paid for primary care services increased while prices paid for specialty care decreased in 2014 and 2015. These changes are consistent with the policy goal.
Other reform provisions that may have contributed to decreases in medical payments per claim include eliminating separate reimbursement for implantable medical devices, hardware, and instruments for spinal surgeries; requiring a $150 fee to file liens against an employee’s workers’ compensation benefits and a $100 activation fee for liens already filed; and establishing an independent medical review (IMR) process.
Among other study findings:
1) California had higher medical payments per claim compared with many other study states.
2) Payments per claim for hospital services remained stable from 2009 to 2014 in California.
WCRI studied medical payments, prices, and utilization in 18 states, including California, looking at claim experience through 2015 on injuries that occurred mainly in 2009 to 2014. WCRI’s CompScope Medical Benchmark studies compare payments from state to state and across time. Copies of this report can be ordered from the WCRI web site.
The Cambridge-based WCRI is recognized as a leader in providing high-quality, objective information about public policy issues involving workers’ compensation systems.