For most of this decade, the average medical cost per indemnity claim in California has declined. Anti-fraud measures by the Department of Industrial Relations (DIR), the California Department of Insurance (CDI), local district attorneys and insurer special investigative units also contributed to the significant reduction in medical costs. As part of this effort, the DIR has, as of August 2019, indicted and/or suspended more than 500 medical providers from participating in the California workers’ compensation system.
In 2018, the WCIRB published a study evaluating the potential impact of medical fraud enforcement.
The 2018 study showed that over 7% of total medical payments were made to Indicted Providers, who rendered more than 4% of the medical services in the second half of 2012. By the second half of 2017, the shares of both medical payments and transactions to these Indicted Providers had fallen by over two thirds.
The WCIRB has now released Treatment Patterns of Medical Providers Indicted for Fraud in California Workers’ Compensation, a follow-up analysis to its 2018 study that evaluated the potential impact of medical provider fraud enforcement.
The new research brief compares the treatment patterns and types of services rendered by indicted/suspended providers (indicted providers) to non-indicted/suspended providers (other providers) as well as the regional variations and differences in treatment levels on cumulative trauma (CT) claims. The WCIRB’s findings include:
The average total medical paid per indicted provider was 10 times higher than other providers between 2013 and 2018, largely because indicted providers treated significantly more injured workers and rendered more services per injured worker.
The shares of medical payments for medical-legal (ML) and medical liens of indicted providers were two to three times higher than other providers. Indicted providers were also paid a significantly higher share for complex office visits and ML evaluations.
Indicted providers in the Los Angeles Basin accounted for about half of indicted providers linked to WCIRB data, but they received more than 90 percent of the medical payments made to these indicted providers. The share of indemnity claims involving CT within the LA Basin was consistently higher for indicted providers between 2013 and 2015, yet the pattern did not hold in 2016.