A review of information by Business Insurance predicts that the new medical-legal fee Schedule changes could increase costs by as much as $270M.

The modifications to the medical-legal fee schedule are predicted to increase fees for such reviews by 22%, according to the WCIRB.

Modifications to E&M services reimbursements, which account for about 15.9% of overall medical costs in the California workers comp system, including self-insureds, could have an estimated system impact of $170 million, WCIRB analysts said. The change to medical-legal review reimbursements, which comprise about 6.5% of overall medical costs, could have an estimated $100 million system impact.

While the E&M system increases stem mainly from changes in procedure codes, about 11% of the potential price increase in medical-legal reviews comes from a record review reimbursement overhaul that has many defense attorneys concerned.

The prior schedule, which had been in place since 2006, had paid QMEs an hourly fee. The new schedule, introduced by the California Division of Workers Compensation in February, will pay QMEs a flat fee of $2,015 for a comprehensive case review plus an additional $3 per page for any records in excess of 200 pages.

Often medical records contain duplicative and irrelevant material which applicant and defense attorneys may not necessarily exclude from the materials sent to the evaluator, thus driving up the costs. Additionally, both sides may send the QME the same records which are included in the page count.

“Taking all of this together, this is not particularly good news for the California workers compensation system, and it’s coming just as the small businesses and the economy overall are trying to recover from COVID,” said Robert Hartwig, clinical associate professor and director of the Risk and Uncertainty Management Center at the University of South Carolina in Columbia.