When the Workers’ Compensation Insurance Rating Bureau of California counts physician care the way it always has, injured workers appear to be getting less of it. When it weighs that care by how much time, skill and expense each service actually demands, the picture flips. That is the central finding of A New Measure of Medical Service Utilization: Physician Services and the Factors Driving Change, a research report the WCIRB released on October 30, 2026. Using its new resource-based yardstick, the bureau estimates that utilization of physician services rose 8 percent from 2020 through 2025. Its traditional measure shows a 5 percent decline over the same period.
The report, written by Lucy Chen, ACAS, and Julia Zhang, PhD, is the first in a planned series on medical service utilization. It starts with physician and non-physician practitioner services, which the WCIRB describes as the largest medical service category in its medical transaction data. The stakes are significant: according to the report, medical costs made up 52 percent of total loss payments in California’s workers’ compensation system in 2025.
Medical costs are driven by price and utilization. Until now, the WCIRB has generally measured utilization as medical transactions per claim (or visits per claim for physical medicine, acupuncture and chiropractic care). Those counts are simple, but they treat a brief office visit and a spinal surgery as equal units of care.
The new measure fixes that by borrowing the relative value units (RVUs) from the Resource-Based Relative Value Scale that Medicare uses to set physician fees. The Division of Workers’ Compensation adopted the RBRVS for the physician services section of the Official Medical Fee Schedule (OMFS) in 2014 (see the DWC’s RBRVS fact sheet). Each procedure carries three RVU components — physician work, practice expense and malpractice expense — and the WCIRB adjusts each with the geographic practice cost index, then multiplies by the number of procedures billed. Services that have no RVU in the fee schedule, such as unlisted procedure codes, anesthesia and California-specific report codes WC001 through WC012, are measured by the quantity of services per claim instead. Services with RVUs accounted for about 86 percent of physician services payments and 83 percent of transactions from 2014 through 2025.
The report illustrates the difference with two hypothetical claims. Three routine office visits for an established patient in Los Angeles add up to about 8.7 utilization units, while a single lumbar laminotomy performed in the Bay Area comes to about 31.6. Under the old transaction count, the office-visit claim would look like the heavier user of care; under the new measure, the surgical claim does.
Applied to WCIRB medical transaction data for services rendered from 2014 through 2025, the two measures tracked each other closely through 2019, with the old measure showing a 12 percent decline and the new measure a 9 percent decline. They diverged beginning in 2020. The WCIRB reads that gap as evidence that the resource intensity of care has been rising even as the raw number of services has fallen. Both measures did show utilization increasing in 2024 and 2025.
The new measure also redraws the line between price and utilization. Over the full 2014–2025 period, physician services cost per claim rose 31 percent under either approach. The original measure splits that into an 11 percent drop in utilization and a 48 percent jump in price per transaction. The new measure attributes it to a 7 percent increase in utilization and a 22 percent increase in price per utilization unit. Under the new measure, prices grew about 2 percent a year, versus about 4 percent under the old one. The report notes that the slower figure lines up better with the roughly 2.2 percent annualized increase in the OMFS conversion factor, which reflects inflationary fee schedule adjustments. In other words, much of what looked like price inflation was really more intensive care. Even so, the WCIRB found that from 2020 through 2025 the cost increase was still driven mostly by price, which rose 14 percent, compared with an 8 percent rise in utilization, for a 24 percent increase in cost per claim.
The second half of the report uses the new measure to identify what is driving the trend. Southern California has consistently shown the highest physician services utilization, and by 2025 it stood 23 percent above its 2014 level, though all regions have grown faster since 2019. Cumulative trauma (CT) claims are another factor. Non-CT claims generally use more physician services during the first 12 months, but utilization tied to CT claims has grown faster since 2022, largely because CT claims make up a growing share of the claim mix. CT claims also show heavier use of certain treatments, including nerve-damage diagnostics, psychotherapy and carpal tunnel neuroplasty. The WCIRB examined the rise of CT claims in more depth in its June 2026 report, Emerging Patterns of Cumulative Trauma Claims.
By type of service, evaluation and management (E&M) visits and physical medicine did most of the work. E&M, the largest component at roughly 35 percent of utilization, jumped sharply in 2021, which the report associates with Medicare’s higher RVUs for common office-visit codes and coding rule changes allowing visit complexity to be set by medical decision-making or total clinician time. Since 2021, low-complexity office visits have declined, while high-complexity visits in 2025 ran 35 percent above their 2021 level. Physical medicine grew from 22 percent of utilization in 2014 to 26 percent, and its utilization in 2025 was 26 percent above the 2014 level. The report credits much of that to a shift toward higher-intensity services such as neuromuscular reeducation and therapeutic activities, while lower-intensity therapeutic exercise and manual therapy declined modestly.
Surgery moved the other way and was the main offset. Its share of utilization dropped from 14 percent in 2014 to 8 percent in 2025. Nervous system surgical utilization fell 50 percent and musculoskeletal surgery 35 percent over the study period, although arthroplasty has recently climbed back above its 2014 level.
Separately, utilization of services not subject to the fee schedule ran 30 percent above its 2021 level in 2024, driven largely by the unlisted physical medicine code 97799, before moderating in 2025.
The WCIRB notes that the analysis reflects insured employers only, excludes COVID-19 claims, and uses data evaluated as of June 7, 2026, so figures may change as the data mature. Some procedures lack RVUs and are measured by service counts, and because RVUs are updated yearly, changes in Medicare valuations can register as changes in measured utilization.