The WCIRB released Medical Service Cost Trends through 2025 tracking medical service costs across service years 2014 through 2025. Medical costs accounted for 52% of total loss payments in the system in 2025.California’s workers’ compensation medical costs rose a modest 5% in 2025, but the composition of that increase tells a more pointed story: the fastest growth is now concentrated in services that no fee schedule caps, in medical-legal activity rather than medical treatment, and in Southern California.

Medical paid per claim rose 5% in 2025, following a 10% jump in 2024. The 2025 increase decomposes into a 4% rise in paid per transaction (price) and a 1% rise in transactions per claim (utilization). The longer arc is more striking: between 2014 and 2019, paid per transaction rose 9% while transactions per claim fell 24%, producing a 17% net decline in paid per claim. Between 2020 and 2025 that reversed entirely, with paid per transaction up 33%, utilization down just 2%, and paid per claim up 29%. Notably, after a decade of decline, the number of medical service transactions per claim began rising in 2024 and continued across multiple service categories in 2025.

The service mix has also shifted meaningfully over the past decade. Physician Services remain the largest category at 48% of medical payments in 2025 (up from 45% in 2015), but Medical-Legal has climbed from 13% to 17% and Medical Equipment and Other Services from 9% to 13%, while Pharmaceuticals collapsed from 11% of payments in 2015 to just 2% in 2025, largely on the back of SB 863 and sharply reduced opioid prescribing. Inpatient fell from 12% to 10% and Outpatient from 9% to 8%.

Perhaps the report’s most policy-relevant finding concerns services that fall outside fee schedule price caps. Their share of total medical payments rose from 12% in 2021 to 17% in 2025, while the share subject to a fee schedule slipped from 83% to 79%. More telling is the utilization trend: indexed to 2021, utilization of non-fee-schedule services reached 120 by 2025 while fee schedule service utilization sat flat at 99. In 2024 and 2025, non-fee-schedule services accounted for nearly 30% of all utilization growth across the entire medical system, despite representing a relatively small share of payments — and they carry substantially higher average payments per transaction than capped services.

These services cluster in two places. Within Medical Equipment and Other Services, the leading non-fee-schedule items are Interpreter services (HCPCS T1013) and Home Health Aide services (S9122). Within Physician Services, they are three unlisted procedure codes: Unlisted Physical Medicine (97799), Unlisted Special Services and Report (99199), and Unlisted Evaluation and Management (99499). In 2025, 58% of all non-fee-schedule payments fell in the Medical Equipment and Other Services category and 31% in Physician Services.

By service type, Medical-Legal (up 13% paid per claim) and Medical Equipment and Other Services (up 8%) were the largest contributors to 2025 cost growth, with cumulative trauma claims driving both. Copy Services, though only 1.5% of payments, grew 8%. Physician Services — the dominant 2024 driver at 12% growth — moderated to 4% in 2025. Inpatient was flat and Pharmaceuticals declined 3%.

Medical-Legal costs have risen 47% per claim since 2021, when the new Medical-Legal Fee Schedule took effect. Early increases reflected higher reimbursement levels; more recent growth is almost entirely utilization, with services per claim up 30% since 2021 and rising another 12% in 2025 alone. Comprehensive evaluations account for 68% of medical-legal payments but only 45% of services, at $3,334 paid per service in 2025; supplemental evaluations make up 31% of services but 16% of payments, at $1,176 each. Additional record review costs — charges for reviewing records beyond the 2021 fee schedule’s page limit — have risen 14% per review since 2021 and now attach to roughly one-third of all medical-legal evaluations.

The cumulative trauma link is explicit. Indexed to 2014, medical-legal services per claim on CT claims reached 189 by 2024, versus 110 for non-CT claims, while paid per service grew at nearly identical rates for both (127 and 130). In other words, the medical-legal cost problem is a CT claims volume problem, not a pricing problem.

The single most dramatic trend in the report involves a category that accounts for just 3.6% of all medical payments. Interpreter services paid per claim has risen 714% since 2014 and 141% since 2020 alone — the fastest-growing service category over the past five years. Both components contributed: paid per transaction up 25% since 2020 and transactions per claim up 93%. Interpreter services are now the second-largest component within Medical Equipment and Other Services at 27% of that category’s payments, up from 8% in 2015, having overtaken Durable Medical Equipment (down from 31% to 17%). WCIRB attributes the growth to the absence of any fee schedule, the fact that interpreter services are billed by service duration, and a rising share of CT claims involving interpreters — interpreter transactions per claim on CT claims hit an index of 589 by 2023 versus 460 for non-CT claims.

Home Health tells a related demographic story. Paid per claim rose 52% between 2020 and 2025, with no fee schedule governing the category. Injured workers over age 60 accounted for 51% of Home Health payments in 2025, compared with 26% of payments across all medical services — and up from 35% of Home Health payments in 2015, a shift WCIRB links to an aging workforce.

Southern California drove statewide trends decisively. Overall paid per claim rose 8% there in 2025 versus 1% in Northern California, where declining average prices offset higher utilization. Medical-Legal is the sharpest split: costs rose 18% per claim in Southern California, driven by a 16% jump in services per claim, while falling 6% in Northern California as utilization dropped 7%. Southern California recorded 20.0 medical-legal services per 100 claims in 2025 against 10.8 in the north, a gap that has widened substantially since 2022.

The pattern holds across categories. Physician Services paid per claim reached $1,163 in Southern California versus $763 in the north, with transactions per claim 57% higher. Physical Medicine paid per claim was $290 versus $235, with visits per claim about 46% higher. Medical Equipment and Other Services showed the widest proportional gap at $283 versus $147, with utilization more than double.

Elsewhere in the report, Evaluation and Management (38% of Physician Services payments) and Physical Medicine (28%) together account for roughly 70% of physician spending, with E&M costs rising 6% per claim in 2025 almost entirely on price, reflecting a shift toward higher-complexity office visits. Inpatient surgical payments per episode fell from $34,854 in 2021 to $24,205 in 2025 even as surgical episodes per 1,000 claims rose, narrowing the gap with non-surgical episodes. WCIRB will host a Research Forum webinar on the report, “Behind the Numbers: Medical Cost Trends through 2025,” on September 23, 2026.