California Regulatory Changes Expected To Affect Workers’ Comp Costs

April 5, 2013

The 2012 workers’ compensation regulatory changes in California are expected to affect both the prices and utilization of medical care to injured workers by most types of providers, says a new study by the Workers Compensation Research Institute (WCRI).

The study provides a baseline for monitoring the impact of the 2012 reforms in California, SB 863.

The WCRI study, Baseline for Monitoring the Impact of 2012 Reforms in California, said the potential impact from the measure could include, among other things, an increase in prices paid for primary care and a decrease in prices paid for specialty services. Other possibilities include a decrease in payments for ambulatory surgical care services, changes in utilization of different types of services, lower medical legal expenses, faster dispute resolution, and more timely medical treatment.

“Future editions of CompScope Medical Benchmarks will monitor the collective impact of the regulatory changes, as well as monitor behavioral changes by system participants as they adapt,” said Ramona Tanabe, WCRI’s deputy director and counsel.

This study focuses on how California compared with other study states prior to SB 863. Medical payments per claim in the state were fairly typical, masking several offsetting factors. Prices paid were lower than in the typical study state, while utilization of nonhospital services was higher. Hospital outpatient/ambulatory surgical center costs in California were lower than in many study states. There was also more frequent use of chiropractic care and services from physical therapists.

The WCRI study said the costs of medical care for injured workers in California grew rapidly from 2005 to 2010. This growth followed a decrease of more than 30 percent from 2002 to 2004 due to the previous round of regulatory changes in the California workers’ compensation system.

The report said the growth in utilization of nonhospital care and hospital outpatient and/or ambulatory surgical center costs may reflect the combined impact of changes in regulation and participant behaviors.

Source: WCRI

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