California Workers’ Comp Medical Care Costs Moderated Prior To Reforms

May 13, 2014

A recent study from Cambridge-based Workers Compensation Research Institute (WCRI) looked at the potential impact of recent reform legislation on price and utilization of medical services in the California workers’ compensation system.

CompScope Medical Benchmarks for California, 14th Edition, provides baseline data for monitoring the impact of the California reform legislation (Senate Bill 863), which took effect on January 1, 2013, as several key provisions of it apply to medical reimbursement and treatment as well as the medical-legal process.

According to the study, the potential impact from the transition to a resource-based relative value scale (RBRVS) fee schedule would likely shift payments from specialty care to primary care, based on experiences from other states WCRI has studied. The study reported that in Maryland and Georgia, the prior transition to the RBRVS-based fee schedules led to increases in prices paid for office visits and physical medicine, and decreases in prices paid for surgical services.

“Lessons from other states may be instructive on the potential implications of the expected change to utilization, provider behavior, and access to care following the price changes,” said Ramona Tanabe, WCRI deputy director and counsel. “Future editions of CompScope Medical Benchmarks will monitor the collective impact of the reform provisions, as well as behavioral changes by system participants as they adapt to the reforms.”

The study shows the growth in medical payments per claim in California had moderated to 3 percent per year in 2010 and 2011, following previous increases of 8 percent per year since 2005. The moderating trend stemmed from the stabilization in utilization of non-hospital services and little change in prices paid for professional services. Hospital payments per inpatient episode continued to grow rapidly from 2006 to 2011.

The WCRI study also shows that before the reforms, medical-legal expenses per claim in California grew rapidly and were among the highest of the 16 states in the study.

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Source: WCRI

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