CWCI Study Examines Medical Cost Containment in Calif.

January 24, 2002

The California Workers’ Compensation Institute has revealed new research to show that medical cost containment (MCC) expenses in California’s workers’ comp represented less than six percent of total medical payments between 1993 and 1999, despite the growing number of medical payments in recent years.

According to the CWCI, MCC, which includes medical bill review, medical case management, utilization review, and preferred provider organization contracts, increased in medical payments from 4.6 percent in 1993 to 8 percent in 1999, average of 5.7 percent in that time span.

The study further notes that most of the MCC growth coincided with specific changes in increased medical utilization such as the 1994 revisions to the medical fee schedule and the adoption of legislation and case law giving the primary treating physician’s opinion a rebuttable presumption of correctness over all medical issues. Through an analysis of claim distributions based on claim type, litigated vs. non-litigated claims, and injured body part claims, the CWCI concluded that most MCC payments are concentrated in areas where the potential for medical cost and utilization controls are greatest, such as permanent disability claims, which are complex cases and require more extensive care.

Additionally, about one third of medical payments and nearly half of all MCC expense goes to low back, knee, and multiple injury claims, which tend to be more complex, require more intensive treatment, and often involve medical providers.

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